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

owen.mcfeely@pwc.com+353 86 417 4381