SCL HUB June 2016

1. Leading Supply Chain in the New Digital Age
Dealing with disruption and managing change
Mick Jones
Former VP Logistics, Lenovo

2. As Leaders in Supply Chain our World is changing fast..
As Leaders in Supply Chain our World is changing fast..
..and it has suddenly become a more complicated, serious & a scarier place

3. ..that is directly reflected in the complexity and globality of new supply chains
Cultural, Socio-Economic, Geo-political
Digitally disruptive technologies
Financial power / availability of capital
As leaders we are facing Seismic level disruptions in the way that our world
operates – our role is to lead and navigate our organisations through the
transformation and develop organisations that are fit for the NEW future.
A World of Change - creating a Tsunami in Supply Chain that could drown us.
Swim or better Surf! ……. This will be an amazing 10 years!
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Major Social, Economic, Geo-Political and Cultural Changes are hitting us
Supply Chain Globalisation & Complexity
Product Life Cycle’s shortening.. more SKU’s
‘Digital Melts the Chain’
Supply volatility PLUS …. Demand variability means … lower Forecast-ablity
The Rise of Consumer Democracy
Consumer is ‘in control’ …Consumer ever increasing Choice at zero cost … Devaluing speed and cost
Omni-channel / e-com
The Amazon ‘bullwhip’ effect drives cost and complexity upstream rapidly
65% GDP will reside in 600 Cities by 2025
Oil Price / Stock Market +China Consumerisation & Sourcing changes
Geopolitical Instability + Middle East, Africa & India as sources & destinations
We live in an ever Changing World
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People and Cultural Changes are enabling or are being enabled by disruption elsewhere

5. Digital Disruption has changed the landscape of our business
Big Digital Trends have snuck up on us and will change the face of supply chain and logistics forever!
The Importance of Data and Analytics
 Data: 40 Zettabytes by 2020 - 80% unstructured / 0.5% analysis
 Managing data and storing data in Data Lakes
 Cognitive & Machine Learning Analytics - Predictive Analytics -> Predictive Logistics
 Collecting, Handling, Analysing and Understanding data becomes one of the Key Purposes of the Value Chain
Easy systems, the Cloud & massive processing power
 Systems become more GUI & Connective - Outside-in - not Inside-out development – avoiding dangers of tackling ERP’s
 The rise of Cognitive Computing and the eventual implications of ‘AI type systems’
 $$ Fewer and Off the Shelf - New tech lowers the cost of entry and lessens the gap between big and small
 Cloud based / Open Source / AWS type approaches – Pay as U Go
Uber-isation and the growth of Collaborative Commerceh
 Growth of collaborative ‘Uber-Type’ Platforms - Using existing individual assets to provide a service
 The Uber-isation of Air & Ocean moves – and the growth of SC technology: further commoditizing logistics products:
 Domestic Platforms: Cargomatic & Convoy
 Empty shipping containers: xChange, 1-stop
 Driving new Approaches to Work / Life - Millennials
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6. Digital Disruption has changed the landscape of our business
Big Digital Trends have snuck up on us and will change the face of supply chain and logistics forever!
The Rise of Robots and Automation
Drones & Self Driving Vehicles
3D Printing and IoT
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2.3M US Robots & 1M ‘Foxbots’ + Google acquires 8 robotics companies in 2014
Productivity and the Impact on where we source and where we make + Cost to Serve / Landed Cost implications
‘Learning’ collaborative Robotics – pick one day / pack the next
Drones: Amazon Prime Air Service – 30 minutes / 15 miles + FAA ruling implications (line of sight etc)
Autonomous vehicles and Drone Ships - more logical starting point
Disconnect Customer - Physical Address
New set of risks – accident, hacking
3D print market increased 30%: Near and ‘Next’ Shoring; Spare Parts Logistics; Zero Length Supply Chain
Amazon 3D printing hubs / trucks –3D Printing Store online
Lower shipping, transport, warehousing & inventory
30BN IoT devices by 2020: Proactive replenishment; Pervasive visibility becomes ‘black box’ and AI

7. Mobile, Easy Cash, new business commercial models and e-com
Our industry is easier to get into and is starting to be dominated by large e-coms
Start Ups and New VC Models
The Power of Cash and Size
The explosion of the Mobile Economy
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New VC models – Kickstarter plus many more: Logistics - from 0.2% to 1.4% of all Start Ups
Ease of entry into market: Growth of Innovative Logistics Start Ups
New Market Performance Dynamics – ‘different market performance expectations’ on new tech enterprises
Amazon OWN IT ALL …versus alibaba CONTROL IT ALL .. and an ACQUIRE IT ALL response from the LSP market
Disrupting multiple markets: Cloud, retail, 3PL
Amazon, Google, Alibaba, e-bay etc – are they disrupting digitally ..or is it about sheer size and power?
Wreak havoc by leveraging huge amounts of capital and cash: Disruptive but based on raw power of cash and size
A Hyper Connected World driven by Mobile
Data on the Move
Growth of the phone .. For everything

8. Mobile, Cash & e-com
Leaders in the Industry will devise NEW approaches that drive value chains forwards
12 key Disruptions that will impact us all over the next 5 - 10 years…...
Cultural & Socio-Economic
Digital Disruption
.….8 areas of development and understanding that will help us.
1) Supply chain data / analytics CoE: supply chain = data hub of the organisation
2) Develop new networks that drive adaptability, visibility, control and agility
3) Strategic relationships with Logistics Partners … NEW Logistics Partners
4) Deliver new value via collaboration along the supply chain
5) Adopting technology that is adaptive, quick, easy to use and cost effective
6) Creating new end to end control structures to manage our complex value chains
7) Understanding the NEW talents and skills required along the value chain
8) Developing a new digital strategy for each of our organisations
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Developing NEW approaches to the Supply Chain

9. Mobile, Cash & e-com
Leaders in the Industry will devise NEW approaches that drive value chains forwards
Focus on 4 key areas.. Data, Networks, Control and Strategy
Cultural & Socio-Economic
Digital Disruption
1) Supply chain data / analytics CoE: supply chain = data hub of the organisation
2) Develop new networks that drive adaptability, visibility, control and agility
3) Strategic relationships with Logistics Partners … NEW Logistics Partners
4) Deliver new value via collaboration along the supply chain
5) Adopt NEW technology that is adaptive, quick, easy to use and cost effective
6) Creating NEW control structures to manage complex value chains end to end
7) Understand the NEW talents and skills required along the value chain
8) Develop a NEW scenario based digital strategy for each of our organisations
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Developing NEW approaches to the Supply Chain

10. • Big Data Strategy: How to drive data and identify how to create capability
• Dashboards tend to show what is happening and not why
• Only 11% of companies have capabilities needed to evaluate “what-if analysis”.
• Lenovo model (1) Outsourcing Analytics; (2) Supply chain CoE - $20M benefit
• Creation of Supply Chain Apps: Sourcing, DoI, Cost to Serve, Aged Parts, POF, Risk of Loss
• Find a good BI Tool – BOARD, ClickView etc – but don’t forget simple Excel and Access
• A good BI tool is essential but few have integrated planning and scenario modelling, which is essential
• Supply chain data analytics provides proven results & high levels of value
• Manage trade-offs of inventory, customer service + costs of supply chain source/make/deliver
• Increasing cyber risks: Ashley Maddison, Microsoft, Sony Pictures
Our role needs to become ‘all about the data’..
The ‘Ripple’ Effect Cyber Attacks:
120,000 per day in 2014
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11. Leaders will need to define new networks2
Additive & ‘on the move’ manufacturing and new inventory models driven by new demands on the supply chain – create
greater complexity and cost and drive a requirement to develop AGILITY and FLEXIBILITY in our processes and networks
Agile new Networks – inventory now drives value
Massive volatility in supply. Supply
Management and Supply Planning
becomes increasingly difficult!
Tremendous variability in demand.
Demand Sensing & Planning
becomes incredibly complex!
Supply:
• Geo Politics
• Global Risk
• Cost / Sourcing
• Market Sensitivity
• Short PL Cycle
• More SKU’s
Demand:
• Consumer democracy
• Deliver anywhere anytime
• Amazon-like Experience
• Ethical / Sustainable
• Mobile economy
• Customisation
Component Manufacture Logistics Distribution Centre Re-seller Retailer Consumer
AGILITY:
o Control networks e2e
o Raw Material sustainability
o End to end visibility.
o Inbound to Manufacturing.
o VMI Inventory.
FLEXIBILITY:
o Additive Manufacturing (Short
runs).
o Automation & Robotics
o Sourcing & Near, Far Sourcing.
o 3D Printing. Configure to Order
(CTO) & Postponement.
COMPLEXITY DRIVES NEW INVENTORY
MODELS:
o Strategic Stock (‘Dark Stores’)
o Inventory Financing
o Downstream VMI.
o E2E inventory visibility
o Collaboration
CONSUMER DEMANDS:
o Omni or Multi Channel
retailers / consumers.
o New Partners / New Models
o Integrated stock.
o City Logistics
Ends ‘out of synch’ -> complexity in matching
Supply to Demand ….
… respond by reducing expectations of forecast
accuracy & building in agility / flexibility into chains
Raw Material Returns
Spare Parts

12. Leaders will deliver new Control Structures3
The old vision of 4PL is completely suited to the new data rich and agile supply chain ecosystems – but
the old version wont work in the new supply chains.
Americas EMEA APAC CHINA
PC Mobile Server
150M ‘things’ / 10M Spare Parts / >1Bn Components / 160 countries / 28 factories
Single ERP / Central Control / Single Dashboard / Single BI / Single OVP / Single Visibility
Inbound Components
WIP / Manufacturing
Outbound B to B
DC Stock
Outbound B – C
Reverse
Spare Parts
Driving e2e Savings across 4 years2Serviceability
Cost to Serve / Landed Cost
Network Design

13. TMS
Forecasting
Sales Budgeting
Scenario Analysis
Reporting
ERP CRM SFA
Dashboards
DWH
Financial
Consolidation
Capacity Planning
Currently decision making processes are disconnected and fragmented3

15. End-to-End visibility and control is achievable3

18. Enterprise Real Time Control Tower with Analytics3

19. Enterprise Control Tower3

20. Leaders will define the digital environment and describe the response4
Digital strategy is the process of specifying an organization's vision, goals, opportunities and related activities in
order to maximize the business benefits of digital initiatives to the organization.”
Gartner’s Hype Cycles 2016
 Organisations focus on making this quarters numbers – worse in new start ups – and ignore the longer term
 Create a Digital Disruption Strategy alongside existing Business Strategy: Impact of Digital Disruptors v time
 Areas of focus for the business and a timeline for the impact and influence of which digital technology
innovations are most relevant to your organisation
 Strategy is probably the wrong word – Scenario Planning – drives tech, people, skills, acquisitions etc
 Develop a response – some organisations are developing Digital Immersion Teams - Proof of Concept process
Disruptive
None
High
Middle
1 – 2 years 3 – 5 years 5 – 10 yearsNow
3D Printing
IoT
ImpactonmySupplyChain
Drones
Driverless
Trucks
City Logistics
Cognitive
Computing
Impact Area

21. One eye on the future – a leader needs to cast his or her mind forwards
The management of networks will go through a revolution.. I met a good friend the other day ….
Here he is….
..dressed for work..
..and relaxing at home..
..we talked
about an
amazing new
Supply Chain
operating
model…
An autonomous and homogenous ecosystem for managing the
network.. Owned by all .. for the good of all stakeholders (and
society) … no human intervention (was it Skynet or Blockchain?)..

22. Leading in Supply Chain is ALL about CHANGE and INNOVATION
‘..Think left and think right and think
low and think high. Oh, the thinks you
can think up if only you try!..’..
The Cat in the Hat, 1957
‘One ought never to turn one's back on a
threatened danger and try to run away
from it. If you do that, you will double the
danger. But if you meet it promptly and
without flinching, you will reduce the
danger by half…’,
Winston Churchill, 1941
Supply Chain needs to become the
Creative CORE of the Organisation

23. Thank-you!
How to contact me:
Mick Jones - greym4tter supply chain solutions
• mick@greym4tter.com / michjon59@gmail.com
• https://uk.linkedin.com/in/mickjonessupplychainsolutions
• @greym4tter