How To Achieve Total Visibility Across The Digital Supply Chain

SAPVoiceThe Best Run  

 Richard Howells , SAP

It has been estimated, that due to the rise in available info from technologies such as IOT and social media, the volume of data is doubling every two years, and will reach the 44 ZB point by 2020. I don’t know how many zeros a ZB represents, but it is a lot.

IOT enabled devices and smart assets and products are generating unparalleled amounts of real time data. Add to this, the unstructured data we get from social media and sentiment analysis, and data about our environment such as weather and traffic, and we have the ultimate BIG DATA challenge.

How do I leverage this data to delight today’s informed, demanding, and ever-evolving customers?

There’s a big difference between partial and total visibility

Now, more than ever we need the visibility to sense, predict and respond to risks and opportunities across all business process, especially the supply chain. In this environment, it is vital to provide real-time visibility to every role across, from how we design products, through how we plan, manufacture, deliver and maintain them.

The first step in gaining total visibility requires connecting your physical and virtual worlds. This means equipping your products and assets with IoT sensors that offer a glimpse into how your objects perform in real time.

But if your company is reaping the rewards of these insights alone, you’re only achieving partial visibility – and you’re selling your business short.

Total visibility involves breaking down the four walls of your organization and sharing data with your entire ecosystem of partners, including suppliers, manufacturers, and logistics providers.

Gaining true 360-degree visibility allows you and your partners to sense, predict, and respond to risks and opportunities throughout the supply chain. It also facilitates greater partner collaboration and coordination.

You can see the real-time movement of goods, whether they’re in production, in a warehouse, or in transit. You can forecast how inclement weather could impact delivery schedules. You can instantly detect and fix minor issues before they turn into major problems.

Ultimately, your ability to visualize what’s happening with your products and assets, predict potential obstacles, minimize and mitigate risk, and accelerate responsiveness will help you deliver superior customer experiences.

Why providing total visibility across the supply chain is vital

Individuals in every role across your supply chain can improve their job performance with access to the right information at the right time. Using granular, contextual data specially tailored to their job functions, employees can:

• Conduct more accurate analyses
• Improve planning
• Increase forecast accuracy
• Boost customer satisfaction

Imagine, as we move into the summer months,  you’re a logistics coordinator responsible for shipping a much-beloved product : ice cream.

You need visibility around when the product will be produced and available at your distribution center so you can accurately schedule your delivery to the grocery store. You need insight on traffic and weather to ensure your shipment can quickly and safely make it to its destination. You need to know if your delivery vehicle and its refrigeration system are in proper working condition so the ice cream can get to the grocery store on time and at the quality demanded.

Now, let’s say you’re a maintenance supervisor. Halfway to the grocery store, the freezer in the transportation vehicle suddenly malfunctions. With access to real-time partner data, you spot this problem the moment it happens. And you’re able to swiftly send a crew to repair the issue so the truck can continue with minimum delay.

Additionally, by identifying common patterns between the refrigeration unit that malfunctioned and your other equipment, you can predict and prevent future failures.

So, what would happen if the freezer broke en route and you lacked instant insight? The driver would arrive at the grocery store with a truck full of melted ice cream. And on top of incurring the wrath of an angry customer, you could potentially lose business.

Creating a digital mirror of your business using IoT sensors can help you prevent all that. It would give you the total visibility you need – in a contextual, role-based manner – to maximize job performance and ensure supply chain success.

When it comes to your supply chain, seeing is succeeding

Data is here to help. Yet many organizations find the sheer volume of data daunting.

The trick is harnessing your data to seize new collaborative opportunities with your business partners.

Innovative technology allows employees inside and outside of your enterprise – no matter their job functions – to view real-time data in a digital mirror of your business and capitalize on this insight to benefit your entire supply chain.

When you and your partners attain total visibility, you can deliver superior customer experiences and generate truly exceptional business outcomes.

Is Your Supply Chain Stuck in the Bermuda Triangle?

Thanks to data and the IoT, the industrial shipping journey needn't be fraught with uncharted waters and black holes.

Dagny Dukach | Apr 30, 2018

It’s 2018. You can track your pets, your car, and even your pizza as it’s delivered from the oven to your doorstep. And yet, most Fortune 500 companies have no idea where their valuable shipments of pharmaceutical, electronic, or industrial products are as they travel through the supply chain.

So why do we have real-time visibility into our pizza deliveries while multi-million-dollar shipments drop from sight as soon as they leave the loading dock? It turns out that there are a handful of barriers that have historically stood in the way of the industrial supply chain achieving anything close to the level of visibility that’s become commonplace in the consumer world.

Supply Chain Tracking: Harder Than It Looks

First, there’s timing. Industrial supply chains in pharmaceuticals, electronics and other big manufacturing industries generally last several weeks or even months, as goods are transported between manufacturing facilities, testing facilities and distribution centers. The long time scale of most commercial supply chains can pose a challenge for effectively keeping track of in-transit goods.

Furthermore, industrial manufacturing is an international, multi-modal endeavor, as supply chains can stretch across oceans and include segments on air, ship, truck or rail carriers. Tracking goods as they cross borders and change carriers becomes more and more challenging as new layers of complexity are added.

In addition, manufacturing supply chains often encounter specific bottlenecks, such as ports or trucking terminals, that can create blind spots for supply chain managers. With no insight into location or condition, shipments can essentially disappear—sometimes for weeks or months on end—while stuck in a shipping bottleneck.

Because of these additional complexities in the industrial supply chain, tracking systems that are commonplace in the consumer world are generally less effective in supply chain. Many parcel tracking systems rely on manual scanning of each box as it passes through certain gateways, such as arrival at an airport or post office. For a shipment that lasts a few days and is limited to a single carrier, that can provide a pretty comprehensive picture. But for a months-long international commercial shipment, these sorts of manual check-ins are woefully inadequate.

A New Level of Visibility

Fortunately, new technologies are enabling a new level of visibility into the supply chain, bringing it up to par with—and even beyond—the world of consumer tracking. Specifically, the Internet of Things (IoT) is transforming “black hole”-riddled delivery systems into data-driven supply chains where both the shipper and receiver have real-time visibility into the location and condition of shipments throughout the supply chain journey.

So what does IoT look like in supply chain? In general, supply chain IoT entails constantly connected trackers that monitor the location and condition of in-transit goods, and send that data to users in real time. A handful of recent enabling factors have made these IoT tools possible: on the one hand, advances in battery and sensor technology have made it possible for tracking devices to monitor everything from location to temperature, humidity, shock, orientation, and other key metrics, all with a battery lifetime of six months or more. The other key piece of the puzzle is the communications network. Today, IoT devices can rely on the global cellular network to transmit data in real time all around the world, enabling reliable, low-cost global coverage for supply chain trackers.

Operational Impact

These global, real-time tracking and monitoring solutions are already having a huge impact on supply chain. First, access to location and condition data makes it possible for managers to react faster when problems occur. For example, recently an international pharmaceutical company used IoT trackers to monitor the temperature of sensitive products travelling from a European manufacturing facility to North America for distribution. A tracker detected that the shipment was set to the wrong temperature and sent an alert to the manufacturer. Armed with that real-time visibility, the supply chain manager called the shipper and had them reset the container to the correct temperature, thus saving the product.

In addition, access to contextual data can enable root-cause analysis of enduring issues in the supply chain. When managers gain insight into exactly when and where a problem occurred, they can eliminate the source of the issue and prevent re-occurance. For instance, if a certain route frequently experiences harmful shock events, the supply chain manager can use IoT data to pinpoint exactly when and where the damages are occurring, and reroute future shipments to avoid the problem area.

These IoT tools can have a huge impact on the day-to-day operations of the modern supply chain, as they enable manufacturers to respond proactively to real-time problems. But more than that, they are also giving companies access to new data sources that make it possible to bring data-driven manufacturing strategies and big data analytics to supply chain. These data-driven strategies are helping companies to optimize their supply chains on a macro level, reducing waste and increasing efficiency across the board.

The Data-Driven Supply Chain

For example, manufacturers can use data analysis tools like SPC (Statistical Process Control) to identify outliers and improve the quality levels of their supply chain processes. With SPC, each incoming data point (be it delivery time, damage rates, or any other relevant metric accessible with an IoT tracking system) is immediately compared to historical average, high, and low levels. In this manner, problems can be easily quantified and addressed, instead of relying on guesswork or gut instinct to determine when and how to take action.In addition, access to comprehensive, contextual data makes it possible to apply all sorts of tools from the lean and Six Sigma frameworks to the industrial supply chain. At a high level, lean and Six Sigma refer to methodologies that use a quantitative, data-driven approach to reduce waste and improve quality. Tactically, this can mean anything from using real-time location data to reduce safety stock levels (if you know in advance when shipments will be late, you don’t have to hold as much buffer stock), to using temperature data to compare quality levels for different carriers and enforce clear, quantifiable quality standards for each step of the supply chain.

When it comes to big data analytics, the possibilities are endless. We are just scratching the surface as manufacturers begin to realize the potential of real-time IoT tracking in the supply chain.

Chilling Or Thrilling? JD.com Founder Envisions A '100%' Robot Workforce

Jon Bird , CONTRIBUTORI write about the new retail reality; what it means and what’s next Opinions expressed by Forbes Contributors are their own.

“I hope my company would be 100% automation someday … no human beings anymore, 100% operated by AI and robots.” That’s Richard Liu’s audacious goal, which he outlined to my colleague David Roth* in a rare, just-released interview conducted in English at the World Retail Congress in Madrid last week.

David Roth

Richard Liu, founder, CEO and chairman of JD.com

Liu is the 44-year-old founder, CEO and chairman of JD.com (JD), which is China’s largest retailer by revenue, and in the top three e-commerce companies globally. (In fact at $55.7 billion in revenue last year, if ranked alongside all U.S. retailers, JD would be just outside the top 10.)

JD is a serious player, and deadly serious about AI and robotics. The company is investing $4.5 billion to build an AI center in Guandong province, and has set up its JD-X robotics research hub in Silicon Valley, led by the ex-Senior Research Manager of Amazon Go.

Operationally, JD sees humans being removed from the retail process. Picture the near future: When a customer makes a purchase, the order will be picked by robots in a “people-free warehouse” (Liu’s term), then delivered by drone or a self-driving vehicle within 30 minutes, where the recipient will gain access to the package via facial recognition. AI technology will manage inventory and price products as well – far more efficiently than humans.

JD is already trialing robot delivery via “campus couriers”across several universities in Beijing, and is planning to build 200 drone airports in Southwest China.

Models stand near a drone on the JD.com stand on the opening day of the Consumer Electronics Show Asia in Shanghai on June 7, 2017.  (Photo credit should read STR/AFP/Getty Images)

JD also has a view on how physical retail will be reshaped. Shoppers will enter a store, select what they need and leave – with payment controlled by biometrics (facial recognition). This interface is being tested now at JD.com’s headquarters in Beijing. JD has also recently launched a new supermarket concept where robot shopping cartsfollow the customer around the store.

Does JD’s people-free future mean that the company will be reduced to a staff of one – Richard Liu? Well, no, it’s the “boring bits” (my technical term) that will be powered by robotics and AI. There will still be a place for staff, but there will be fewer of them and their roles will be very different. “We have over 160,000 full-time jobs today. In the next 10 years, I hope we will have less than 80,000,” commented Liu. “[Jobs] will reduce in half, or we will reduce working time. People will do less work but get more pay, it will be easier, more fun and less dangerous.”

Of course, JD is not alone in embracing and experimenting with AI and robotics. Lowes has played around with “Lowebots” – store greeters and navigators. Walmart is testing shelf-scanning robots.

All-told this is not just a race for robots, but a furious competition to build platforms that can then be licensed. The world’s biggest retailers, including Amazon, Alibaba and JD are all striving to create the operating system for the future of retail. Alibaba is rolling out its vision of “New Retail”, Amazon has Alexa and “Walk In, Walk Out Shopping,” and JD is going for 100% automation. Richard Liu says that JD is “trying to use visual technology and physical technology which can connect the whole world via goods and services.”

Who will win? Who knows? But one obvious concern in all of this is that once robots take people’s jobs, will we be able to earn enough to enjoy the incredible future being created?

It’s not much of a stretch to envisage a day when your home robot will anticipate your desires and place an order with the retailer, which will then set in motion a robot chain to bring you exactly what you require at precisely the moment you want it. Which is about the time that the robots figure they don’t need us at all.

*David Roth is the CEO of The Store WPP, EMEA and ASIA. WPP is the parent company of VML, which is the author’s employer. You can watch David Roth’s complete interview with JD.com’s Richard Liu below.

PM Perspectives: Voice-Activated Devices Set To Create Disruption In Grocery Sector

Apr. 29, 2018 6:19 AM ET 

 

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 Includes: AMZN

Janus Henderson Investors

Growth, mutual fund manager, bonds

Janus Henderson Investors

(3,204 followers)

Summary

The US grocery market, accounting for 20% of retail spending, is set for a major shakeup as Amazon makes the sector a strategic imperative to boost revenues from Prime members.

Voice-activated personal assistants could power a revolution in grocery and personal goods shopping, reducing – and possibly eliminating – the need to regularly visit physical supermarket stores.

The new shopping paradigm could spell trouble for established supermarket chains that fail to compete in this emerging digital marketplace.

By Joshua Cummings

Voice-activated devices such as Amazon's (NASDAQ:AMZN) Alexa are set to disrupt how U.S. consumers shop for groceries, creating potential headwinds for incumbent supermarket chains that have failed to foresee and prepare for such a digital revolution. Research Analyst Josh Cummings discusses the prospect of permanent and radical change to the $800 billion U.S. grocery market following Amazon's purchase of Whole Foods.

We expect grocery to be a battle ground industry over the next several years. US grocery is approximately an $800 billion industry. E-commerce adoption within grocery is still very low. We estimate in 2017, this was about a $20 billion or 2-1/2%. Groceries also the category that consumers purchase most frequently.

So why is this? Previous digital options were mostly just expensive third-party delivery solutions. And incumbent grocers had very little incentive to push these because they represent less profitable forms of transactions for them. But Amazon's purchase of Whole Foods last year put the industry on notice. We think the big challenge for incumbent grocers is that grocery has become a strategic imperative for Amazon and it's all about frequency. We estimate that at least half the households in the US are currently Prime members representing at least 70% of consumer spending. So the growth algorithm for Amazon going forward is to increase that spend per household and we believe that grocery is an obvious way for them to do that. As we often see in industries facing structural change, the disruptors have a different set of financial incentives than the incumbents. Driving per capita spending through the Amazon ecosystem will help them leverage their supply chain, sell other goods and services and will likely make it a more attractive advertising platform. The discreet profitability of their grocery sales may be less important. That's a problem for incumbent grocers who now must simultaneously defend physical store traffic while investing in digital which brings us to voice commerce.

Recent data suggests that home speaker penetration and usage are beginning to surge in ways that remind us of mobile several years ago. Survey data suggests that approximately 25% of US households already own a home assistant. And while most are not yet using these for shopping, for those who do, groceries and consumables are emerging as two of the more popular use cases. This makes sense to us as the typical household shopping list doesn't vary much from week to week. There's really very little shopping going on. It's more like a physical search process where you have to load your own items. Why spend all that time in grocery stores week after week buying the same items when Alexa can automate that for you and give you that time back? What we've seen across other categories is that consumer perception begins to change rapidly once a better way becomes economically viable and we believe we're reaching that point with voice commerce and grocery. The point of sale effectively moves from the store to a customer's home allowing the owner of that home speaker or that ecosystem to own and capture and control that data. So what does the mean for brands? It's a potential positive for number one or number two brands but a potential negative for third and fourth tier brands. The use of home assistance also gives companies like Amazon the opportunity to substitute their own private labels for branded products.

We think the evolution to voice commerce is going to put pressure on the incumbent grocers and most likely lead to consolidation. And while consolidation may enhance profitability of the survivors, we're not necessarily sure this is going to be the case if voice commerce and Amazon continue to put pressure on the industry. Home speaker adoption clearly skews toward millennials. And as that cohort enters their peak spending years, it's going to drive significant change in the grocery industry.

Walmart and Sainsbury’s announce combination of Sainsbury’s and Asda, Walmart’s wholly owned UK business

Mon April 30, 2018 2:10 AM|Business Wire|About: WMT

BENTONVILLE, Ark.--(BUSINESS WIRE)-- Walmart Inc. (WMT) (“Walmart”) and J Sainsbury plc ("Sainsbury’s") today announce the combination (the “Combination”) of Sainsbury’s and Asda Group Limited ("Asda"), Walmart’s wholly owned UK retail subsidiary (the "Combined Business"). At a time of significant and rapid change in the retail sector, the Combination will create one of the UK’s leading grocery, general merchandise and clothing retail groups. Bringing together two distinctive customer propositions will create a more competitive, adaptable and resilient business - better placed to invest in price, quality, range and more flexible ways for customers to shop.

Under the terms of the Combination, which is subject to various approvals, including from the Competition and Markets Authority, Walmart would hold 42 percent of the share capital of the Combined Business. This holding will be made up of 29.9 percent of Sainsbury’s ordinary shares, with full voting rights attached, with the balance held as non-voting shares convertible into voting shares. In addition, Walmart would receive approximately £2.975 billion in cash, subject to customary closing adjustments, valuing Asda at approximately £7.3 billion on a debt-free, cash-free and pension-free basis. Walmart would retain the Asda defined benefit pension scheme as part of the combination, along with any ongoing defined benefit pension related obligations.

"We believe the Combination offers a unique and exciting opportunity that benefits customers and colleagues,” said Doug McMillon, Walmart’s president and chief executive officer. “As a company, we’ve benefited from doing business in the UK for many years, and we look forward to working closely with Sainsbury’s to deliver the benefits of the combination."

Walmart is embracing technology and thinking differently to serve customers and drive growth. That includes developing partnerships like this one to unlock value for shareholders and customers in the UK.

As a strategic long-term partner, Walmart will share its global retail network and knowledge. The Combined Business will have enhanced capabilities and a strengthened balance sheet to help deliver value and opportunities for customers, colleagues, suppliers and shareholders of both businesses.

The new business will operate a distinctive dual brand strategy. Asda would continue to be run from Leeds by its own CEO, Roger Burnley, who would join the Group Operating Board of the Combined Business, ensuring Asda retains its heritage and roots. Key benefits of the Combination include:

• Creating one of the UK’s leading grocery, general merchandise and clothing retail groups, with combined revenues of c.£51 billion for 2017A¹
• Enabling investment in areas that will benefit customers the most: price, quality, range and creating more flexible ways to shop, across Sainsbury’s, Asda and Argos. It is expected that value will be passed on to customers through significant price reductions
• Maintaining both the Sainsbury’s and Asda brands and enabling them to sharpen their distinct customer propositions and attract new customers
• Offering more opportunities for over 330,000 colleagues at all levels within the enlarged and more resilient group, drawing on the shared values and heritage of both businesses
• Combining a complementary network of more than 2,800 Sainsbury’s, Asda and Argos stores and several of the UK’s most visited retail websites to create greater choice for customers through more store formats and channels, with a combined 47 million customer transactions per week
• Generating net synergies, post price investments, across the enlarged group of at least £500 million. These are comprised largely of buying benefits, opening Argos in Asda stores and operational efficiencies. There are no planned Sainsbury’s or Asda store closures as a result of the Combination
• A comprehensive range of channels and formats across supercenters, superstores, supermarkets, convenience stores and digital

Based on the current deal terms, Walmart expects to recognize a non-cash loss of approximately $2 billion, which is based on the current value of shares to be received and current foreign exchange rates. This estimate could fluctuate significantly due to changes in the fair value of the equity consideration to be received and changes in currency exchange rates. Due to the conditions to complete the transaction, including regulatory approval which could extend into the second half of calendar year 2019, the timing of the loss recognition is not yet determined. Walmart expects the impact to earnings to be slightly dilutive in the first full year following completion of the transaction and neutral to slightly accretive in subsequent years, as synergies are realized. Walmart will update further after the deal closes. Walmart is scheduled to report first quarter results on May 17, 2018.

Two trends transforming the food industry

Photo: Habit Food Personalized, L.L.C.

04.27.2018

By Monica Watrous

 

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MIAMI — Personalized wellness and conscious consumption are two of the biggest trends affecting the food and beverage marketplace over the next few years, said Davey McHenry, vice-president of Consulting Services at The Hartman Group.

Technology has elevated the importance of customization in American food culture, giving rise to an empowered consumer, Ms. McHenry said during The Hartman Group's Food Culture Forecast 2018 summit on April 19 in Miami.

“Personalizing is in our DNA,” she said. “Even ordering a coffee is saturated with cultural-specific meanings.”

Food is an expression of one’s identity, beliefs and desires, as well as a tool for managing wellness. Many consumers are experimenting with various diet and lifestyle approaches to achieve optimal mental and physical health.

“Consumers are beginning to believe in the uniqueness of individual’s bodies and minds,” Ms. McHenry said. “Advice is just that. It’s advice, until I’ve been able to try it and see what works for me.”

In the future, mindful consumers may dig deeper in exploring food’s role in the areas of gut and brain health, stress and sleep quality and personalized nutrition, Ms. McHenry said.

“This overarching trend toward mindfulness that we see in health and wellness has enabled consumers to ask meaningful questions about the origins of food,” she said. “What’s in it? ... How was it made? ... Who made it? ... What we’re seeing more and more is there is another layer that is coming into consideration, which is, how was it grown?”

Consumers are becoming concerned about soil health and its impact on nutrients in food. The issues of pollution and waste also are gaining importance in consumers’ minds and purchasing decisions.

“A willingness to investigate combined with the ease of doing so means Gen Z will likely value transparency even more,” Ms. McHenry said. “Nine in 10 consumers globally rate ingredient transparency as important or very important for companies to address.”

To adapt to the trends of personalized wellness and conscious consumption, businesses must be nimble, innovative and strategic, Ms. McHenry said.

“The rate of change in the food industry is messier and accelerating faster than ever before,” she said. “To be successful, companies have to be able to anticipate and adapt to this new world order... Perhaps the business model you use to measure success no longer works because it’s not business as usual.”

There is no one-size-fits-all solution, she added.

“What is that thing that is going to help you carve out that niche in the marketplace and continue to be relevant to consumers in the future?” — Davey McHenry, The Hartman Group

“Your pathway to growth is dependent on your unique circumstances,” she said. “It’s about your brand, your customer and your competitive environment. It’s about figuring out which of these trends will be the most impactful or the most threatening to your business and focusing on that.

“You can’t be everything to everyone. You can’t tackle everything. So what is that thing that is going to help you carve out that niche in the marketplace and continue to be relevant to consumers in the future?”