How Industry 4.0 is driving change in SCM/ Logistics LOGISTICS - PowerPoint PPT Presentation

Why hy will wi ll dri drive ve How Industry 4.0 is driving change in SCM/ Logistics LOGISTICS AUTUMN CONFERENCE ON DIGITAL TRANSFORMATION Cluster for Logistics – Luxembourg, Dec 2nd 2016 Dr.-Ing. Torsten Mallée, AEB

Industry 4.0 in SCM & Logistics Why Industry 4.0 will drive change in SCM/ Logistics 1 Drivers for SCM/ Logistics 2 Industry 4.0 - processes and business models 3 Corporate organization and mindset

Industry 4.0 in SCM & Logistics About AEB Global Value trade chain Global supply chain management optimization management One integrated solution From a single source IT solutions: Supply software chain and services execution

Industry 4.0 in SCM & Logistics Why Industry 4.0 will drive change in SCM/ Logistics 1 Drivers for SCM/ Logistics 2 Industry 4.0 - processes and business models 3 Corporate organization and mindset

Industry 4.0 in SCM & Logistics The evolution of logistics 1970s Sales Procurement Transport Production Transport Handling Handling Storage Storage 1980s Sales Procurement Logistics Production Logistics Customer Supply Chain Management as cross-functional discipline 1990s Order Management Customer Customer Develop- Supply Production Distribution Recycling ment Logistics Service Logistics Service Logistics Service Provider Provider Provider Customer Manu- Customer Supplier Retail facturer 2000s Supply Chain Management integrates Value Chains into 2010s Global Networks Helmut Baumgarten, 2008

Industry 4.0 in SCM & Logistics My simple view of what happens/ happened Complexity and vulnerability of supply chains Price sensitivity Ambition about delivery Customization&Involvement Always online Loyalty Digitized Technology Web 1.0 Web 2.0 programs Web 3.0 Products Wearables Digital activity level of customers Single Channel Multi Channel Cross Channel Omni Channel Analysis of customers Global logisitcs Portals E-Commerce Traditional Smartphones XaaS Autonomy AR New products and business models e.g. 10yrs Premium car Nightly update by Tesla Product life cycle decrease/ Product diversity increase 1995 2000 2005 2010 2015

Industry 4.0 in SCM & Logistics Logistics – the challenges Cost pressure Omni-Channel Increasing Master data Volatility and complexity are the enemies sales customer management of a deterministic and central planning expectations Growing amount Shorter product Offshoring Risk of parts and lifecycles Management variants High and low Customized Time-to-market Volatility and volume mix deliveries pressure complexity become a norm

Industry 4.0 in SCM & Logistics Decentralization is a key Volatility and complexity are the enemies of a deterministic and central planning Complexity Volatility Decentralization Industry 4.0/ IoT

Industry 4.0 in SCM & Logistics What is the „Internet of Things“? “Internet of Things“ Kevin Ashton, Auto-ID Center “Internet of Everything” Cisco “Industrial Internet” GE Software “ Industrie 4.0” Bosch https://www.linkedin.com/pulse/internet-things-iot-dummies-rajat-kochhar „Things that are embedded with sensors, connected to the internet and communicating with each other and us “

Industry 4.0 in SCM & Logistics Why Industry 4.0 will drive change in SCM/ Logistics 1 Drivers for SCM/ Logistics 2 Industry 4.0 - processes and business models 3 Corporate organization and mindset

Industry 4.0 in SCM & Logistics IoT/ Industry 4.0 – basic process Local + IoT (IoT smart, autonomous mechanism) Central + IoT (IoT only sensing) Central without IoT Central assumed Central sensed Rules and Central view of Central view of Central Sensed state Central decision Central action view of reality view of reality Guidelines future future monitoring Source: Stefan Harrstedt, Alfa Laval Current local Local view of Local decision Local action reality future

Industry 4.0 in SCM & Logistics Industry 4.0 – the basic principle New business models Develop products/ services, in- crease turnover, gain market share Better business processes Reduce costs, increase efficiency, raise productivity Source: Crisp Research 2015

Industry 4.0 in SCM & Logistics Growth predictions for the IoT (as of 2015) Amount of Connected Devices by 2020 (Billions) Global Economic Value Added by 2020 ($Trillions) 14.4 7.1 Cisco IDC 4.5 1.9 Machina Gartner

Industry 4.0 in SCM & Logistics Data Storage Costs Why IoT now? $11.00 IPv4  IPv6 Computing Speed $0.03 2 32  2 128 “Things“ 28751 Cloud Computing 29 Data rates Price of Sensors $22.00 Internet Transit Price $120 $1.40 $0,63 Source of all diagrams: 2015 Deloitte Development LLC

Industry 4.0 in SCM & Logistics Will IoT take off quickly? A view from a sales perspective Low(er) „Coolness - Real Performance Price for Factor “ Benefits components plus The need to invest (the „ pain “) Laggard? Leader?

Industry 4.0 in SCM & Logistics Why Industry 4.0 will drive change in SCM/ Logistics 1 Drivers for SCM/ Logistics 2 Industry 4.0 - processes and business models 3 Corporate organization and mindset

Industry 4.0 in SCM & Logistics Getting more digital means changing Obvious: using digital technology But it is more than buying new technology and hiring some geeks and nerds! A transformation of the entire company and its culture is required The user/ customer comes first. If it doesn‘t work for him, it simply doesn‘t work Decentralization and empowerment of staff to make more own decisions – less hierarchy IT must become a core competence of every organizational unit Data (scientists) will become an important source for decision making True digital companies were mostly „ born like that “ - these are the challengers!

Industry 4.0 in SCM & Logistics Thank you!