Presentation on Big Data

Big Data Supply Chains

Go Big or Go Home!

Big Data will be the NEW
Foundation of the Future
Supply Chain

BRICKS Book
Publishes

Matter
in August
2012

The Role of Supply Chains
in Building Market-Driven
Differentiation

LORA M. CECERE
CHARLES W. CHASE JR.

Agenda

Current State
What is a Big Data Supply Chain?
How will Applications Change?
Wrap-up

p. 4
Supply Chain Insights, LLC © 2012

Supply Chain Tipping Points

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

JIT Supply Chain Internet/Email
RFID
Organization
Evolution of eProcurement
the PC

Re-Engineering the Total Quality
S&OP Organization Management
Theory of
Constraints (Michael Hammer)

Supply Chain Excellence = Supply Chain Excellence =
Islands of Manufacturing Vertical Silo Efficient Order to
+ +
Excellence Excellence Excellence Cash Processes

Inside-Out Inside-Out

p. 5

Supply Chain Tipping Points

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

.com Social
Responsibility
Y2K
Demand Driven
Concepts CSCO
Lean Six Sigma
Market-Driven
Value Networks

Supply Chain Excellence = Supply Chain Excellence =
Vertical Silo Outsourcing Value-Based Outcomes
+
Excellence Effectiveness Delivered by Horizontal Processes

Inside-Out Outside-In

p. 6

7
What is a Market-driven Value Network?

An adaptive network focused on a value-
based outcome that senses and translates
market changes (buy and sell-side markets)
bi-directionally with near-real time data
latency to align sell, deliver, make and
sourcing operations.

p. 7

Evolution of Supply Chain Process
Excellence
Align: Continuous
Building Horizontal Testing Orchestrate
Market Process Connectors Learning
Improving Demand and Supply
Driven In Market

Adapt:
Demand- Resilient
Driven Reliable
Right Product Efficient
Sense Demand
Demand Volatility
and Supply Right Place Cost

Shape Right Time
Procure to
Demand and Supply pay/order to
Supply based Volatility cash
on Market Right Cost

p. 8

What is Supply Chain Excellence?

How Define Supply Chain “Excellence”
Right product, right place, right time at the
right cost. 70%

A responsive supply chain that can adapt as
markets change. 57% Most Mature

A resilient supply chain that can withstand
the shocks of demand and supply volatility. 52%

The Efficient Supply Chain. Lowest cost per
unit. 38%

Right product, right place, right time. 20%

Base: Total Sample (61)
Q14. How does your company define supply chain “excellence?” Please select all that apply. p. 9

The Effective Frontier

Profitable Growth

Revenue Cost of Goods

Working Capital

Corporate Social Responsibility

R&D Strategy and Investment Asset Strategy and Investment

Forecast Accuracy Customer Service Inventory

Channel Strategy Product and Supplier Strategy
Service Portfolio
Sales Distribution Manufacturing Logistics Procurement
Policies Policies Policies Policies Policies

Returns Backorders First Pass Yield Empty Miles Material Yield

p. 10

A Supply Chain
is a Complex System
with Complex Processes
with Increasing Complexity

p. 11

IT Systems:
Quantity

Operational IT Systems
Any
1 System 2 Systems 3+ Systems Systems
Order Management 61% 15% 23% 98%

ERP (Enterprise Resource Planning) 64% 8% 25% 97%

Demand Planning 39% 31% 23% 93%

Production Planning 33% 25% 33% 90%

Tactical Supply Planning 36% 18% 26% 80%

Warehouse Management 30% 16% 33% 79%

Manufacturing Execution Systems 34% 10% 28% 72%

Transportation Planning 38% 20% 13% 70%

Price Management 34% 13% 11% 59%

Product Lifecycle Management 26% 8% 10% 44%

Q15. For each of the following IT systems, please indicate how many you currently have operational – 0 systems, 1 system, 2 systems or 3+ p. 12
systems. Supply Chain Insights, LLC © 2012

IT Systems:
Importance & Satisfaction

IT Importance vs. Satisfaction
Importance (6-7) Satisfaction (6-7) Gap (Sat - Impt)
120%

100%
86% 83% 80% 76% 75% 73% 80%
65% 63% 59% 58%
60%
42% 38%
30% 35% 40%
24% 28% 25%
20%
15% 11% 20%

0%

-21% -20%
-23%
-34% -40%
-45% -47%
-56% -55% -52%
-59% -58% -60%

-80%
Demand Enterprise Order Tactical Supply Price Production Transportation Product Manufacturing Warehouse
Planning Resource Management Planning Management Planning Planning Lifecycle Execution Management
Planning Management Systems
Base: Have
57 59 60 49 36 55 43 27* 44 48
System

p. 13

Agenda

Current State
How will Applications Change?
Wrap-up

p. 14

IT Trends Excited About (Top 3)

Other IT Trends
Top 3 IT Trends Excited About Excited About
(open-ended)
Demand sensing 69% CLOUD SOLUTIONS
• Cloud based solutions that can link value chain
Sales and operations planning 57% partners with different ERP systems.
• Cloud computing (not just storage)
Data visualization 36%
ANALYTICS
Big data supply chains 31% • Predictive analytics
• Predictive Analytics to address growing volatility
• Business Intelligence - integrating massive
eCommerce/social & mobile… 23% amounts of data into an actionable visual
• Linear Program Models driving optimized plans
Mobility 21%
PROCESSES
Supply sensing 15% • It's not about systems. It's about basic
processes. Relying on systems to be the "solve"
Social supply chains 7% is wrong. I'm being forced to choose an IT
trend--I'd like to choose "none." Otherwise, it's
always about the shiny new toy
Corporate social responsibility 5%
OTHER
Machine learning 2% • Network optimization - maybe you would list in
supply sensing, not sure.

Q20. Please select up to three IT trends below that you are most excited about. p. 15
Q21. Please list any other IT trends that you are excited about, if any, in addition to the ones mentioned above. OPEN-ENDED Supply Chain Insights, LLC © 2012

Big Data Plans & Expectations

Current Initiative to Evaluate Big Data

Yes
Not sure 28%
29%

No
43%

Base: Preliminary Total Sample (21)
Q7 - Does your company currently have an initiative in place to evaluate the opportunity with Big Data? p. 16
Q6a - How soon do you expect to have a database that equals a Petabyte? Supply Chain Insights, LLC © 2012

Definition
Structured • Transactional
Challenges:
Data • Time phased data

• Social Volume
Unstructured • Channel
Data • Customer Service
• Warranty

• Temperature Velocity
Sensor • RFID
Data • QR codes
• GPS

Variability
New • Mapping and GPS
• Video
Data • Voice
Types • Digital Images

17 p. 17

Big Data: What is it all About?

Downstream Data EDI Sentiment Text
Cold Chain Call
Analysis Analytics
Center Logs
eCommerce Social What-if Models Hadoop
Learning Systems
Geolocation Data Visualization
Ratings &
Reviews
RFID Facebook Scorecards Rules-Based
Photographs Map Reduce Ontology
Video
T-Log Data Twitter
R Forecasting
Weblogs Warranty Returns Digital Path To Constraint-
Information
Sensors Mobile Applications Purchase based Planning
Data Mining
p. 18

Connecting the Extended Supply Chain

Transactional Transactional Transactional
Applications Applications Applications

Trading Partner 1 Trading Partner 2 Trading Partner 3

20 p. 20

Connecting the Extended Supply Chain

Collaborative Collaborative Collaborative
Layer Layer Layer
Transactional Transactional Transactional
Applications Applications Applications

Enterprise Data Enterprise Data Enterprise Data
Warehouse Warehouse Warehouse
Trading Partner 1 Trading Partner 2 Trading Partner 3

Key:
Demand Signal
Predictive Analytics
Repository
Supply Signal Transactional Adapters
Repository and Intelligent Rule Sets

p. 21

Supply Chain 2020 Tipping Points

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Orchestration Internet of Things
Talent
Shortage Big Data Learning
Supply Chains Supply Chains
Compliance on
Safe & Secure
Digital Manufacturing

Supply Chain Excellence =

Value-Based Outcomes
Delivered by Value Networks

Outside-In

p. 22

Agenda

Current State
Case Studies
Wrap-up

p. 23

Fresh Express Defined a NEW Market

YR 1 = $119.5
(launch FEB/20/1995 QUAD)
(launch FEB/20/1995 QUAD)

Latest YR09 = $1,201
(52 Wks MAY/17/2009 FDMX
(52 Wks MAY/17/2009 FDMX

CONVENIENCE,
Ease of Serving

 New Unique Formula
 New Technology
 Distinctive Innovation
 Superior Process
 More Ingredients

Dole Fresh
“Experience Freshness ” Follower

FRESH EXPRESS ’ priority benefit focus was about the convenience of
serving all that you had previously cut and chopped.
9

Opportunity
• 1/3 of shipped produce wasted: $34B in annual global waste from
perishable foods

• 50% is due to temperature variations from the farm to retail shelf

• Reducing temperature related shrink by half is approx. $9B opportunity.

Strawberries

1% Increase in
reduction in profit of
Shrink $1,173,555

Increase in
6% reduction
profit of
SHM PowerPoint Template Guidelines in Shrink 03.15.10
$7,378,830

Unit BuildingTemperatures MatterFirst
Level Export Pallets – Group by
In or Shelf Life?

11+
14+ 15+ 15+
15+ 15+
12+
12+ 15+ 15+ <10

<10 15+
15+ 14+ 15+
12+ 10+
5+
Having different remaining shelf life mixed on pallets, causes problems later. Sending short shelf life
15+ 15+
berries on longer delivery cycles turns Good Berries into BAD Berries for the retailer and others.
More yellow & red pallets in Philadelphia & Southern California ~ More shrink at the retailer ~
Lower customer satisfaction
If we can group berries by shelf life, we avoid problems on multiple pallets – and send pallets to the
right destination…
<10
10+
12+
15+ 15+ 14+ 15+ 15+ <10
11+

12+
12+
13+

“Where’s My Bud” Viral Campaign
Campaign
Objectives:
Reduce Out of Stocks
at targeted retailers by
5%
Increase Shopper
satisfaction and brand
loyalty Validation:
Identify a key leader or
market that wants to pilot.
50/50 shared risk in effort
and resources to pursue.
Keep costs to a minimum for
pilot, under $75K
Concept:
Execute a viral campaign
focused on leveraging
shoppers to identify out of
stocks and potentially
pricing compliance issues
Leverage a combination of
consumer, internet, and in-
store technical capabilities

p. 27

Retailer Experience

New text message to
612-961-7802:

A customer at Denny
and Doug’s Liquor
Emporium has just
snapped a tag. You’re
out of stock on Bud
Light.

Please contact your
wholesaler.

p. 28

Here are some locations near you where you can
find Bud Light. Be sure to use this promotion code
to get your discount:
ABBL12456

p. 29

More than Just “Like”

p. 30

Dell
Dell’s Key Social Media Milestones

Redefine Customer Service?

32 p. p. 32

Social Coupons for Social Communities

p. 33
33
p.

Newell Rubbermaid

#Future15SB @bwdumars

p. 34

Newell Rubbermaid

#Future15SB @bwdumars

p. 35

Best Buy
How Best Buy created a social strategy

p. 36

37

p. 37

Summary

• Today’s supply chains respond. They don’t
sense. To be able to sense, the supply
chain needs to be redefined by new data
forms and applications.
• The pace of the next decade will be quicker.
It will be outside-in and it will make many of
today’s applications obsolete.
• Go Big DATA or GO HOME!

p. 38

Big Data will be the NEW
Foundation of the Future
Supply Chain

p. 39

Who is Lora?

• Founder of Supply Chain Insights
• Partner at Altimeter Group (leader in open
research)
• 7 years of Management Experience leading
Analyst Teams at Gartner and AMR Research
• 8 years Experience in Marketing and Selling
Supply Chain Software at Descartes Systems
Group and Manugistics (now JDA)
• 15 Years Leading teams in Manufacturing and
Distribution operations for Clorox, Kraft/General
Foods, Nestle/Dreyers Grand Ice Cream and
Procter & Gamble.

p. 40

Where do you find Lora?

Contact Information: loracecere@gmail.com
Blog: www.supplychainshaman.com
(3500 pageviews/month)
Twitter: lcecere 2900 followers. Rated as the
top rated supply chain social network user.
Linkedin: linkedin.com/pub/lora-
cecere/0/196/573 (2300 in the network)

p. 41

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