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July 2018

The Digital Supply Network –Operationalizing Digital


Our objective for the next 45 minutes …

You will be able to articulate what a Digital Supply Network means to your leadership, peers, and teams1

You will have an understanding of the impact Digital Supply Networks will have on the Future of Work2

You will have an understanding of how to operationalize Digital Supply Networks using a Digital Foundry3


Overview:

The evolution of Digital Supply Networks


Boundaries are blurring

Producers &

consumersHumans &

machines

Large & small

organizations

Developed

& emerging

economies

External &

internal costs

& benefits

Products &

services

Paid work

& passions

Industries

& sectors

Scientific &

technical

domains

Holistic Decision Making

Resource Optimization

“Always-On” Agility

End-to-End Transparency

Connected Environment

Cybersecurity Data Integrity Talent Safety

DigitalDevelopment

SmartFactory

DynamicFulfillment

Synchronized Planning

Intelligent Supply

Connected Customer & Aftermarket


The Future of Work


Unprecedented change and opportunity

7Disruptors

Technology is everywhere

6.0 billion+smartphones in the world

by 20201

AI, Cognitive Computing, Robotics

$500,000 in 2008$22,000 today5

Tsunami of data

9x more in last 2 years2

Major enabler of machine learning

Jobs vulnerable to automation

35% UK 47% US

77% China6

Diversity and generational change

Millennials 50%3

25% global pop in Africa by 2050 5

Longevity Dividend– 50 year careers4

Explosion in contingent work

US Contingent workers 40% by 20207

Change in nature of a career

2.5 – 5 years: Half-life of skills4.5 years: Average tenure in a job8

1 https://www.cnbc.com/2017/01/17/6-billion-smartphones-will-be-in-circulation-in-2020-ihs-report.html

2 https://www-01.ibm.com/software/data/bigdata/what-is-big-data.html

3 Annual Global Millennial Study, https://www2.Deloitte.com/uk/en/pages/about-Deloitte-uk/articles/millennial-survey.html

4 https://www.newscientist.com/article/mg23130810-800-the-100year-life-how-should-we-fund-our-lengthening-lives/

5 https://www2.deloitte.com/content/dam/Deloitte/il/Documents/human-capital/Thriving_in_times_of_digita_disruption.pdf

6 http://www.oxfordmartin.ox.ac.uk/downloads/reports/Citi_GPS_Technology_Work_2.pdf

7 Intuit 2020 Report: Twenty Trends that will Shape the next Decade https://http-

download.intuit.com/http.intuit/CMO/intuit/futureofsmallbusiness/intuit_2020_report.pdf.


What appears to be happening• Mobile, sensors, AI, cognitive computing, data.

• Access to technology by consumers globally.

• Technology infiltrates home and political life.

Time

Technology change

Rate

of

ch

an

ge

Business productivity

Gap in business

performance

potential


What is really happening

1970s 1980s 2000s1990s Today2010s

Technology

Individuals

Businesses

Public policy

Source: Deloitte Human Capital Trends, 2017

Rate

of change


Aspects of our point of view

THE AUGMENTED WORKFORCE

3 DIMENSIONS CHANGING

THE FUTURE OF WORK

A CONTINUUM OF TALENT OPTIONS


The augmented workforceTechnology and new talent and organization arrangements are expanding and extending work…

Source: Deloitte Human Capital Trends, 2017


Three dimensions changing the future of workThe “what” (automation), “who” (the open talent continuum), and “where” (workplaces, location) of work are dramatically changing

Current work options

1

Who can do the work?2

What work can be automated?1

Increasing automation, cognitive and AI technologies over the next 10 years…

Future work options

Where is the work done?3

Technological advancements enabling new models for interaction between companies, employees, and customers…

Physical Proximity3

Talent Category2

Automation Level

Rethinking combinations of talent, technology and workplace…

“Work” “Workplace”

“Workforce”


A continuum of talent optionsNew talent approaches are being embraced by organizations to meet the needs of the business and increased expectations from workers

FULL / PART TIME EMPLOYEES

JOINT VENTURES

FREELANCERS

GIG WORKERS

CONTRACTORS

CROWDS

O R G A N I Z A T I O N - L E D

T R A D I T I O N A L O P E N

E M P L O Y E E - L E D


Welcome to the Cognitive Era

1900s

Tabulating System Era

Mechanical devices helped us with tasks such as organizing data and making calculations for tasks such as evaluating the sales performances of a company’s employees (Hollerith Tabulating Machine).

1950s

Programmable Systems Era

Programmable systems enabled major accomplishments such as space exploration and the development of the Internet. The programmable systems era will continue indefinitely, and will underpin the era of computing that we are in now (Windows Desktops/ERP systems).

2000s

CognitiveEra

Cognitive capabilities augment and amplify human intelligence. It is critical to recognize and know when and how to automate and augment to achieve the cognitive advantage.

2020s

Amplified Intelligence Era

In the future, systems will be able to augment human intelligence and replicate human interactions.


Analytics market trends and projections

TOP 3 EMERGING TECHNOLOGIES ORGANIZATIONS ARE INVESTING IN

In IT Spending in Big Data

by 2020

$232B

New “things” connected to

network infrastructure in 2016

5.5M A DAYOf CIO’s indicated that tech spend in analytics would increase over the next 2 years

76%

More unstructured data (vs. structured data) by 2020

~9x

More data created by IoT devices by 2019

269x

Robotic Process Automation

Cognitive Internet of Things

Organizations are looking for ways to leverage artificial intelligence, driving heavy investments in new technologies centered around cognitive capabilities


Evolving Roles in the DSN

TIER 1

TIER 2

TIER 3

TIER 4ADOPTING THE TECHNOLOGY

EVOLVING BUSINESS MODELS FOR A CONNECTED & COGNITIVE SUPPLY CHAIN

How supply chain strategies will evolve in the future

SHAPING THE VALUE-ADDED WORKER

Effective human-machine teaming releases human workers to pursue new value-added tasks

ADAPTING THE ORGANIZATION TO THE TECHNOLOGY

The pace of new technology forces changes in how teams organize and communicate

Workforce learns to work with new connected and cognitive technologies


Examples of New / Changing Supply Chain Roles

Digital Manufacturing Leader

• Integrate IT, OT / Engineering, Process, Maintenance, and

other functions to improve operational performance, e.g.,

redesign business processes and structure to optimize cross-

functional and digital capabilities

• Define and execute on digital strategy for manufacturing

• Lead and advocate for digital transformation in manufacturing,

including

– Creating and socializing the case for change and value

proposition for digital manufacturing across the

enterprise

– Partnering with Operations to drive adoption of new

tools and processes down to the shop floor

• Uncover opportunities to use technology to optimize

manufacturing capability and oversee planning and

implementation of solutions

Internet of Things (IoT)

Solution Manager

• Own the process and technology portfolio of IoT and asset

connectivity solutions in manufacturing, including

– Strategy, design, and implementation of IoT platform

architecture

– Technical design and development of applications

– Redesign of labor and machine processes to achieve

benefit realization

• Gather and prioritize functional and technical requirements for

application development

• Define hypotheses, conduct experiments, and analyze data to

determine innovation opportunities for implementation

• Align IoT solutions with enterprise and technology strategy to

meet wider business needs and goals


The impact of automation will transform all areas of manufacturing and construction

Automation to increase productivity, reduce costs, and improve quality

Half of the industry jobs can potentially be automated

2.7 Million

Construction Workers can be replaced or displaced by 2057

88 Percent

Of operating engineers can be affected by automation

1.5 Million

New jobs will be created for construction workers

Exponential technologies are flipping the industry – more of capital and less labor intensive

Robotics: Extensively used in process like laying bricks. Performing at 6X efficiency level of manual labor.

Augmented/virtual reality and drones: Assist constructor to detect errors ahead of time, avoiding costly mistakes. Remote detection of jobsite condition to make site safe and secure.

3D printing: Capable of building multistory buildings and houses, much stronger and faster to build, with 40% material cost and 20% labor cost.

Over next 40 years, overall mfg. employment likely to decrease

However, automation is likely to lead to:

Lower building and maintenance cost

Higher per-worker productivity

Reduced rates of human injuries and fatalities

Increased business profit

Note: Midwest Economic Policy Institute (MEPI) Research


Future Workforce in Manufacturing and Construction

In 10 years,

20% of assembler jobs in

manufacturing will be lost

Construction Jobs will Boom

+865K jobs by 2026

Assemblers

& Inspectors

Laborers &

Tradespeople

Biggest STEM jobs in

2026:

• Mathematicians

• Statisticians

• Industrial Engineers

• Software developers

Low-skilled

manufacturing jobs

declining the most:

• Laborers

• Material movers

• Hoist/winch operator

• Crane/tower operator

• Maintenance & repair

New Job Titles

Digital Thread Engineer

AR Journey Manager

Drone Manager

Building Assembly Technician

Human-machine Teaming Manager

DSN Community Manager

Collaborative Robotics Technician

Source: Deloitte MI Skills Gap Research


Conduct exponential technology pilots with inputs from workforce redesign

Cognitive Engagement

Cognitive Insights

Robotics & Cognitive Automation

What the advantage looks like

Enable machines to replicate human actions and judgment with robotics and cognitive technologies

Identify opportunities for growth, diversification, and efficiencies by creating large-scale organizational intelligence with pattern detection and the ability to analyze multiple data sources

Use intelligent agents and avatars to deliver mass personalization at scale and smarter, more relevant insights to amplify end-user experience

Transformative changeAutomate repeatable tasks to improve efficiency

FlexibilityUnchain profits from scale constraints to increase enterprise flexibility

New competenciesEngage existing talent to focus on higher-value tasks

New growthUncover hidden patterns to identify new opportunities for innovation

Evidence-based decisionApply a science-based decision-making process informed by deeper insights

Timely actionPush real-time, contextual insights to decision makers at relevant moments

Optimized behavior patternsDrive desired behaviors by delivering hyper-personalization at scale

Next-gen experienceDeploy personalized digital assistants to interact with end-users

Ubiquitous engagementGenerate personalized and contextual recommendations to end-users


Digital Foundry


The Digital Foundry

The goal of the Digital Foundry is to create joint ownership with enhanced decision making, inject energy into converting ideas to actionable plans, increase efficiency, and deliver measurable value

Process Outcomes

Ideation SourcesPrioritized List of Projects

Business Value

Metrics / Accountability

Project Costs

Implementation Roadmap

Project Charter

Ideate

Human CenteredDesi gn

Agi l eDel i ve ry

Measu r e Va l ue

Evolv e

Digital

Foundry

Engineering & Technology Groups

Business Units

Employees

Deloitte’s CoEs

Market Scans

Ecosystem Partners

University Alliances


Key Elements to Developing and Maintaining the Digital Foundry

SET A MISSION AND

STRATEGYMANAGE THE PORTFOLIO

DESIGN AND SCALE

INNOVATIONS

FUEL AND SUPPORT

INNOVATION

Intent

Clear priorities and ambitions for digital innovation

Themes

Articulated areas of focus to pursue

Sensing and Scanning

Ability to spot trends, opportunities, and potential pain points

Governance

How and by whom decisions are made to initiate, extend, or terminate initiatives

Funding

Financial resources devoted to innovation and allocation mechanisms

Metrics

Targets and indications to guide innovation decisions and measure value

Sponsorship

Methods to frame problems, pick sponsors, charter and champion initiatives

Process

Clear methods and approaches for developing digital innovations

Incentives

Mechanisms to reward members and areas in the organization for innovating

Talent + Network

Attracting, developing, and deploying individuals with the right skills at the right time

Tools + Infrastructure

Physical and digital systems that support innovation

CREATE

DIGITAL FOUNDRY DEVELOPMENT

SCALE

Ownership

Joint decision making and innovation enable ownership of ideas and concepts


Executing the Digital Foundry

FROM OPPORTUNITIES TO PROTOTYPES FROM PROTOTYPES TO SCALABLE PROGRAMS

4. Pilot Ideas

3. Prototype

IdeasIterative/agile process

Launch & Scale Programs

1. Identify Ideas

2. ScreenIdeas

(Sprint 0)

DIRECTIVE

EMERGENT

(Industry trends, Quests)

OTHER SOURCES

(Signals, IT, Business, Market Scans, CoEs,

etc.)

Identify trends

with breakthrough

potential

Governance update,

Identify

opportunities and

filter viable ideas

STRATEGY: BALANCE OF

ISSUES-TO-IMPACT

BUILD BUSINESS CASE

Core, Adjacent, New

Sustaining vs Disruptive

Difficulty of implementation

MEASURE ORG IMPACT:

Create optimal

prototype

Conduct testing of

prototype

COLLECT AND CLEAN DATA

AS NECESSARY

DEFINE FUNCTIONALITIES

REVIEW WITH THE

BROADER TEAM

BUILD WORKING

PROTOTYPE AND POC

CHOOSE STRATEGIC

PARTNERS

BUILD IMPLEMENTATION

PLAN

BUILD TRAINING

INFRASTRUCTURE

TROUBLESHOOT BUGS

Only the viable

ideas will make it

to the foundry

DEFINE

ORGANIZATIONAL

STRUCTURE

DEFINE

KPIS AND

METRICS

Governance

(Monthly)

Sprints

(6-8 weeks per idea)


Governing the Digital Foundry

Digital Foundry Core Team

Create and select future sprints

Manage, track, and report on key sprints

Develop clear processes to accelerate future work

Subject Matter Specialists

Validate commercial assumptions

Provide perspective and relevant data from functional areas

Provide transformation and change management experience

Digital Foundry Leadership

Sponsor the Digital Foundry

Set the strategic direction

Obtain funding for the initiatives

Create joint ownership of innovation

Foundry Leadership

The leadership team that will drive the

direction of the digital initiatives

Define the strategic direction and obtain

funding

Receive report outs and determine to

continue, terminate, or adjust initiatives

Digital Portfolio

Run and manage digital sprints

across different themes

Funding

Identify, evaluate and select

initiatives to receive funding as

part of the Digital Foundry

Metrics

Define and evaluate the value the

initiatives are creating

DIGITAL FOUNDRY TEAMDIGITAL FOUNDRY OPERATING MODEL

Domain Experience

Bring Data Experience, Exponential Technology Knowledge, event-

centered Design Experience, and Supply Chain Functional

Experience into the team as needed


Creating Environment to accelerate and succeed

Join an immersive experience (e.g., tour an IoT lab) to explore the “art of the possible”, incite ideas, and cultivate a

culture of innovation

Immerse Yourself in Innovation

Use an agile, iterative approach to move from strategy to prototyping as quickly as

possible – “fail fast” and achieve rapid results

Prove it Works (Quickly)

Evolve internal and external partners into “value webs” through collaboration in new

technologies and capabilities.

Build an Ecosystem

THINK BIG

Disconnect from the core business and set up a “black ops” team to enable disruption

within an established organization

Scaling the Edges

START SMALL SCALE FAST

ESTABLISH A DIGITAL FOUNDRY

The Digital Foundry is an aggregation of services that blends strategic expertise, governance, agile delivery methods, and innovative thinking with enabling technologies.

Select pilots that will allow the idea to demonstrate value quickly and then scale

the proven results

Selection of Pilots

Champion your successes to gain traction and achieve enterprise-wide adoption

Market Your Own Success


Conclusions


Next steps


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