End-to-End Commodity Management Platform Latest developments in Risk Management Systems – from CM 1.0 CM 2.0 Next Generation CM - Driven by Analytics James Veale – MD Eka APAC
Volatility Expected to Remain High for 20 Years… Demand for energy, food, metals, and water should rise inexorably: • Three billion new middle-class consumers expected • Global car fleet expected to double by 2030 • India calorie intake to rise 20% by 2030 • China per capita meat consumption will increase 60% a year Supply won’t keep pace: “Our analysis suggests • Long-term marginal rates increasing that commodity prices for many resources as depletion rates accelerate will remain high and • Pressure from climatic impact of volatile for at least the carbon emissions associated with surging resource use next 20 years” • Linkage among resources – e.g. effect of water shortfall; 70% of all water is used by agriculture 2 Source: McKinsey Quarterly
Commodity Management is the Next Big Supply Chain Issue • Historically, with commodity price relatively stable since WWII (1970s oil embargo not systemic), focus on supply chain efficiency and cost reduction: Lean manufacturing – Six Sigma quality programs – Supply chain optimization – Resulting in lower buffer inventory and complex – supply chains • System investment to support above focus through ERP, MRP, Purchasing Systems – • Commodity Management typically handled in multi-tab, error prone spreadsheets With 40-60% of Commodity Systemic high costs in raw Management is commodity materials, the Next Big volatility packaging and Supply Chain energy Issue 3
BUT CM 1.0 Built on Dated Architecture/Code Base – Lacks Analytics Focus on Monitoring and Reporting FACT -BASED DECISION SUPPORT F U N C T I O N F U N C T I O N E E U U L L A A Does a good job integrating the V V END- TO-END CM supply chain Heavy footprint, expensive to deploy & WEB & upgrade, monolithic code base makes COMPONENT quality assurance very lengthy ARCHITECTURE preventing innovation cycles 4
What’s missing? - Some leading research on Analytics Research shows that greater use of analytics is supporting firms as they cope with the inexorable acceleration in the pace of change — Accenture Survey 67% of companies report competitive advantage with use of analytics – MIT Survey If you expect to surpass competitors in the race to keep up with change in the marketplace, you want analytics on your side —Accenture Survey 68% of respondents rate senior management as committed to analytic/ fact-based decision making – Accenture Survey 5
The Answer Eka CM 2.0 Solutions – Driven by Analytics DRIVEN BY ANAL YTICS • T ransform large amounts of data Optimization ● into Visualization FACT -BASED ● fact-based decisions Simulation DECISION Make risk-aware decisions ● Get faster and better answers SUPPORT ● F U N C T I O N F U N C T I O N through data analytics E E U U L L • Eliminate integration Multi-commodity A ● A V Upstream to V points END- TO-END CM ● downstream Eliminate delays and ● Single platform data errors Have one version of the ● truth • Deliver less expensive Cloud deployment ● WEB & Scalable SOA ● COMPONENT Waterfall implementation/upgra ARCHITECTURE development des Provide faster ● innovation cycles EKA COMMODITY MANAGEMENT 2.0 EKA COMMODITY MANAGEMENT 2.0 Have lowest TCO ● 6
T o recap CM 1.0 Focused on Monitoring and Reporting EKA FACT-BASED DECISION EKA FACT-BASED DECISION SUPPORT SUPPORT Risk Management Supply Chain T Procurement / Historical Predictive rading Monitor User Controlled Analysis Production Sort & Filter Dashboards Slice & Dice Optimizatio Reports & Analysis n, Scorecards Visualizatio n, Simulation Decision Support Value Attainment Decision Support Value Attainment CM 1.0 7
CM 2.0 Deploy User Controlled, Predictive Analytics EKA FACT-BASED DECISION EKA FACT-BASED DECISION SUPPORT SUPPORT Risk Management Supply Chain T Procurement / Historical Predictive rading Monitor User Controlled Analysis Production Sort & Filter Dashboards Slice & Dice Optimizatio Reports & Analysis n, Scorecards Visualizatio n, Simulation Decision Support Value Attainment Decision Support Value Attainment EKA ADVANTAGE 8
End-to-End Commodity Management Platform Thank you
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