The Real Time Supply Chain

1
The Real Time Supply Chain

• Prerequisites
• Automated planning Real time visibility
• Give the opportunity to respond in real time to
  unplanned events. This business process is called
  event management.
• In supply chains it is called supply chain event
  management (SCEM)

2
AMR defines event management as

• Underpinned by an integration layer that
  connects to the data repositories of multiple
  systems, applications, and databases, SCEM
  enables business-rule-defined data extraction and
  supply chain visibility to close the loop between
  execution and planning."

3
SAP

• SCEM is currently the fastest growing segment in
  the market for supply chain management software.
  Annual growth gt 50.
• Annual sales in 2006 gt 2.9 billion USD.
• According to research institutes it will be
  between 1 and 1.5 billion.

4
Who will survive ?

• Not the strongest
• Not the most intelligent
• Those most responsive to change

Charles Darwin ( Gustaf Tanate)
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Renaat Sohl
SUPPLY CHAIN VISIBILITY
SUPPLY CHAIN VISIBILITY
HEEFT GEEN ENKEL NUT
ALS HET NIET
DE
BASIS
BASIS
IS VOOR
MONITORING EARLY WARNINGS BIJSTURING OPTIMALISATIE
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MONITORING EARLY WARNINGS BIJSTURING OPTIMALISATIE
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Between scheduling and visibility

• Firstly, all operations get scheduled.
• Subsequently, they get done (execution).
• Should everything execute according to plan, then
  visibility displays a copy of the planning zero
  exceptions, nothing to manage.
• Wherever the execution deviates from what is
  planned, we speak of an event, and notification
  of an event is done through an alert.

7
Alerting

• The sooner the alert arrives, the more options to
  handle it are available, and hence the more
  powerful event management.
• The soonest possible is to get the alerts on the
  exceptions when they occur in real time.
• The sooner the alert, the lower the event
  management costs.
• An alert may also regard an event that did not
  happen.

8
The required technology.EAI?
9
When to send messages to whom?

• In principle only exceptions
• deviations from planning
• When management is required business rules If
  X happens then send message Y to company Z.
• To whoever needs to know.

Not alway easy to determine may require to
compute future consequences --gt simulation
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Where are the business rules?
Supply chain event management system
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SCEM software functionality

• Real time overview Visibility
• Alerting
• Simulation
• Automated event management
• Performance measurement
• Enabler for continuous improvement!

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Questions

• How can SCEM be offered?
• Who can offer it?

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Answers

• 1 How to offer SCEM
• As a separate software package
• As a module of planning software
• As a module of visibility software
• As a module of an ERP system
• As a software service, by an ASP
• As a software service by a supply chain partner

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Answers

• Who offers SCEM
• SCEM vendors (Valdero, Vizional, V3, Yantra,
  Optum, Sockeye Solutions, Supply Solutions, River
  One and Blue Agave)
• APS vendors
• Execution and visibility software vendors
• ERP software vendors
• Visibility service providers
• Logistics service providers

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SCEMs value issues

• How to determine the added value
• Pricing
• Versioning
• Lock in and switching costs
• Network effects
• Suitable market entry strategies
• Standards

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More insights
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Scope of Event Management

• 1. Department level (logistics, production)
• ? Managed by department head, who is responsible
  in a functional organization
• ? Event management in best of
• breed software, or in ERP module

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Scope of Event Management

• 2. Enterprise level (real time enterprise)
• --gt Event management may lead to conflicting
  functional objectives. Requires a proces focus
  rather than a functional focus.
• ? Offered through ERP system, via best of breed
  systems communicating via (E)AI, via SCEM
  software.

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Scope of Event Management

• 3. Supply chain level, Extended Enterprise level
• ?management requires cooperation between
  different companies with different profit loss
  statements. Requires either supply chain focus
  and long term commitment, or a master slave
  relationship.
• --gt Requires communication software, e.g. EAI,
  and SCEM software.

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Who provides SCEM?

• 1. The OEM via a private trading exchange (PTX)

LSP
Supplier
Customer
Customer
OEM
Supplier
Customer
Supplier
Private Trading Exchange
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Who provides SCEM?

• 2. An independent market place, or ASP

LSP
LSP
LSP
LSP
LSP
LSP
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Who provides SCEM?

• 3. Supply chain integrator, who is allowed to
  managed the supply chain, a 4PL.

2nd tier supplier
1st tier supplier
Wholesaler
OEM
Distributor
3PL
3PL
3PL
3PL
Supply chain integrator
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Case sterile logistics
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Case 1 sterile materials
IN
Out
OT
CSU
Out
IN
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Case description

• Classical logistics management
• For every operation type there is number of
  sets of sterile equipment needed.
• Every morning all material is sterile and in the
  clean storage of the OT. To this purpose
  hospitals have a central sterilization unit,
  which works everyday till all used material is
  sterilized and delivered at the OT clean storage.
• Consequences
• (Small) hospitals have hihg fixed costs for CSU.
• Required storage space is maximum at a central
  location in the hospital, which can be
  purposefully used for many other business
  processes.

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Which unpredictable events exist?

• Emergency surgery
• Complications
• Variation in duration
• Instruments which are/go defect
• Instruments which are prematurely insterile
• Delay in transportation and sterilization

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Questions

• Design a more intelligent control concept wich
  reduces required storage space at the OT, but
  which doesnt use visibility or event management.
• Design a control concept that uses the full power
  of visibility and event management.
• How can visibility be attained?
• What are the most imported events and how do they
  need to be dealt with?
• Do you think an independent company could execute
  the process of sterile logistics.

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Business Opportunity

• Design an IT infrastructure which enables a
  better business process.
• Could this business process be caried out by a
  separate company?
• How would you offer the IT infrastructure?