Running Supply Chains is like a Massively Multiplayer Online Game Michael Hugos CIO at Large, SCM Globe http: / / scmglobe.com/
Supply Chain Challenges • Best laid plans quickly out of date Steady Volatile (planning cycles take too long) & & • Responsiveness as important as Predictable Risky efficiency (sometimes more) (1980 - 2000) (2001 - ????) • Observe events, explore options, take action Real-Time Business • Need constant adjustments to Collaboration Intelligence respond to constant changes 2
Collaborative Response to Continuous Fluctuations “Bullwhip Effect” PERCEIVED DEMAND Customer STORE Demand DC STORE DC Customer Demand STORE DC STORE Customer Demand Human street smarts combined with real-time computing power! 3
First Gen Collaborative Supply Chain CHALLENGE: Increase service levels and reduce conflict and excess inventory in national retail supply chain (in 90 days without spending a lot of $$) SOLUTION: “Red Cup System” Introduce game dynamic via feedback loop generated by real-time supply chain visibility and daily/weekly conference calls for review and decision making. 4
Daily Updated Information Seen by All • In operation four years • 5,000 stores, 26 distributors, 30+ manufacturers • Parties connected via simple API to transmit daily data • Supply chain information portal for operating status and conference calls for decision making • Group behavior turned from defensive to collaborative! 5
Real Time Performance Score Cards Manufacturer Compare Distributor Electronic these three Retailer Invoice Electronic documents for each Electronic ASN order PO Display KPI score cards KPI Scorecard through dashboards % Plan vs Actual visible to all parties. (Build Reputations) Wk 1 Wk 2 Wk 3 Wk 4 A B C D E Order Fill Rate Supplier On Time Delivery Rate 80% Plan vs Set customer service Actual 90% 70% alerts for quick response. Wk 1 Wk 2 Wk 3 Wk 4 (Business Agility) Inventory Turns 60% 100% Perfect Order Rate 6
Gotta Have Points and Badges… Real time visibility created feedback loop and group dynamic that generated interest and desire to perform! People got better fast – nobody wanted to be seen as dragging down the rest of us Transparency is hard - but fun as you get good at it 7
Simple Data Connections (APIs) File transfer Data converted to common file formats and sent over Internet (easy file conversion to and from Distributor EDI, XML, JSON) System API 1 Simple systems using good data File Import/Export outperform complex systems using bad data!!! Manufactr System API 2 POs, Invoices, Price Books Supply Chain Collaboration Cycle almost Real-Time Data Portal API Warehouse (SCM Globe) Retailer System ASNs, API 3 Inventory Status, 8 Product Masters
Second Gen Collaborative Supply Chain Supply chains are combinations of: • Facilities • Routes • Vehicles • Inventory 9
Define Facilities and Routes Use map view or satellite view or hybrid or terrain view Zoom in or out in different views to 10 find best location for facility
Simulate Supply Chain Performance Based on simulations, modify supply chain designs to achieve cost and performance objectives “Crowd sourcing” supply chain solutions 11
System Displays Real Time Operating Status Simple connections collect continuous data from facilities and vehicles Send alerts when data moves outside predefined ranges Collaborate online to bring operations back in line 12
13 Entertainment) StarCraft (Blizzard Next Gen Collaborative Supply Chain… ☺ theme
Newest SCM Globe User Interface Let the game continue… (Influenced by popular MMO and RTS games) 14
Presentation Based on Two of My Books Try SCM Globe – free days at: http://scmglobe.com/ Serious Games Join the conversation on my CIO magazine blog: The Future of “Doing Business in Real Time” http://blogs.cio.com/blog/doing- Work business-in-real-time Email: mhugos@yahoo.com Twitter: @MichaelHugos Essentials of Supply Chain Management, 3 rd Edition , John Wiley & Sons, 2011 • • Serious Games: The Future of Work, O’Reilly Media, 2012 (available summer 2012) 15
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