from dashboard to supply chain cockpit to a fully ... · 3 i consulting special: from dashboard to...
TRANSCRIPT
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What lunar landings and missions to Mars
have in common with modern supply chains
Barkawi Management ConsultantsMunich • Atlanta • Dubai • Riyadh • Shanghai • Shenzhen • Vienna
Consulting Special:From dashboard to supply chain cockpit to a fully networked digital control tower
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Authors
Other publications by Barkawi Management Consultants
Barkawi Impact Story Special: DOKA With its more than 160 sales and logistics venues in more than 70 countries, DOKA is one of the world‘s leading companies in the field of construction form-work. But the success factor in the building sector is extreme flexibility and always being able to deliver, and that means high costs due to the necessity to keep large inventories. Our solution: The optimum inventory thanks to an inno-vative S&OP forecasting and supply concept!
Barkawi Booklet: A software decision made easy ‘Good-bye Excel chaos! Become a digital champion with the right supply chain software‘ is a concise aid to making the right decisions, and it shows how com-panies can transform the challenges of modern supply chains into measurable results, step-by-step, with an individually customized software concept. 40 pages of information, case examples and steps to achieving a successful technology transformation.
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Carena Barkawi, Owner and Managing PartnerTogether with Karim Barkawi, Carena Barkawi has been joint owner and mana-ging partner of the multiple-award-winning Munich-based consultancy Barkawi Management Consultants for many years now. Barkawi Management Consul-tants is part of the Barkawi Group. Carena Barkawi is CEO of the parent company and holding.
Dr. Andreas Baader, Managing PartnerDr. Andreas Baader heads our After Sales Service division. Before joining Barkawi Management Consultants in 2000, Andreas Baader held various executive positions at SAP AG, most recently managing the Application Design Sales Support division there. Andreas Baader studied engineering and wrote his doctorate in the field of aerospace technology.
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Consulting Special: From dashboard to supply chain cockpit to a fully networked digital control tower
INDEX
For those in a hurry: The contents at a glance 4
Introduction 6
1. Supply chain management isn’t everything, but without it, everything is nothing! 8
2. Integrated data platform: The beating heart of modern supply chain management 14
3. Supply chain cockpit: More than just a dashboard 19
4. Step by step: The road to becoming a digital champion 22
5. A look at the future of supply chains: Floating factories and flying villages 26
6. Control tower and war room: Operations center with a rapid response task force 29
7. Barkawi: Global supply chain excellence for digital champions 32
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Take a trip with us to the world of supply chain digitization. Read a brief summary of our top 10 here:
1. The demands on modern supply chains have been skyrocketing for years now. Compa-nies with logistics-intensive business models are faced with the challenge of moving goods, products, spare parts, etc. around the globe in perfect efficiency, so that the right amounts of the right things get to the right place at the right time.
2. Perfectly planned amounts and inventories are the prerequisite for being able to deliver.
3. No company nowadays can afford a warehouse that is filled to the ceiling, in the hope of being able to fill any order at any time. Excessive costs along the entire value chain are landing compa-nies in ever deeper trouble.
For those in a hurry: The contents at a glance
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4. Highly complex products require that compa-nies focus more on their core fields of expertise, so they are increasingly outsourcing after sales service, repair cycles and logistics services.
5. But outsourcing increases the complexity of the supply chain, because it means partners, sup-pliers, manufacturing contractors, forwarding services, etc. also have to be managed, often down to the second.
6. Then come unexpected events that can shock or even cripple the supply chain, such as tsunamis that destroy production facilities, earthquakes or flooding.
7. Political revolutions or decisions like unexpected punitive US tariffs on steel can place a huge question mark after a business model, compa-ny venue or production sites in certain countries over night, or raise doubts about the ‘foot-print‘. Events like these dramatically impact the supply chain, because it is the heart of every logistics-intensive enterprise.
8. Supply chain champions put their faith in digital solutions. Just a few years ago, when digitiza- tion was still in its infancy, these solutions were dashboards with limited functionalities.
9. Today they are complex supply chain cockpits that map all the relevant data and offer control options and alternative actions. Intelligent soft-ware, smart simulation and optimization tools
today calculate in milliseconds what used to take weeks or even months. And that is just the beginning!
10. In future there will be smart control towers that manage and monitor an entirely networked, digitized supply chain in real time. These control towers will offer unimagined possibilities with RFID and satellite technology, with geodata, image and voice recognition, big data, artificial intelligence, machine learning, predictive main-tenance and much, much more besides, that would even make NASA, with its Control Center, green with envy. Today’s digital champions are already in the starting blocks, because the deci-sion on who will be the winners of tomorrow is already being made today!
Come with us on a journey to the world of sup-ply chain digitization, where we provide numerous examples from business practice, concrete appro-aches, leading-edge concepts and an exciting look into the near future.
You can find out about all this in more detail on the following pages of our Consulting Special:
From dashboard and supply chain cockpit to a fully networked, digital control tower.
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Introduction
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Organizing a global supply chain with materials suppliers, manufacturing contractors and logis-
tics providers all around the globe is a lot like the work of a juggler who can keep numerous balls in the air at one time.
In modern companies, the digital heart of the supply chain resembles the NASA Control Center. Just like in a ‘supply chain control tower‘ all the data come together there in real time, are monitored down to the second, and analyzed and perfectly managed.
That is how Apollo, the Mars Rover et al. get into space, and your goods to your customers! But to what extent are supply chain cockpits, control towers and the like already in use in companies’ daily operations? What exactly are they capable of? Where will the journey lead?
What are typical challenges of complex supply chains, in which management, control and proactive action are a decisive competitive advantage? Here are some examples from practice:
In a factory in China, the machines come to a standstill because there are not enough telephone housings to continue work with. In the USA, retailers are refusing to accept delivered goods because of damaged pallets. A hospital stops working. No more operations can be carried out because the x-ray machine is broken.
A jumbo Jet can’t take off in South Africa because although the warehouse is full of replacement parts,
the one it needs is not among them. The New York Times can’t go to print late in the evening because the printing press is on the blink.
A spare part is missing: a heavy construction ma-chine worth half a million is inactive. As is the entire construction site as a result. A tractor isn’t working so the harvest couldn’t be brought in yesterday. Then, a thunder storm in the night totally destroyed the wheat fields.
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1. Supply chain management
isn’t everything, but without it, everything is nothing!
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What all these examples have in common is that they place very special demands on the sup-
ply chain. Standstills cost money, nerves and often customers! Construction machinery, x-ray machi-nes, airplanes, wind power plants, etc. are extremely expensive and tie up capital. In the case of the x-ray machine the situation can even be life threatening for patients if it takes days to repair.
Especially in heavily contested industries, a player can catapult itself out of the market if its supply chain is slower and less efficient than those of the competition. In many industries, much of the annual sales are generated in the time before Christmas. It is a disaster if the latest mobile phone unexpectedly can’t be delivered until after Christmas Day.
And time is money in retail, too. Speed is becoming ever more a success factor. Fashion logistics play to the beat of their own drum, because trends are short-lived in the apparel industry. The High Street giants Zara, Mango and co. bring out entirely new collections every fortnight that reflect the trends from the catwalks and street fashion almost instan-taneously.
If the supply chain is too slow in this multi-million- dollar business, the trousers’ cut, the heel height, the skirt length or color might well be already out of fashion when the goods hit the shops. Then tons of products lie heavy as lead on the shelves, and you could just as well toss them into the ocean, because that is where precious time is lost, by manufacturing in the Far East and transporting by ship.
Fashion giant H&M is currently feeling this weak- ness of its supply chain, and its share price has tumbled. But perfectly tuned, lightning fast supply chains are not only of existential importance in the fashion industry.
Supply chain management is everything, 24/7: from toothpaste when you get up in the morning and go to bed at night, to your egg at breakfast, to finished concrete components at a building site, to replace-ment parts for an industrial machine.
Without replenishment, the production lines at BMW would come to a standstill, the hospital wouldn’t be able to use its broken MRT, the building site wouldn’t get its windows delivered and Amazon wouldn’t generate 100 billion euros in annual sales.
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Speed is the key: Tomorrow, today’s trend will already be from yesterday
In times of globalization, goods are often moved around the entire planet, crossing time zones and national borders, and are developed and/or manu-factured in fragmented processes – either within the company or by external service providers. The fickle- ness of trends is yet another challenge, because tomorrow, today’s trend will be from yesterday – and there are plenty of stories about manufacturers left sitting on mountains of unsellable products or that couldn’t run their machines for days because their supply chains weren’t efficient enough.
And as if that weren’t complex enough already, manufacturers today have to manage external part-ners in clever, cost-saving systems that require the perfect interplay of all parties involved: PUDO, hub & spoke, cross-docking, merge-in-transit, etc. are extremely demanding concepts. What you need here are digital solutions to direct and orchestrate processes, inventories, deliveries, etc. efficiently.
Many companies know how essential it is to intro-duce digital solutions into their supply chain, but are overtaxed by the complexity of the decisions that need to be made. And implementing hard and soft-ware and converting processes while in full day-to-day operations is no small matter either.
Indeed, many companies have been putting off the decision to launch digital solutions for their supply chain for years already. But most of them know: this is not a ‘nice to have‘, it is a ‘must have‘, if they want to continue to succeed in the face of global compe-tition.
Benefit: External partners enable you to concentrate on your core business
The race against time is the order of the day in many industries. Tough competition increases the need to concentrate on the core business. For example, chip makers like Intel that file on their unique algorithms, while Apple and Co. come up with new technical gimmicks.
Many enterprises in these innovation-driven indus-tries today outsource large parts of their value chain to external specialists. Many mobile-phone compa-nies haven’t made their own phones for ages, and by not doing so they free up capacities for the things they do best, such as creative development, ground-breaking design, innovative technology, etc.
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PUDO: This stands for ‘Pick-Up Drop-Off Point‘, which is a lockable box somewhere central like a deposit locker at a gas station or pack station, where replacement part deliveries are deposited. Technicians don’t have to drive to the warehouse every time they need something, instead these generally unmanned PUDO boxes are filled from a delivery van, which also takes the old parts in the box away. The clear benefit here lies in the shorter travel times and route optimization!
Cross docking:Is a concept that makes use of the time and cost bene-fits of pre-packing at the sender. Then, the goods invol-ved only have to be trans-shipped at the intermediate warehouse or distribution center. Here too, the delivery is not directly to the customer, so consignments can be bundled making the logistics even more efficient!
End of Runway:This logistics concept is good for high-grade and time- critical goods such as high-tech products, medical techno- logy or food. It stands for very late acceptance times and short distances near the runway of cargo airports. Industrial companies can make use of highly specialized, custom-tailored services from logistics service providers at selected locations, and have their products refrigerated, pre-assembled, repaired or stored on their behalf. Goods from this kind of specialist logistics center are at the express hub within 30 minutes of the order being placed, and underway by plane, train, road or boat in a very short time.
Merge in Transit: Another frequently used concept in logistics! Parts come from different places or warehouses and come together en-route to the customer where they are bundled together – cheap, fast and with the shortest possible distances travelled!
FSL: The idea behind a ‘Forward Stocking Location‘ can be found in the word ‘forward‘, which means ‘closer to the customer‘. Similarly to PUDO, FSLs are miniature warehouses that the manufacturer operates itself or through a service provider (e.g. DHL), so that key replace-ment parts or products are closer to their place of use and can get there faster when needed.
Hub & Spoke:This concept, implemented millions of times the world over today, has its name from its resemblance to a bike wheel. In lieu of 1:1 relationships between senders and recipients of goods, the products are all bundled in a central warehouse, from where they are sent in all direc-tions of the compass, which is cheaper and has less of an environmental footprint than sending each part indivi- dually.
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But in order for it to work perfectly all around the world, the individual functions of the value chain, such as planning, development, procurement, pro-duction, distribution, service, etc., have to be closely intermeshed and dovetail like the cogs of a precision wristwatch.
And if you then out- source this already complex cooperation to development firms, de-sign agencies, contrac-tors, forwarders, logis- tics service providers and repair workshops, the complexity and work required to mana-ge the process increa-ses even more, while you lose your influence over it all!
So, if the manufactu-ring contractor in Asia doesn’t have enough of the Gorilla glass screens in stock for the Apple iPhone, the entire ramp-up curve for the new device is stalled worldwide – no fun for anyone at Christmastime.
With large inventories in the warehouse, manufac-turers and contractors are on the safe side when it comes to their ability to deliver, but from a cost point
of view that can be crippling. In most industries, the pressure to be inexpensive means you have to make a perfect three-point landing in all the involved dis-ciplines: development, procurement, production, sales. Nobody in the modern world can afford to keep their warehouse full to the brim anymore!
But perfect inventory management, for example, is not an isolated dimension. It is linked to procure- ment, production, sales, returns and much more. Everything is in flux and interconnected. Excel tables and databases ‘taped together‘ separately by each individual department are no way to manage a modern, high-performance, global supply chain!
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Disadvantage: External partners increase complexity and the amount
of coordination required
So, especially in bulk business with complex logi-stics-intensive business models, manufacturers are dependent on extremely high-performance techno-logy and service partners. The volumes and num-bers of parties involved are enormous, making coor-dinating them extremely complicated.
And then, as if it weren’t complex enough already, unforeseen events occur and make things many times more complex again. For instance, the earth-quake and atomic catastrophe in Fukushima didn’t only bring the supply chains in Japan to a total standstill. The volcanic eruptions in Iceland, the floods in Thailand and the Lufthansa strikes in Ger-many are all examples of unforeseen problems for supply chain managers and their global transport flows.
But how do you control such complex process chains? What are the risks? How do you recognize them in good time? How can you be proactive in- stead of reactive like a dog running after a stick?
And most of all: How can companies manage not only themselves, but also their service providers, so that the overall process runs smoothly and mobile phones, sweaters, cars, dialysis machines, spare parts for large machines and plants all get to the right place at the right time and in the right amounts?
Modern supply chains: Coordination is
a risky feat
For many decades it was customary to manage the supply chain more or less manually. The basis for this were often large databases, exorbitant Excel tables, constant coordination of individual data sets and key employees not networked with one another, the makeshift connection and coordination of innu-merable service providers, suppliers and contractors by e-mail, fax, telephone… . All in all, an unbelievable amount of work on an extremely fault-prone basis.
Because if the boss of planning didn’t calcu-late enough material, Procurement didn’t buy enough, production stopped, and the Sales team had nothing to offer the customers.
No warnings, no alarms or alerts from a clever system, no innovative forecasting model with an attached manufac-turing solution drew their attention to the imminent downtime.
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2. Integrated data platform: The beating
heart of modern supply chain management
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Complex supply chains can no longer be control-led manually nowadays. The heart of a modern
supply chain center looks a lot like NASA’s futu- ristic Control Center, where all data come together in real time. Modern, global supply chains are similarly complex to missions to the moon and Mars.
An ever-increasing number of companies are setting up control centers with the aid of specialist consul-ting companies, where all the relevant data from the company, supply chain and numerous service pro-viders at all stages of the process converge at one central location.
Trinity Rail (rail vehicles), DELL (computers) and Rolls Royce (aircraft engines) are all part of this genera- tion of logistics perfectionists that want to have their entire supply chain in plain view in their ‘War Room‘.
Data from procurement, production, the warehouse, transport, etc. all run across numerous monitors here – some of them even in real time. It is data on essential key performance indicators (KPI) such as product quality, sales figures, financial status, return rates, factory capacity utilization and much more.
The Control Tower of the future is capable of even more than that. It enables risks and trends to be anti- cipated, immediate intervention and counteraction in the case of discrepancies, and most of all the flexibilization of the entire process chain in real time, with its often hundreds of involved parties.
In future, every step will be represented by a KPI, making it controllable as soon as deviations arise.
The temperature curves of the supply chain cock-pit deliver the final data and clear instructions for action – and that within a complex, interconnected system with multiple variables.
An example: The Darmstadt-based chemicals and pharmaceuticals manufacturer Merck achieves strong glitter effects and highly intense colors in car paints with its product Xirallic. But after the earth-quake in 2011, Xirallic was a big problem for the entire automotive industry.
Of Merck’s four color-pigment plants around the world, the only one that produced the popular Xirallic was in Onahama – in the middle of the earthquake region.
This had considerable consequences for the auto- makers, although at the time Xirallic was only a small part of Merck’s business with sales of around 325 million euros compared to the group’s consoli-dated sales of 9.3 billion.
As it turned out though, it was an important part, because Xirallic is used in a large number of metallic paints, and without it, large numbers of paints could quite simply not be mixed.
And that sent tremors through the entire indus-try: Ford, Chrysler, Volkswagen, BMW, Toyota and General Motors all used paints with Xirallic in them, and they were all left searching desperately for an alternative, of which there weren’t many to placate the harried planners and supply chain specialists in those companies.
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Numerous production lines ground to a halt. The classic risk of single sourcing had struck home with a vengeance, and the help given by the supply chain software of the day was fairly meager, working for weeks on end on scenarios and supply chains with little to no success. Today, special software takes care of that kind of issue in milliseconds!
From 0 to 100 in milliseconds,
with special software!
But how can companies organize their supply chain and materials management so cleverly and flexibly that the costs, inventories etc. are always optimal, while at the same time being able to react quickly and efficiently to unexpected events?
And by that we mean not only natural disasters, but also insolvent suppliers, unexpected delivery stops, materials bottlenecks and even volatile customers with fluctuating demand that cannot be forecast, or an American President who slams punitive tariffs on German automobile imports overnight.
The basis for rapid reactions and well-founded decisions are simulations and calculations in real time, scenario techniques, mathematical evalua-tions, integrated and big data, collaboration and connectivity with partners and their data and so on and so on – all interconnected, on call and analyzable at any time!
Only then can an enterprise be proactive instead of reactive. Action, not reaction – that is the mantra of digital champions!
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There is good news and bad news on that front. The bad first: The bad news is that a perfectly orchestrated sup-ply chain will increasingly become the standard. The digital champions are putting the ‘second movers‘ under a lot of pressure to catch up, because custo-mers get used to service levels and delivery speeds fast. Amazon’s same-day delivery sets standards for the entire industry that aren’t always beneficial.
The good news is that the digital champions became the first movers gradually. You can introduce smart planning software step by step, connect production and implement a smart sales concept in a well-planned and considered sequence. But the compa-nies that haven’t started yet should get a move on – at best yesterday!
Action not reaction is the mantra of digital champions
Big companies have been using big ERP solutions for many years now. SAP is a good example of a functional, global software product that creates an excellent connection between all parties involved in the process. But many companies are intimidated by the cost and time required for the implementa-tion. And what is more, the recognized end-to-end solutions don’t always master every issue with the excellence that best-of-breed solutions for special disciplines can. Demand sensing, forecasting, etc.
are far more powerful and tailored to the customer’s individual challenges in many smaller products than the full-line solutions could ever accomplish.
The concern that modular individual solutions with which you can ‘pick out the cherries‘ might not be able to be perfectly connected and integrated is also a thing of the past. Technically, connectivity is guaranteed today!
So nothing stands in the way anymore of digiti-zing high-performance, global supply chains with the best possible software solution for each special issue. These solutions all come together centrally in a supply chain cockpit, and are controlled by state- of-the-art technology and smart software that use innovative algorithms, machine learning, deep learning and AI on the basis of big data.
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The ‘right‘ inventory thanks to smart technology
Everyone is talking about digitization – we do it! But what does that actually mean? An example from our consulting practice:
Our client, a global manufacturer of agricultural machinery, disposes over a huge network of over a thousand independent dealers that do not share a software solution. Agricultural machines are very expensive – more than half a million euros for a trac-tor are no rarity. And tractors mustn’t break down, least of all at harvest time! So that they don’t, agri-cultural machine dealers keep tens of thousands of spare parts worth millions of euros in stock.
Each dealer has almost the same replacement parts, and yet the part that is needed always seems to be the one they don’t have. So their shelves are chock full of parts so they can always deliver, which is good, but the downside is that millions of parts and 100 % ability to deliver means costs explode, and their customer’s expensive machine is still sidelined because the required part is not in stock. Costly and annoying. So what is the ‘right‘ inventory?
Each dealer’s planning process is drowning in minu-tely detailed Excel tables. Each department and each dealership has its own.
And the fragmented individual IT solutions don’t help. The inventories are too big, but the right parts
are missing, and that leads to expensive write-offs at the end of the year. That is everyday reality in many companies. How can you do it better?
We have developed a smart digital answer to the two questions ‘What is the right inventory?‘ And ‘How can the dealers be better connected with each other?‘. On our ClearOps platform, we now have almost 1,000 dealer venues from around the world connected in the cloud.
These dealers of replacement tractor parts find the parts in their digital shopping cart in the morning that will be ordered from them that day. We know which ones they will be in advance!
Magic? No. Just smart forecasting models combined with data from cutting-edge sensor technology that make predictive maintenance, big data, weather forecasts, etc. possible.
As a result, the dealers have far fewer parts in stock. Their expensive inventories shrink enormously, but they still have the ‘right‘ parts that their customers actually need from day to day.
In this agricultural machinery project case, this leads to lower costs and 8 % more sales of spare parts, because a customer who requests a non-critical part but can’t take it with him on the spot, will often simply not buy it. But if it is there because smart forecasting has put it in the warehouse, the spontaneous purchase means higher sales!
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3. Supply chain cockpit: More than just a dashboard
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In our ingenious cloud solution, manufacturers and dealers from all around the world come closer
together digitally. Needs are managed in real time and can be anticipated proactively in the system. This is a huge benefit for all involved, because part availability rises while costs fall!
And our supply chain cockpit works with figures, data and facts in real time, creating an up-to-the-second temperature curve, unlike dashboards, which often work with static figures that are updated and ente-red sporadically.
In contrast to that, the supply chain cockpit has a permanent connection to, for example, the central warehouse. If an employee removes a part using the modern Pick-by-Scan procedure, the digital part-ID means the inventory in the system changes imme-diately. Incoming orders are booked in real time, and so are sales – and you can access the figures at any time!
The quality and quanti-ty of data are better in the supply chain cock-pit too. Conventional dashboards generally record data without as-king what they mean or interpreting them.
Is a KPI of 25 good or bad? Can 25 even be a real value? Or is the
figure already obsolete and in need of scrutiny?
Errors occur in large, complex supply chains. That is an unavoidable fact. The question is more how long you drag those errors along with you as ballast. A good supply chain cockpit notices errors. A good supply chain team equipped with a smart digital solution delivers robust data.
Because the data are always being tested, repaired, optimized and even replaced, depending on what the users need from their supply chain management.
Typical dashboards don’t offer that smart flexibility; they tend to let unneeded figures stay in the mix of rigidly predetermined evaluations, or they apologize to the customer that the analysis they need unfor-tunately isn’t provided for in the system. For a good supply chain cockpit, on the other hand, there is no such thing as ‘can’t‘!
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Smart spare parts forecasts for costly agricultural machines
And a solution connected up with a supply chain cockpit offers another benefit as well: that you can predict the future with it.
For example, for our large agricultural machinery manufacturer with its 1,000 interlinked dealers, we can we can make very early and extremely precise forecasts with ClearOps about the upcoming workload, that go far beyond normal forecasting.
With the result that the central warehouse can be in-formed in good time of an unusual wave of upcoming orders that may exceed the normal ability to deliver. With a smart supply chain cockpit, you can slow down processes, or speed them up – acti-vely manage them!
The precise forecasts also enable you to control the supply of replacement parts pro- actively in times of bot-tlenecks – if bottlen-ecks ever even arise. In one case of an in-solvent parts supplier,
a shortage occurred because certain parts could no longer be delivered. There was, however, a solid base inventory of those parts still left in stock. Those parts could then be sent to important A-customers, managed centrally, instead of having a dealer quick-ly buy up the remaining stocks for itself in order to keep his little C-customers happy with a local buffer of products. When managed centrally, however, no high-volume A-customer is left behind!
Summary: ClearOps is the perfect solution for manu- facturers with large, independent dealer systems that want to guarantee their customers quality and professionalism like a ‘customer fill rate‘, at lower costs and higher sales!
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4. Step by step: The road to
becoming a digital champion
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Falling costs and rising sales? Nobody would say no to that! And yet many companies put off im-
portant decisions on digitization because they aren’t sure how to start and what comes next.
But the road to becoming a digital champion begins with one step and continues with more of them. The pioneers in digitization started the gradual journey many years ago, before the word ‘digitization‘ was on everyone’s lips.
An example of this from our everyday consulting experience:
The network outfitter Nokia wanted to improve its footprint by increasing the availability of compo-nents for its customers, the mobile telephony com-panies, while at the same time reducing inventories.
Barkawi introduced an ‘iHub‘ into the company in which the planning, needs forecasts, production site orders and all delivery processes were grouped to-gether. The own factories, suppliers, the factories of the contract manufacturers, their materials flows – all bundled together in an ‘inbound hub‘ – put Nokia in a position to deliver to any venue within 48 hours, which is a huge competitive advantage for it and its customers.
The project was a resounding success for all invol-ved, and Barkawi won an award for it in the ‘Best of Consultants‘ competition run by Wirtschaftswoche magazine.
Digital solutions can be built fantastically on that kind of logistical concept, which is still largely ancho-red in the analog world. At another client – a major international provider of mobile phones – we imple-mented a supply chain cockpit step by step.
Now, the key data from the supply chain cockpit all come together in one room. Short decision-making channels minimize reaction times. And that is just the beginning.
Systems like Kinaxis are the basis. ‘What-if‘ simu-lation tools make it possible to manage the supply chain with foresight. You have to know which diver-gencies in your supply chain are critical and which partner interfaces are so important that they should be permanently monitored. What are the alterna- tives? How fast are the reaction times?
The digital champions started asking themselves these questions some time ago, and then gradually implemented the answers in their systems.
The company Airbus, for example, runs a modern supply chain cockpit in the form of its digital ‘Custo-mer Support Center‘, which can get a faulty A380 back up in their air in no time flat. And as we have said: that is just the beginning!
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‘Rightsizing‘: Out of the data jungle and on to relevant KPIs
KPIs have experienced an enormous inflation in recent years. Nearly every figure a company pro-duces is now called a KPI. But the essential thing with iHubs and supply chain cockpits is to reduce the enormous volume of data down to the impor- tant parameters. The goal has to be to filter out the important KPIs from the abundance of data through ‘rightsizing‘, so that the supply chain can be con- trolled effectively. The key is obtaining relevant data, forming ratios with them that represent the supply chain honestly and reliably in real time.
Some key indicators for companies are, for instance, Service Level/Fill Rate, Available-to-Promise (ATP), Turn Around Time (TAT), Order to Cash, On Time Delivery (OTD/OTDR/OTDC), etc. We are experts at defining the ratios that are truly relevant, and then optimizing them! ‘Customer Fill Rate‘, for example, is one of the most important ratios of all in many companies, and a key yardstick for how well the logi-stics are working. The question is: What percentage of the orders are delivered to the right place at the right time in the right quality? And of course, a figure near 100 % is what everybody wants to achieve.
One would think that a figure like that is objective and gives a good overview, especially when conside-red together with the key figure OTD.
‘On Time Delivery‘ refers to the punctuality of the delivery and the fulfilment of the delivery promise. But OTD divides up into ‘Requested‘ vs. ‘Committed‘. And that is where the problem begins: The customer calls and needs the product by Tuesday, 5 pm. So it clearly ‘requests‘ a defined date (OTDR). The supplier can’t do that and offers the customer Wednesday, 6 pm, ‘committing‘ to a day later than requested (OTDC). Now, if you judge the fulfilment of the de-livery commitment by the OTDC, the manufacturer has kept its promise 100 % – but it may well have lost the customer!
One of the goals of our digital platform ClearOps is to optimize precisely these figures. Its data-based automatic function has accomplished that 90 % of the parts in the plannable product range are planned automatically and do not require any manual work steps at all anymore. The planner or system admini- strator only intervenes in the forecasting in excep-tional cases.
Monotonous manual upkeep of the system with hundreds of thousands of SKUs is no longer neces-sary, and the resources that this sets free can now be used more effectively elsewhere. Today, the staff have more time for value-adding work and their core fields of expertise: customer support, sales, guaran-tee processing, etc.
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Modular structure: Speed and individual customizing guaranteed!
In numerous other projects, Barkawi has built up an individually tailored, smart supply chain cockpit for clients in the most varied of industries and the broa- dest range of logistical requirements. Some are ba-sed on our innovative, proprietary cloud-based plat-form ClearOps. Others use providers on the market, such as Kinaxis or SAP IBP. Always customized to each client’s specific needs and increasingly also combined with other smart concepts. Because as we have said: connectivity is guaranteed nowadays!
The modular structure facilitates speed and indi-viduality in the implementation. Open-source sys-tems the likes of Apache make the installation in-expensive. In Qlik Sense, the market’s best provider of mass data analysis, we have found the perfect partner for enhancing the performance of the sup-ply chain cockpit, which also contains cutting-edge database technology components for data integra-tions, so that all the numbers, data and facts find a home.
The next step is then the expansion into a compre-hensive control center with data evaluations and control options in real time, with access to big data, data models based on machine and deep learning, simulation and scenario technology and much more besides. Ideal if one wants to play with the big boys in an increasingly competitive environment, even with an extremely complex logistics business model.
But that is not the end of a company’s development into an agile, proactive champion. Further changes will be needed to prevail in the face of ever more global competition. Permanent change, far more flexibility than today and an extreme dynamism of the markets and their players are coming.
And the technical development of the digital solu-tions is also highly dynamic and will soon offer fasci- nating possibilities that transcend by far the iHub and supply chain cockpit. Big data, interconnected data, voice and image recognition software, artifi-cial intelligence and the methods of Watson, IBM’s genius computer, will soon make a control tower possible that would impress even NASA!
Today’s digital champions are already in the starting blocks, because that control tower will be based on solutions that they have already implemented.
The decision on who the leaders of tomorrow will be is being made today!
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5. A look at the future of supply chains: Floating factories and flying villages
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Every type of future business will experience an extreme acceleration. The markets, develop-
ments, etc. are speeding up. Speed will become the key factor, and that will confront OEMs, brands, sup-pliers, replacement parts companies, logistics and everyone involved in the value chain, with entirely new and unforeseen challenges!
Only the fastest, most flexible and innovative will survive. Enterprises that underestimate a trend and react too late will shoot themselves out of the mar-ket ever faster. Cost cuts, product quality and many other of the customary success factors will fall into the background against a far more important crite-rion: flexibility!
If a devastating tsunami and earthquake stop en-gine production in Japan, the automobile factory of the future will take over its production on the other side of the planet within the space of hours. Flexible business concepts, agile production plants, floating or flying cities, mobile electricity and energy con-cepts will be existential. The factories of the future will be modular, and hence mobile in every sense of the word!
Leading edge module technology will make it pos-sible to start production in a minimum of time. In the past it often took more than a decade to open a new factory, but if a factory can’t be in operation until after many years, and wages have multiplied in the meantime making it no longer economically viable to manufacture there, billions will have been wasted.
The same applies if social unrest breaks out in a sup-posedly peaceful country during the construction period, turning the venue into a war zone and a once good decision to build there on its head.
Sudden changes of statutes, tariffs or penalties, even extreme currency fluctuations like the fall of the Rubel in Russia can reverse a good location de-cision in no time. Such decisions, production and warehouse networks, etc. will be subject to ever shorter revision cycles, but already today the dyna-mic concepts exist that respond to these things:
Floating-city platforms housing software super brains without a green card outside the three-mile zone of San Francisco will presumably move on as soon as a new, more attractive Silicon Valley opens up with the need for workers.
Concepts like floating cities on the ocean have been in consideration for many years now in US conur-bations like San Francisco that need well-educated young workers but have highly restrictive immigra-tion policies. Clever Indian programmers could live and work there without a green card.
Blueseed, the visa-free community of a US startup that turns enormous cruise ships into floating cities, wants in the near future to offer 1,000 clever minds from all over the world a floating home. This ‘Silicon Ocean‘ would be the start of a trend towards floating cities with the complete infrastructure of a city, with companies and jobs, homes, parks, hospitals and
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horizontally-growing vegetables (‘vertical farming‘) for self-sufficient living.
3-D printing, aka additive manufacturing, will take on a whole new importance in these cities, because you can deliver to a cruise ship around the clock with drones, but by then it might be more up to date and/or easier and/or cheaper to simply print clothes, spare parts and even food. The Adidas ‘Speed Factory‘ is already showing us the way in Germany.
In addition to drones and robot ships, self-driving cars and trucks, other transport vehicles will shape the future as well: new gigantic Zeppelin balloons will transport unspeakable loads from A to B. They will be able to take entire wind power plants to places without roads.
Already today, Blimp Cargo Vehicle – the world’s first Super Zeppelin – can transport 66 ton loads of up to 137 meters in length. It needs no runways and can
float over undeveloped terrain.
But that is just the be-ginning! Multiple huge Zeppelins may even be joined together to form floating villages where workers can be housed who squeeze the last drops of oil out of the most distant corner of
Siberia, and who then fly to the next bore hole when the well finally runs dry. All of these examples share one common denominator: flexibility.
Flexibility is the key, but it requires transparency. Real time information is essential. Nothing is older than yesterday’s data! The companies that have flexible value chains and all data under control will be the successful players.
Because if a cargo delivery sinks in a storm on the ocean, or if a war breaks out making production in a given country impossible, the successful enterprise will be the one that can act proactively and re- structure its supply chain fast, and not the one that reacts when it is already too late.
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6. Control tower and war room: Operations center with a rapid response task force
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Software that captures and maps every step of the value chain, that can be used to record and
run through situations second-by-second, that can simulate scenarios and be used to optimize cost- benefit ratios will support the digital champions of the future. Their company head offices will become operations centers, then control towers with high-tech equipment that will even overshadow NASA’s Mission Control Center.
Post on strike today? The system is already aware of that from its image and voice recognition and smart connection to the media. Traffic jam on the A8, but the goods or replacement parts mustn’t arrive late? That has long since been fed into the system too – fully automatically. And the weather forecast is not only linked to calcula-tions and simulations of the criticality of replacement parts for expensive agricultural machines at harvest time.
The first challenge will be to translate political data on sudden Presidential decisions about tariffs on steel and aluminum products from the TV news round-up, online weather data, traf-fic reports – in short from the widest range of data sources from the real world – into data structures that can be operationalized.
The second challenge will be to put those numbers, data and facts trans-
lated from the real world into the digital one into a system of artificial intelligence (AI), and to convert them into recommendations for action using lots of smart calculation logic.
And the third challenge will be that all this will hap-pen in real time – instantaneously! In the best case even before it happens. Many industries are already showing how this can be done with predictive main-tenance.
Unimagined playgrounds will open up here that go far beyond today’s sensor technology in agricultural machines, and in ‘Max‘, the predictive-maintenance lift systems from Thyssen-Krupp.
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Task force instead of stately executive floors
But speed will also affect other areas: grand weekly board meetings with Excel tables that look like they come from the Middle Ages will mutate into inter-disciplinary ‘war rooms‘ that exchange figures up-dated by the minute. The board members’ individual offices will disappear and be merged together into control centers. A new type of manager will be suc-cessful. Hierarchies will be converted into interdisci-plinary turbo task forces. Long-term strategies and medium-term tactics will be taken to the extreme through the daily obstacle course.
Flexibility is the key: the world is
becoming a travelling circus
The world is increasingly becoming a flowing mass, like oil in a hot Teflon frying pan, sliding around in little pearls. Modular factories, highly dynamic enter-prises, flexible manufacturing networks will migrate around the world like a travelling circus reacting to changing wage costs, unexpected wars, weather di-sasters, etc.. Extreme versatility and flexibilization will be what characterize the winners of the future.
Only the cleverest, the fastest, the most flexible will survive! Charles Darwin was right about evolution even 150 years ago. His law applies to people and
for companies, yesterday, today and tomorrow: sur-vival of the fittest. And ‘fit‘ means adaptable. That is what has enabled us humans to survive for so many thousands of years.
Companies have to be adaptable too, but not over thousands of years. If the delivery sinks in a storm at sea, the control tower’s simulation software has to have an alternative within minutes! Products from Kinaxis and O9 are already capable of that today, and they are merely the vanguard for an even bigger solution: the control tower!
As we have said: flexibility is the key, and it is flexibi-lity that defines a control tower. It generates flexibi-lity for companies and entrepreneurs, because they will be the managers of tomorrow – the many suc-cessful company founders with their global startups that will shape the markets of the future.
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7. Barkawi: Global supply chain
excellence for digital champions
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Barkawi has executed innumerable successful projects and developed and implemented smart
supply chain cockpits for today’s digital cham-pions. We work together with the best companies in the business and are free and autonomous in our decision making (see pages 34 and 35).
Absolute independence is a key principle for us. That is why we are not associated with any major audi-ting firms or software makers. Freedom of choice, independence and absolute integrity characterize our value culture and the people who work for us. They enable us to accomplish the best results for our clients.
You want to concentrate on your core business? No problem! On the contrary. Supply chain cockpit and control tower can also be operated as an individu-ally tailored ‘delivery service‘. SaaS – Software as a Service – is the magic word here.
You decide if you want to operate the portal your-self and do the evaluations and analyses in-house with your own expert team, or if you prefer the full- service option including hosting and data retrieval updated every day by our specialists.
Make or buy – normally not an easy decision to make. But in this case it is! And it is about much more than just a piece of software in the cloud. Many compa-nies can offer that. We offer more: global supply chain excellence. That is what Barkawi Management Consultants stands for.
Big data, digitization, networked data, collaboration and connectivity bring with them amazing opportunities! Let’s talk about which challenges in your demanding supply chain can be transformed quickly into measurable succes-ses with our digitization expertise!
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IT tools along the supply chain
ERP
Supply ChainVisibility & Control
CRM
Planning & Inv. Management
Order Management
Procurement Supply & Collaboration
Warehousing
BI/ Analytics & Management
Knowledge/Content Management
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ERP
Supply ChainVisibility & Control
BI/ Analytics & Management
Knowledge/Content Management
Pricing
Manufacturing Transport Telematics
Transport / Distribution
Service Operations
Customer Interface
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Barkawi Management Consultants Munich is an international management consultancy that focuses on supply chain management and after sales services. Karim Barkawi founded the company in 1994, which today employs more than 200 people and has offices in Munich (HQ), Atlanta, Dubai, Riyadh, Shanghai, Shenzhen and Vienna. Among the clientele of Barkawi Consulting are globally active companies with logistically complex business models, like Henkel, CocaCola, Daimler, Lufthansa, Nokia Networks, Philips and many more besides.
Barkawi‘s hands-on implementation approach can be seen in its own entrepreneurial spirit. Its know-how and entrepreneurship have been the incubator for a number of new business ideas that Barkawi Management Consultants Munich has realized over the years, such as for B2X, an after-sales services outsourcing company.
Today, Barkawi Group encompasses eight compa-nies in various industries that employ almost 1,200 people in 30 countries.
Barkawi Management Consultants – The entrepreneur among consultants!
About Barkawi Management Consultants
“We combine consultancy with real operational responsibility. We are living proof that consultants can be successful implementers. “Karim Barkawi Founder and CEO
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About companies of the Barkawi Group
Barkawi Management Consultants The entrepreneur among consultants!
Teqcycle Take-back and trade-in solutions for smart phones
ClearOps A software solution that optimizes global supply chains
star/trac Digital yard management for managing motor vehicle traffic
B2X Cloud-based customer- care concepts for smart phones and IoT
Fleetster Innovative software for vehicle fleets and mobility
TEQPORT A virtual marketplace for surplus industrial stock
servify A personal assistance app for users of consumer electronics devices
Find out more about Barkawi Group at: www.barkawi.com/en/about-us/barkawi-group
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DisclaimerData contained in this document is not binding and serves information purposes only. Liabi-lity claims filed against Barkawi Management Consultants GmbH in relation to material or intangible damages resulting from the use of this publication shall be principally excluded.
© 2018 Barkawi Management Consultants GmbH. All rights reserved.
Barkawi Management Consultants GmbH & Co. KG Baierbrunner Str. 35 81379 Munich I Germany Phone: +49 89 749826-0 Fax: +49 89 749826-709 [email protected] I www.barkawi.com
Excellence in supply chain managementBarkawi‘s strict focus on supply chain topics leads to outstanding and sustainable results in projects with specific challenges. We roll up our sleeves and muck-in together with our clients, and we make no decisions without well-founded numbers and ana-lysis. Because numbers, data and facts give us and our clients the confidence that we are making the right decision!
Based on strong data and a profound understan-ding of the operational conditions and business pro-cesses of our clients, we develop new concepts and strategies, optimize processes and organizational structures and then realize them. Because that is the only way solutions become true results. The fact that we do the actual implementation is another USP of Barkawi Management Consultants.
Short communication paths for a successful technology transformationDr. Andreas BaaderManaging [email protected] +49 89 749826-712
Henry [email protected] +49 89 749826-803
Mike LandryManaging [email protected] +1 678213-2940
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We combine consultancy with real operational responsibility! Barkawi has won numerous awards as ‘Best Consultant‘ and ‘Hidden Champion‘, and we are re-peatedly to be found on the winners’ podium as a specialist for supply chain management and after sales service. Our successes speak for themselves!
Award-winning consulting – our successes speak for themselves!We are a specialist consultancy for the mathema-tical side of supply chain management. Because only numbers, data and facts provide a solid foundation for finding the answers to key questions like: ‘What are the reasons for our performance problems?‘ To find the answers you need transparent numbers and not an Excel chaos in a data jungle.
Building intelligent mathematical models, model-ling with sophisticated simulation and optimization procedures and using smart big data is what we do every day as consultants, providing the perfect data foundation for high-performance supply chains, modern supply chain management and profitable after sales service!
2006
Hidden Champion Hidden Champion Hidden ChampionBest of Consulting
Best of Consulting Hidden ChampionBest of Consulting
Beste BeraterDigital Transformation Award
Beste Berater Beste Berater Hidden ChampionBeste Berater
2012 20162009 20152014 2017 2018
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The demands on modern supply chains have been increasing rapidly for years now. The challenge is to move goods, products, spare parts, etc. around the globe in perfect efficiency and orchestrate suppliers and service providers worldwide brilliantly. The right amounts of the right things at the right place at the right time – that is the objective. The digital heart of the supply chain is becoming ever more similar to the Control Center of NASA. Like in the SC Control Tower, all data come together there in real time, are monitored, analyzed and perfectly ma- naged up to the second. That is how the Apollo and the Mars Rover get into space, and goods to the customer!
Barkawi Management Consultantswww.barkawi.com
Innovative enterprises are putting their trust in digital solutions. Just a few years ago, these were dashboards with limited functionalities. Today they are complex supply chain cockpits. And tomorrow it will be smart control towers that control and monitor an entirely networked, digitized supply chain in real time. Control towers will offer unimagined possibilities with RFID and satellite technology, with geodata, image and voice recognition, big data, artificial intelli-gence, machine learning, predictive maintenance and much, much more, that would make even NASA green with envy.
But to what extent have supply chain cockpits, control towers and the like already established themselves in companies? What are they actually capable of? Where will the journey lead us in the future? Today’s digital champions are already in the starting blocks, because the decision on who will be the winners of tomorrow is being made today! Come with us on a journey to the world of supply chain digitization, with numerous examples from business practice, concrete approaches, leading-edge concepts and an exciting look into the near future.
What lunar landings and missions to Mars
have in common with modern supply chains