I gave this presentation in September 2013 in front of a Supply Chain Operations team at a Electronics manufacturer.

1. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 1
September 2013
The Status Quo & Future of Supply Chain Management
A strategic “Point of View”

2. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 2
What is the carbon footprint of an iPhone?
iPhone 4: 53kg CO2
iPhone 5: 75kg CO2
http://www.carbonfootprint.com/energyconsumption.html

3. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 3
Thank You For The Invitation
• Thorsten Schroeer
• Member of IBM Global Electronics Industry Center
of Competency
• IBM consulting practice „Global Business Service“
• Work Experience
• 8 years IBM’s Electronics Industry
• 5 years IBM Supply Chain Consulting Practice
• 5 years Ryder Supply Chain Solutions
• 1 year Fraunhofer Institute Material Flow & Logistics
• 15 years member www.CSCMP.org
• Education:
• Masters Mechanical Engineering, Dortmund
• Masters Industrial Engineering, Atanta

4. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 4
This presentation will cover four key areas
2What SCM Leaders
do?
3What is the software
defined Supply
Chain?
4How to get to the
next level?
1What is the starting
point?

5. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 5
Our modern notion of the supply chain
began with Henry Ford.

6. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 6
Complex supply chains evolved with multi-tier supplier networks with
largest carbon footprint ever.

7. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 7
It’s been a function of our global supply chain that we leverage these three rules of
product design
Parts
Assembly
Controls
Custom
Components
Mechanical
Standard
Modules
Digital

8. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 8
And this approach led us to three characteristics of industry structure and trade that go
well beyond electronics
Economies of Scale
Multi-tiered Supply Chains
Low cost suppliers
BIG
COMPLEX
GLOBAL

9. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 9
This presentation will cover four key areas
1What is the starting
point?
2What SCM Leaders
do?
3What is the software
defined Supply
Chain?
4How to get to the
next level?

10. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 10
Globally recognized Leaders in Industrial
Supply Chain Management *
* Source: Gartner 2013 Supply Chain Top 25,, IBM Point of view

11. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 11
SIMPLIFICATION: Apple has implemented one of the most rigorous and
disciplined simplification models worldwide.
The Apple way - Almost no promotions, No B2B products, B2B channels, simplified
order handling rules, one single, integrated back end, no real “configuration”.
Under Tim Cook we have seen most successful SCM
war won ever on complexity and order management
via simplification.

12. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 12
Standardization – Electronics company developed a cross business
unit aligned process framework to support standardization and
measurable business outcome via APQC reference process
framework.
APQC Industry Process Framework
– Open Standard, Industry Specific
– 20 years of Industry Peer review,
widely adopted in the industry
– Strong references towards SCM
– Key focus on benchmarking

13. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 13
Visibility: Electronics company deployed control tower concept to monitors KPIs
and production status with global alerts, timely problem identification and
decision resolution.
VP Manufacturing
View
Management COO
View
CSCO View
Profit Navigation Manufacturing Cockpit Supply Chain Network

14. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 14
3rd party Transformation: IBM‘s Supply Chain Logistics
Transformation journey serves as role model for 4PL logistics
partnerships.
IBM and 3PL sign a five-year
contract for the distribution of all
finished goods, customs
formalities and reverse logistics,
throughout Europe, Middle East
and Africa
IBM extends the
agreement to include
Spain and Portugal
1999
2002
IBM and 3PL sign a five-
year contract for the pre
and post production
logistics of IBM eServers
made in Dublin
2008
2004
3PL signs a contract with
IBM covering all end of
lease returns from clients
across Europe
3PL signs multi year
outsourcing contract with
IBM and acquires its
global logistics
operations
1998
IBM outsources logistics to 3PL in
a five-year contract for France,
Germany and Italy. 3PL acquires
IBM assets, including warehouses
across Europe – 750 IBM
employees join 3PL
2009
2012
Project moves resources with
IBM expertise to 3PL for the
beginning of a long-term
logistics partnership
Logistics steady state
attained with ongoing
global
standardization and
enhancements

15. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 15
Collaboration - A typical collaboration platform for the supply collaboration
and replenishment process, example packages are E2Open or Sterling.

16. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 16
Self Service – Electronics company developed Online Order Process
to manage lead times in a pure build to order process.
Production

17. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 17
Big Data & Analytics: IBM’s supply chain drives towards smarter
supply chain analytics. IBM employs analytics on an evolving
platform of Big Data and multi-enterprise supply chain visibility.
Volume
Velocity
Variety
Descriptive
Predictive
Prescriptive
Business Analytics
Big Data Platform
IBM Buy Analysis Tool
Critical Parts Management Tool
Quality Early Warning System
IBM Supply Chain Examples
Supplier Risk Management
Other…
IBM recognized as a leading innovator for 2012 in the
Electronics Industry on the basis of the QEWS solution
September 17, 2012 Issue

18. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 18
At XX, the biggest part of our
company is our installed base – the
machines. Embedding them with
more sensors and having the ability
to do analytics allows us to get more
out of the products. We can offer --
as a service -- not just real time data
but real time knowledge. We can
drive efficiency.
For a long time our service approach was
“break-fix.” It was successful model, but
not sustainable. Today customers don’t
want their products to break; they can’t
wait for the fix, nor can they afford to. They
don’t want any unplanned downtime or
outages.
They want guaranteed outcomes.
18
Analytics in Service Supply Chain: Electronics company takes holistic view
towards its install base and the role of predictive analytics towards buttom
line.
CEO Compnay, June 19, 2013

19. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 19
This presentation will cover four key areas
1What is the starting
point?
2What SCM Leaders
do?
3What is the software
defined Supply
Chain?
4How to get to the
next level?

20. The Software Defined
Supply Chain?
A Study Overview
20

21. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 21
3 key software enabled trends will drive towards a software defined supply chain in the
future.

22. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 22
Our old hardware constrained universe is now a choice, not a requirement. We can
not simply share apps, we can share things in a digital space – and be rewarded for it

23. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 23
3D Printing in Industrial Context – Case Studies Siemens AG
http://www.youtube.com/watch?v=VyEgbyNg0Q8

24. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 24
3D Manufacture
Standardization

25. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 25
Robotics
Modularization

26. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 26
Intelligence
Digitization
Moore’s Law
Open Source

27. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 27
Using one example from our study –we find dramatic changes in a supply chain that is
small, simple and local
Cost
Carbon
Footprint

28. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 28
How 3D printing could
revolutionize
your industry?

29. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 29
The market is already expressing itself, albeit with a “toes in the water” approach –
which we think is smart.
In May 2013, Staples started carrying
3D printers
http://www.gizmag.com/staples-selling-3d-printers/27399/ http://www.technology-digital.com/web20/ups-to-offer-3d-printing-service-in-retail-stores
In August 2013, UPS announced in-
store 3D print services
3D printed Solar Cell
MIT's Department of Materials Science
and Engineering

30. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 30
Centralized Manufacturing
In summary the software defined supply chain will radically change the
way we will design supply chains.
Complex Inbound Logistics
Complex Outbound Logistics
Significant Logistical Lead Times
Significant Transportation Costs
Complex Tax & Transfer Pricing
Local/Distributed Manufacturing
“Last Mile” Inbound Logistics
“Last Mile” Outbound Logistics
Near Zero Logistical Lead Times
Minimal Transportation Costs
Local Tax & No Transfer Pricing
Traditional Manufacturing 3D Manufacturing

31. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 31
70% of Supply Chain Executives are unpreparred for this transformation*.

32. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 32
Implications and Recommendation are BOLD.

33. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 33
Five questions you might want to ask yourself, as you journey into these waters

34. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 34

35. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 35
This presentation will cover four key areas
1What is the starting
point?
2What SCM Leaders
do?
3What is the software
defined Supply
Chain?
4How to get to the
next level?

36. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 36
3
6
Synchronize supply & manage demand
(S&OP, IBP, CPFR, Demand Sensing, Collaboration, Social Supply Chain)
Apply customer & supply chain segmentation.
Operate demand driven push-pull supply chain.
Enable postponement/late customization.
Integrate manufacturing execution and planning elements
Plan for the manufacturing revolution
„The Software Defined Supply Chain“
Apply Smarter Supply Chain Analytics & Big Data,
Enable fact-based decision-making -> Advanced Risk Management Analytics
Provide superior customer fulfillment through
logistics excellence
6 Key Supply Chain Design Guidelines

37. 37 37
InnovationInnovation
GlocalGlocal
VisibilityVisibility
Self-HealingSelf-Healing
Plug & PlayPlug & Play
SustainabilitySustainability
Big DataBig Data
Gen NowGen Now
Hyper connectedHyper connected
Social BusinessSocial Business
Client-centricClient-centric
Digital/Social ageDigital/Social age
Analytics &
Automation
Analytics &
Automation
FlexibilityFlexibility
Control
Tower
Control
TowerCash
conversion
Cash
conversion
“On Demand” has
become “Before I even
ask”
“On Demand” has
become “Before I even
ask”
WatsonWatson
The IBM ISC has become a collaborative, end to end, intelligent network focused on client
value and cash conversion
Build your Vision of the Future Supply Chain…

38. What is the carbon footprint of an iPhone?
iPhone 4: 53kg CO2
iPhone 5: 75kg CO2
http://www.carbonfootprint.com/energyconsumption.html
38
iPhone 8: ?? CO2

39. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 39
This presentation covered four key areas
1What is the starting
point?
2What SCM Leaders
do?
3What is the software
defined Supply
Chain?
4How to get to the
next level?

40. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 40
Let’s Stay In Touch
thorsten.schroeer@de.ibm.com
www.linkedin.com/pub/thorsten-schroeer/2/b40/a77
www.xing.com/profile/Thorsten_Schroeer
IBM Electronics www-935.ibm.com/services/us/gbs/industries/electronics/