FEATURE SUPPLY CHAIN SOLUTIONS
Transforming supply chain visibility in the Amazon era
By Bastian Nominacher, co-CEO and co-founder of Celonis
way to delivery. Process owners can see how efficient (or inefficient) their distribution network is, and identify any causes of delays. Larger systemic weaknesses in order processing can be pinpointed, and granular details like vendor data and invoice tracking can be drilled into.
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n two decades, Amazon has transformed itself from an online bookseller to the most dominant force in retail; the company is now taking on new challenges and disrupting other industries, such as cloud-based web hosting (Amazon Web Services) and groceries (Whole Foods). But consumer expectations are changing in the wake of its success. Most people now expect more choice of product, more convenience and full visibility from the moment they place an order. They want up-to-date information on stock levels, warehouse departure timestamps and delivery confirmation. This demand is causing a revolution and businesses are altering their logistics practices in response. Next-day delivery requires faster inventory turnaround- times and bigger logistical networks need higher levels of stock at more distribution centres. Companies need to ensure they have even more visibility into their supply chains to remain one step ahead.
EXTREME SUPPLY CHAIN EFFICIENCY Amazon has spent billions on R&D over the past 20 years to perfect its supply chain, and is going from strength to strength, recently beating revenue estimates in its latest financial results. Compare this to the wider industry and a totally different picture emerges. According to recent research, just six per cent of supply chain managers reported having complete visibility across their supply chain, and 77 per cent of respondents indicated having no visibility or restricted visibility. On top of this, the digital age and
32 DECEMBER/JANUARY 2018 | FACTORY EQUIPMENT
skyrocketing amounts of data that come with it increase businesses’ needs to streamline their processes. More data has been created in the last two years than the previous 5,000 years of humanity, and while businesses are sitting on a wealth of information because of this, they do not know how to make sense of this data without the right technology in place. Identifying issues within core processes can be like finding a needle in a haystack, but emerging analytics solutions have enabled organisations to make more informed decisions, sifting through the massive amounts of data being collected to uncover hidden patterns, correlations and customer preferences. A key limiting factor of traditional analytics, however, is that they have always required the business to have a hypothesis about where they want to look and what they want to investigate. In response, new categories of big data analytics, such as process mining, are starting to emerge that are helping organisations to pinpoint inefficiencies within their core business processes and along the supply chain.
TRACKING DIGITAL FOOTPRINTS Powered by artificial intelligence and machine learning, process mining technology uses the digital traces left behind by every IT-driven operation in a company and provide complete transparency into how processes are operating in real life. For supply chain professionals, this means having access to a visual reconstruction of the entire organisation’s business processes. Using this insight, they can analyse how well these operate from order entry all the
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KEEPING CUSTOMER SERVICE ON TRACK IN THE AMAZON AGE Many businesses are challenged with establishing a stable supply chain that ensures fast, on-time and in-full delivery to customers. Customers can grow increasingly frustrated if these demands are not met. But there are many potential root causes along the supply chain that drive up long wait times. Imagine a company that runs a global
supply chain with a large number of product variations and local market requirements – the task of identifying the exact problem and understanding the root causes for late delivery could be enormous. There could be issues in production, logistics, or the order handling process, driven both by internal and external factors: a production plant with quality issues could cause a lot of rework, a logistics provider could deliver too late or an order could be stuck in an internal approvals process. Eventually, the problem becomes visible
when customer satisfaction drops. To avoid this, businesses are turning to process mining as a means of reducing inefficiencies and monitoring compliance, production and supplier performance, and to cut throughput times and provide better supply chain visibility.
Below image: Copyright Celonis SE Celonis
www.celonis.com
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