ECR Supply Chain and Product Availability Summit 2019
Connected Supply Chains
September 2019
Owen McFeelyDirector, Retail & Consumer, PwC Advisory
PwC Strategy&
Agenda
• Trends impacting the future of supply chains
• Connected supply chains
• The ‘control tower’
• Digital technology enablers
• Road map
2
PwC Strategy&
Changes in consumer expectations, digital technologies and business drivers are increasing requirements for the future supply chain
3
“I need complete order
visibility”
“Give me ‘instant’ order
fulfilment”
“I want personalisedproducts and
services”
“I’m searching for
and buying
products across
multiple channels”
Artificial Intelligence /
Machine Learning
eCommerce / Omni-channel
Cloud solutions
Industry 4.0 and sensorsProduct quality
and transparency in operations
High cost-efficiency in theSupply Chain
Customer centricity
Expanded
product /
services
portfolio
Future
Supply
Chain
Barcode scanning & checkout free
stores
PwC Strategy&
Many organisations have not developed their supply chains to meet the new market requirements
4
Traditional supply chain model
Siloed
functions
Blind
spots
Lack of partner
visibility
One size
fits all
Reduced service
levels
Products in the wrong
place at the wrong
time
Lack of
responsiveness
Higher inventory
levels required
ProductionSupplier Distribution Customer Consumer
Plan
Order & confirm
Plan
Order & confirm
Plan
Order & confirm
Plan
Order & confirm
Limited real-time
information
Manual (non-
dynamic) data
PwC Strategy&
Supply chains must evolve into connected solutions in order to operate with the agility required
5
https://www.youtube.com/watch?v=pdcJJpsOPGw
PwC Strategy&
Companies need to transition from traditional to connected supply chain ecosystems
6
Traditional supply chain model
Connected and dynamic supply chain ecosystem
Connected Supply Chain with E2E visibility,
integration, built-in intelligence and automation
ProductionSupplier Distribution Customer Consumer
Plan
Order &
confirm
Plan
Order &
confirm
Plan
Order &
confirm
Plan
Order &
confirm
PwC Strategy&
Implementing ‘Control Tower’ like functionality, enabled by digital technology, can provide dynamic visibility and integration across the supply chain
7
Dynamic demand sensing
and integrated forecasting
(B2B, B2C, sales data,
external data etc.)
E2E supply &
demand planning
and execution
E2E supply chain
and operations
visibility (e.g. last
mile notification)Automated
data analytics
Holistic supplier
management and
collaboration
Integrated material
requirements
planning (e.g. VMI)
Real-time inventory
management for a
multi-stage SC and
warehouse networkTrack & trace
Customer
Supplier
Tra
ck &
trace
Tra
ck &
tra
ce
Distribution
Production
Flow of goods
Flow of information
Consumer
PwC Strategy&
There are many benefits of getting it right
8
Improved responsiveness through demand sensing and integrated planning
Real time monitoring and transparency across the end-to-end supply chain
Improved reliability and reduced disruption
Enhanced customer focus and service levels
Highly process and asset efficient, reducing working capital requirements
Improved flexibility (e.g. ‘individualization’) and product mix
PwC Strategy&
Capabilities should be developed progressively, layering on increasingly advanced capabilities over time
9
Potential Control Tower Issues
• Too much information can be pulled in or they can try to cover too much
• Issues/alerts may be retrospective (rather than predictive/preventative)
• Inputs (e.g. data) remain manual
• They can be too disjointed from the rest of the organisation to resolve issues
• Roles & responsibilities across the supply chain not clearly defined
Imp
lem
en
tati
on
ph
as
e/
ma
turi
tyle
ve
ls
Integration
Visibility
Automation
Anticipation
• Event / issue detection• Alerts, actions and resolution• Visualization / dashboards / metrics
• External partner integration• Traceability and integrity
• Automated issue resolution• Automated transactions (e.g. RPA)
• ML enabled prescriptive analytics• Preventive actions
Strategy• AI enabled decision support• Scenario analysis and optimization
Smart Control Tower
Increasing capabilities over time:
PwC Strategy&
A FMCG client case study provides an example of how an organisation can progressively build connected supply chain capabilities
10
To-Be Model (Phase 2)
Market 1
Market 2
Market X
Factory 1
Factory X
Supply Chain Hub
Suppliers
Contract Mfr.
To-Be Model (Phase 1)
Market 1
Market 2
Market X
Factory 1
Factory X
Supply Chain Hub
Suppliers
Contract Mfr.
As-Is Model
Market 1
Market 2
Market X
Factory 1
Factory X
Suppliers
Contract Mfr.
Note: Detailed clarity was required on the roles & responsibilities of Supply Chain Hub vs. other key stakeholders (e.g. who manages specific events, who can update schedules, who can request expedited orders/delivery)
PwC Strategy&
Digital technology enables the transition to a flexible, agile and connected supply chain ecosystem
11
Automated Guided Vehicles
Smart Sensors / Natural Language Processing / Social Listening
Real Time Data Analytics, Quality Management, Predictive Maintenance
Augmented Reality (e.g. Smart Glasses/Pick by Vision)
Smart Warehousing, Packaging & Distribution
Machine Learning (e.g. sales prediction, product suggestions, fraud reduction)
PwC Strategy&
An agile and progressive approach should be used to rapidly pilot components of the connected supply chain
12
Understand & Envision Conceptualize & Design Build & Test Scale & Evolve
Future of
Demand Digital Vision &
Roadmap
As-Is
Capabilities &
Maturity
Emerging Tech
Trends
Digital
Opportunities
Prioritisation
Opportunity &
Business Case
Experience center
Compelling qual./quant. business case
Digital Assets
and Capabilities
Required
Define Use
Cases and
Stories E2E Connected
Supply Chain
Concept Design
Rapid
Prototyping
Pilot Projects
Launch
Solution /
Partner Selection
Test & Learn
Refinement &
Industrialization
Scale-up and
Roll-out
Build-out and
Integration
Platform building
Customer Engagement
Customer Stories and Journeys Int. & ext.
communication
Selection and fast implementation
Show not Tell
DigitalModernFoundational
Apps and demos
Essential 8
This is not just about technology, people and processes will be impacted - the entire organisation must embrace the change
PwC Strategy&
A clearly prioritised roadmap helps identify the transformation required for the future
13
ILLUSTRATIVE
Data & Analytics Asset ManagementE2E Supply Chain Visibility
Smart
Manufacturing
Collaboration
Predicative
maintenance
Live remote video
assistance for
maintenance
Single Spare Parts
library
A.I.
Machine
learning
EDI interface with
suppliers
Automated
analytics on
demand forecasting
Dynamic data visualisation
Connected ToolsP2P workflow
S&OP Tools
Supplier collaboration &
performance platform
Augmented Picking
Solutions
WMS integration
Digital
documentation
3D printing to
support
productionFlexible assembly
lines
Simulation
of product
flows
Digital twins
Year 1 Year 2 Year 3 Beyond
Bey
on
dY
ea
r 1
Ye
ar
2Y
ea
r 3
PwC Strategy&
Companies need to transition from traditional to connected supply chains
14
Changing Landscape Connected Supply Chain
Future
Supply
Chain
PwC Strategy&
Thank you
Owen McFeelyDirector, Retail & Consumer, PwC Advisory
[email protected]+353 86 417 4381