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Logitrans 2015 Conference | Porto | 13 May 2015 shared.value.chainPage 1
Resilience, Technology, Sustainability
Competing in the age of disruption, big data and ecological overshoot
Michael D’heur | shared.value.chain
Logitrans 2015 Conference | Porto | 13 May 2015

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shared.value.chain is a think tank and
management advisory firm. We help companies
to embed sustainable value creation in their
core business (products and supply chains).
We believe that there is significant potential
for globally operating corporations to bring
together ecological, economic and societal
value creation.
Sustainable products, flexible and resilient
supply chains as well as collaboration are the
backbone of companies‘ core business and
subsequently the platform for sustainable
growth.
Michael D‘heur
Founder & Managing
Director
shared.value.chain
Munich, Germany
Advisor, Author, Architect
shared.value.chain: We are Advisors, Authors and Architects for
Sustainable Value Creation

3.
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Value Chain Realities Accelerators
Market
Volatility
Natural
Disasters
Key Questions
Source: Adapted from Sustainable Value Chain Management (D’heur et al., Springer, 2015)
The ‚new realities‘ of value creation, put the current business
models under pressure
Global Value
Chains
Scarce
Resources
Profit versus
Purpose
Technical
Innovation
Man made
crises
x
What value do
we want to
create?
How viable is
the current
model?
How do we
build the
capabilities to
cope?

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Volatility in the Market
Global Value Chains
Ecological Crisis
(Storms, Draughts, ...)
Profit versus
Purpose?
Constrained Resources
Financial Crisis
(Lehmann, Euro, ...)
Technology
Supply Chain ‘Scandals’ &
Trust Issues
“How shall we cope and create value in this environment ?”

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Companies need to master customer and internal expectations to
stay ahead of the competition
„I want it today“
„We need to know
upfront“
„Make it faster &
cheaper, please“
• Superior service
experience
• Instantly available
offering across
multiple channels
and customer
groups
• Expectations of a
growing global
middle class
• Full value chain
visibility (from
source to store)
• Anticipate
changes in
demand
• Timely product
feedback /service
• Manage the
supply network
for performance
• Effective and
efficient setup
• Trimmed for
increased
performance
• Continuous cost
reduction in
product &
supply chain
• Management of
Complexity

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Challenges to master service, visibility and efficiency are coming
from multiple areas
How do we protect,
respond, recover?
How do we become
proactive and
predictive?
How do we build a
sustainable model?
SUPERIOR
SERVICE
VALUE CHAIN
VISIBILITY
EFFECTIVE &
EFFICIENT
• Technical, weather
and supplier
disruptions
• Increasing product
proliferation
• Fast changing
demand patterns
• End-to-end value
chain visibility
• New/disruptive
business models
• Longer and more
interdependent
value chains (n-tier
networks)
• Scalability of the
operations
• Increasing cost

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RESILIENT TECH SAVVY SUSTAINABLE
COLLABORATIVE
CAPABILITIES OF A FUTURE PROOF OPERATING MODEL
A new set of capabilities is required, to be able to respond to the
challenges
How do we protect,
respond, recover?
How do we become
proactive and
predictive?
How do we build a
sustainable model?

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Resilience is important to keep the momentum
The ability to absorb the impact of a
business interruption, and continue to
provide a minimum acceptable level of
service. It requires a business culture that
encourages resilience building as an
ongoing practice, aimed to strengthen
processes & plans
RESILIENT Definition

9.
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Source: Dobbs, Manika and Woetzel: No ordinary disruption; McKinsey Global Institute, May 2015
Our global economy is interconnected, like never before – and the
pace is accelerating

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Source: ‘Global Outsourcing & Supply Chain Risk’ Survey (Demand Chain Executive Magazine, 2014)
Companies are operating in a high risk and volatile environment
7%
6-9
3-5 27%
1-2
10+
4%
12%
39%
0
88% of companies surveyed
experienced more than 1
disruption with material
impact on the ability to
operate since 2011
Number of
supply chain
disruptions

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Source: BCI Supply Chain Risk Report, November 2013 (n=519) / Other: Energy scarcity, Cyber attacks, Environmental incidents,
Industrial disputes, healt & Safety, Civil unrest
IT/Telecom disruptions and adverse weather are the main
disruptors across many industries
Unplanned
IT / Telecom
outage
Outsourced
service
failure
Adverse
weather
Product
Quality
Transport
network
disruption
Loss of
talent /
Skills
Financial Services 64% 38% 21% 20%
Professional
Services
70% 68% 47% 43% 35%
Public
Administration
50% 24% 36% 22% 28%
IT & Telecom 48% 25% 33% 25%
Manufacturing 35% 33% 42% 43%
Energy & Utility 44%
Retail & Wholesale 40% 71% 31% 39%
Health Care 43% 50% 43% 50%
Transport &
Storage
44% 56% 67% 56%
Engineering &
Construction
57% 57% 57% 43%

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1. Understand the risks in your end-to-end
value chain
2. Collaborate and engage with key
partners to limit/share the risks
3. Develop business continuity plans, that
are practical and enable you to predict,
respond, recover
3 recommendations to build resilient capabilities
RESILIENT Recommendations

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Being ‘Tech Savvy’ means to be clever in using the right
technologies and data to compete
The ability to use emerging technologies,
including big amounts of data to make the
end-to-end value chain transparent and to
understand/capture market opportunities
TECH SAVVY Definition

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The world is changing at a rate at
which the systems, structures and
cultures built over the past century
can no longer keep up.

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Mobile technologies, the Internet of Things and Big Data are
already changing the game
Source: Dobbs, Manika and Woetzel: No ordinary disruption; McKinsey Global Institute, May 2015

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Source: Supply Chain Insights, Big Data Study 2014/2015
Mobile technologies and big data will be key drivers for supply
chain excellence in the years to come

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3 recommendations to build tech savvy capabilities
1. Understand the opportunity that big data
offers for your company (based on your
industry needs and competitive
position)
2. Use partnerships to share infrastructure
cost
3. Don’t be a slave to the data – use
common sense and manage the risks
(privacy)
TECH SAVVY Recommendations

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Being sustainable means to have a business model, that delivers
economic, ecologic and societal benefits
The ability to structure all aspects of a
companies core business (ie. products
and supply chains) in ways that deliver
economic, ecologic and societal value at
the same time
SUSTAINABLE Definition

19.
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Source: United Nations Environment Program, Footprint Network
Mankind is already exceeding the limits of the planet. Where do we
get the all the Planets from, to survive in the future?

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Source: Ellen MacArthur Foundation, Circular Economy, 2012
Implementing the vision of a circular economy is already driving
transformative change

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3 recommendations to implement a sustainable value chain
1. Question the Status Quo of value
creation in your company and
collaborate across product
development, supply chain and
customers to find more sustainable
solutions
2. Reduce the resource intensity of the
value chain system (Actions might
include asset sharing, multi-modal
transports, Cradle-to-Cradle products,
Closed-loop value chains)
3. Measure a balance set economic,
ecologic and societal metrics
SUSTAINABLE Recommendations

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The ability to collaborate across the boundaries of the value chain
is the key to success
The ability to managing all internal and
external stakeholders in a collaborative
manner, to allow the organization to
manage risks, change and to capture
opportunities
COLLABORATIVE Definition

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Many people drive
important change
Action that is head &
heart driven
More leadership, not
just management
Partnership of
hierarchy and network
Constant flow of
information
Not a project: A
“get-to” mindset,
not “have-to”
Collaborating in a Network Model, helps to adapt faster to
changing needs than traditional models
Source: Adapted from John Kotter, Accelerating Change, 2014

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3 recommendations to drive a culture of collaboration
1. Use the experience of your team and
expand it with external experience ->
overcome internal boundaries
2. Define internal and external
relationships in a new way – you win
and lose together
3. Test the network model as operating
model for accelerated change
COLLABORATIVE Recommendations

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2nd tier
Suppliers
1st tier
Suppliers
1st tier
Customers
2nd tier
Customers
SOURCE MAKE DELIVER
PLAN
RETURN
Value Creation Strategy
(Product, Value Chain, Communication)
Enterprise Architecture
(Organisation, Reporting,
Systems)
Stakeholder
Collaboration
Sustainable
Business Planning
Supplier & Partner
Networks
Sustainable Cost
Reduction
© shared.value.chain
Cradle-to-CradleCo-Creation
Sustainable Operations
Sustainable Products
RESILIENT
TECH SAVVYSUSTAINABLE
COLLABORATIVE
The new platform for sustainable value creation is built on value
chain and collaboration capabilities

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Economic,
ecological
and societal
value
Economic
value
Ecological
value
Societal
value
Revenue growth
Reduced costs
Reduced use of
primary materials
Improved societal
value of the product
Reduced impact of
products on the
environment
Reduced negative
social impact of value
creation
• Reduced working capital
• Fewer fixed assets
• Improved use of capital
• Reliable supplier base
• Sustainable innovation
• Improved brand image
• Premium prices via segmented
customer offerings
• New business models for solving
social problems
• Improved localisation and income
opportunities
• Avoidance of child labour
• Alleviation of poverty
• Substitution and simplification of
materials
• Reduced environmental impact and
costs
• Closed material cycles
• Internalisation of environmental
costs
• Habitat regeneration
• Preservation of biodiversity
Source: Sustainable Value Chain Management (D’heur et al., Springer, 2015)
Thriving for sustainable value creation, is delivering several
economic, ecologic and societal benefits

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Resilient
Tech savvy
Collaborative
Sustainable
“Are you ready for the race?”

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Muito obrigado - Please join the conversation and discover how
you can make your value chain more sustainable
@SharedxValue
info@sharedvaluechain.com
https://www.facebook.com/sharedvaluechain
https://plus.google.com/+sharedvaluechain/
https://www.linkedin.com/company/shared-value-
chain-management-consultants
CSR und Value Chain Management
(Springer, 2013)
Corporate Social Responsibility
(Springer, 2015)
Sustainable Value Chain Management
(Springer, 2015)
Publications:
https://sharedvaluechain.com/publications/