Supply Chain Control Tower The link for Operations across the Live Enterprise 02 Supply Chain Control Tower | The information link for Operations across the Live Enterprise

The Live Enterprise – A paradigm shift for companies 04 The Supply Chain Control Tower – Our Point of View 05 Deloitte Project Insights from a Premium Automotive OEM 08 Digital Supply Chains – An Outlook 13 Contact 14

03 The Live Enterprise – A paradigm shift for companies

In today’s world, companies have more supply chain data at their fingertips than ever before – vital information that helps to create real-time insights and improve operational performance.

Achieving competitive advantage in their Having access to supply chain data is just actions and execution becomes possible the first step. The second step is to connect when we can link core functions and lever­ and structure the available information age greater volumes of more precise data to provide end-to-end transparency for planning purposes. and real-time visibility. The gateway to transparency is the Supply Chain Control Digitalization is no longer simply a buzz­ Tower, a central information cockpit that word – it has become our shared reality. integrates business processes across the By harnessing a range of (newly) available supply chain and supports rapid exception technologies to foster better, more . By leveraging intelligent data dynamic management of daily business analytics, it is instrumental in creating a operations, companies are gradually responsive supply chain that uses retro­ evolving into Live Enterprises. The uniform spective data insights to create actionable data pools, made possible by the Internet insights in a sustainable way. of Things, promote in-depth analyses and machine learning in almost real-time. The result is a connected and transparent sup­ ply chain with agile decision-making and faster execution – a new form of .

For decades, companies have based their decisions on historical data. Today’s Live Enterprises with integrated real-time data are making a paradigm shift towards a sys­ tem that allows them to “manage the future based on the present”!

04 Supply Chain Control Tower | The information link for Operations across the Live Enterprise

The Supply Chain Control Tower – Our Point of View

The Supply Chain Control Tower (SCCT) Key functionalities include: is the “nerve center” of a Live Enterprise, • Real -time and end-to-end visibility of which orchestrates and integrates supply chains decision-making across a company’s • Insight and root cause identification operational capabilities. Typically, the SCCT • Predictive alerts and recommendations is operated by a small cross-functional • Response agility as well as team, which is empowered to make both • Enhanced tactical and short-term decisions. By applying advanced analytics and feedback loops, it supports continuous improvement of supply chain planning and execution. Overall, the SCCT leverages structured and unstructured data across functions and partners.

Fig. 1 – Supply Chain Control Tower enabling visibility across core operational functions

lannin Sourin anuaturin rer oiti anaeent itriution 05 The SCCT supports holistic decision-mak­ learning. The SCCT increases response data gathering. In the data integration and ing based on end-to-end visibility in all agility to internal or external changes on data storage layer, integrated nodes form a core operational functions such as product both the tactical and the operational level. single point of connectivity to the extended development, planning, sourcing, manu­ Overall, it leads to enhanced performance supply chain network. The fourth layer is facturing, order management as well as management and improved KPIs. for data processing and workflow execu­ and distribution. Enhanced visibil­ tion. All of the required intelligent business ity also promotes efficiency measures and A fundamental prerequisite for every Sup­ logic must be available in this layer. enables effective contract management ply Chain Control Tower is a well-designed with value chain partners. By making infor­ digital core that links several IoT technolo­ On top of the digital core, the Supply Chain mation transparent across all functional gies to power the SCCT with near real-time Control Tower adds another three layers. silos, we can identify root causes, trace data. In general, the digital core comprises The visibility layer aggregates data for end- problems to their origins and ultimately four layers. to-end oversight and enables prioritized enable self-driving supply chains. actions through visualizations. These The lowest level in the digital core includes visualizations foster business process and To create actionable forecasts, the SCCT IT such as cloud platform or enter­ scenario analyses to support decision-mak­ deploys scenario-based modelling and prise resource planning systems, business ing at the operational and the tactical analytics. It also creates predictive alerts to applications and IoT sensors. Network data level. The insights and strategy level relies recommend action for potential events that is synchronized on an ongoing basis, bring­ on and advanced analytics might occur in the near future using histor­ ing together the data of core systems, apps to derive business insights that facilitate ical and real-time data as well as machine and sensors and allowing for synchronized strategic decision-making.

Fig. 2 – Different layers of a Supply Chain Control Tower

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06 Supply Chain Control Tower | The information link for Operations across the Live Enterprise

Fig. 3 – Different layers of a Supply Chain Control Tower

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Capability Connections

But how do you integrate the Supply Chain derive predictions. Where shortages are Control Tower into the typical IT identified for certain production lines, the landscape of an industrial company? The SCCT can generate predictive alerts, e.g. SCCT resides on top of planning and execu­ to reschedule production orders to meet tion systems and adds end-to-end control the overall demand. As the SCCT connects capability as shown in figure 3. Having with other enterprises and external data access to real-time execution data from the sources, response agility within the value core ERP system and other data sources, chain is even higher than in the ecosystem the SCCT creates transparency across all when it comes to reacting to sudden core operational functions within one dash­ changes. We can therefore better and board application. more frequently adapt the value chains to customer demand and service level expec­ Besides providing real-time information, tations, ultimately reducing unit costs and the SCCT can also enrich the actual produc­ increasing profitability. tion output within the planning horizon and

07 Deloitte Project Insights from a Premium Automotive OEM

Our Client For example, there are more than 1,000 erogeneous, with several systems in place A manufacturer of premium passenger suppliers delivering approx. 30 million to support logistics processes from ERP and cars. parts from all over the world to our client’s EDI to yard management systems. In order locations every day. Several vehicle and to get an overview of the status of a single The Challenge CKD1-plants as well as a handful of service material, the user had to log into several IT As production capacities continue to providers assemble thousands of cars, applications, which required a lot of manual expand and the supplier base grows as a adding up to more than two million vehicles effort and led to stock inaccuracies. Even result, our client saw its regional and inter­ per year. The logistics function manages suppliers were forced to use several differ­ continental supply chain network become about 7 billion material movements annu­ ent systems to schedule their deliveries. more complex and its management activi­ ally. In this complex environment, our client ties more intense. This led to major chal­ needs innovative IT solutions to ensure effi­ The client was keen to solve those issues lenges in terms of material supply and cient supply of all its production facilities. and announced that the key of their logistics efficiency within the overall net­ 2020 logistics strategy would be supply work of vehicle plants. The client’s existing IT system landscape chain transparency, real-time visibility and could be characterized as complex and het­ connectivity.

Fig. 4 – Global Supply Chain Network of the OEM – Illustrative

08 1 Completely knocked-down vehicles Supply Chain Control Tower | The information link for Operations across the Live Enterprise

Fig. 5 – The Inbound Dashboard of the Supply Chain Control Tower – Illustrative

The Vision of the Project For example, if a delivery were significantly The overall objective was to implement an delayed due to traffic, it would be detected interactive dashboard that provides com­ and localized via GPS data in real-time. The plete material and process transparency newly built IT application calculates the for inbound deliveries and the status of revised time of arrival and analyzes current warehouse parts, JIT / JIS materials and inventories, stock ranges and production plant-to-plant transfers. demand. In the event of a supply-critical deviation, an alert would be sent to the It would then be possible to monitor deliv­ material planner to take measures to ery call-offs, advanced shipment notifica­ secure supply, for example a detour. tions as well as goods receipt and deliveries in real-time. Any deviation in delivery quan­ Gaining real-time visibility of the location tities and delivery times could be identified and condition of goods in transit as well as and flagged at a very early stage. Using vis­ assets along the entire supply chain was ualizations and algorithms, logisticians are one of the biggest achievements of the now able to analyze these deviations and project. make further predictions, giving them the power to act instead of react and work to improve the process.

09 The Technical Solution in Detail Fig. 6 – Display of the trucks’ estimated time of arrival (ETA), Together with the client, Deloitte developed route, traffic and weather conditions an interactive dashboard / control tower with 19 applications for different business units and use cases. In particular, we designed and implemented several apps to track and trace materials through the inbound supply chain and to calculate the online stock range for the assembly line as well as apps for measuring data received from suppliers.

All systems used by the suppliers and carri­ ers as well as the client’s own IT systems converged on a single private cloud plat­ form based on Red Hat OpenShift. Although it sounds simple, this platform is the key to integrating every supply chain partner and achieving transparency. More than 1,000 suppliers and business partners were integrated step-by-step. The informa­ tion shared by suppliers and carriers, that is used for the track-and-trace capability, is routed using interoperating microservices hosted either on Microsoft Azure or on the OpenShift Platform. The Microsoft Azure cloud is a typical “Platform as a Service” (PaaS) solution and accessible via a web browser. There is no need to pay for addi­ tional hardware, software or maintenance. ment-oriented database (NoSQL). In the The toolchain already exists, which saves future, both the relational business-appli­ development time and ensures the data is cation data, as well as the non-relational secure. mobile-app or IoT device data, can be addi­ tionally stored in a data lake, with the scope OpenShift only works with private cloud of enabling large-scale, machine-learning- hosting, which requires up-front invest­ based data analysis solutions. ments in hardware and software. It is basi­ cally a container management platform for To connect the SAP system, we set up a virtual machines that deploy the different Remote Function Call connection (RFC), as applications. not all clients’ SAP systems support OData (which is more the way of the future). In In addition to linking all of the partners, this general, RFC interfaces enable communica­ single cloud platform must also integrate tion both within SAP systems and between the clients’ own heterogeneous software SAP and non-SAP systems. All information solutions, from the EDI system and yard required from the SAP database is trans­ to the SAP ERP sys­ ferred into the cloud system. Since the tem. All information coming from the SAP gateway machine (Application Server) with and the Yard Management systems is all the authorization, routing and load bal­ stored in a relational database named ancing operations is on OpenShift, we PostgreSQL, which is available under an made the connection through a Java Con­ open-source license. This database is nector (JCO) middleware component for hosted on the private infrastructure of the JAVA. An essential element of the system is client. The track-and-trace data originating the ability to call or communicate in a bidi­ from the suppliers and carriers are stored rectional flow – from SAP ABAP to JAVA and in Azure CosmosDB, which is a docu­ vice versa.

10 Supply Chain Control Tower | The information link for Operations across the Live Enterprise

Fig. 7 – Simplified illustration of the OEM’s digital core with cloud and on-premise applications

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Other backend systems were connected To display the data, we deployed frontend The technical foundation shown above via the REST API (Representational State applications on the OpenShift platform and builds the digital core, which enables many Transfer, Application-Programming-Inter­ used OpenUI5 as a framework. This is the capabilities in different applications. For face). An API is a predefined interface used open source version of SAPUI5, which con­ example, one carrier sends messages with to exchange data and content between dif­ tains most of the standard components estimated times of arrival (ETA) and GPS ferent websites, programs and content pro­ that the licensed version does (except for coordinates on an ongoing basis. As soon viders. APIs also enable third parties to more “exotic” components). By limiting our­ as the system detects an ETA delay that access previously closed data pools and selves to the standard components, it is exceeds the tolerance required to keep the user groups. This allows users to easily much easier and faster to develop applica­ time slot booked in the yard management access data from network suppliers, for tions. They are not, however, designed for system, it flags that truck as too late. example, via a HTTP/HTTPS based web ser­ customized adjustments. The amount of vice. Security is handled via a mix of required customized components was authentication methods raging from basic rather high in our project, and in hindsight authorization and API Keys to proprietary it might have made the developers’ lives a client technology. bit easier if we had used other frameworks such as Angular JS or React.

11 Another application determines the online Fig. 8 – Overview of all incoming shipments of the current day days of material supply and can even calcu­ including push notifications late the last production order in the assem­ bly line that can be covered. The system can now simulate any delivery delays or potential stock shortages, along with an evaluation of what effect that has on pro­ duction. Where supply is at risk, the mate­ rial planner can flag a specific material in a particular truck as urgent. Push-notifica­ tions go out immediately via e-mail or text message to inform all relevant stakehold­ ers. They can analyze the reason for the alert on their own and determine whether or not they need to respond. Various coun­ termeasures can be taken to mitigate the risk of a production downtime, for example they may reprioritize the booked time slots in the yard management system, re-route certain trucks or transfer material stock from other plants.

Fig. 9 – Setting notification alerts to all relevant stakeholders in case of emergency

12 Supply Chain Control Tower | The information link for Operations across the Live Enterprise

Digital Supply Chains – An Outlook

Compared with the retrospective insights of the past, the dashboard in our project represents a major step forward towards right-time end-to-end visibility. At the moment, the dashboard only covers inbound supply chain pro­ cesses, a key component of the supply chain but not the complete picture.

We plan to extend the scope towards pro­ For example, we can track goods move­ duction and outbound processes to gain ments via GPS sensors in trucks or smart full visibility over the supply chain and to containers and, if necessary, monitor the integrate multiple operational functions ambient and container temperature as well into the Supply Chain Control Tower design. as the number and intensity of shocks dur­ ing transit. With real-time data and We also need to enhance the capabilities machine learning / artificial intelligence with machine learning and artificial intelli­ algorithms in place, it is possible to identify gence to reach the next maturity level of supply shortages or damage to parts even the Supply Chain Control Tower. Predictive before the truck with the shipment arrives. and cognitive techniques will ultimately Enterprises will also monitor external infor­ lead to autonomous decisions without any mation more closely, such as electronically human intervention, the so-called self-driv­ published news on supply chain risks, e.g. ing supply chain. In the project presented traffic jams, delays in transportation, here, the implemented applications in the weather conditions or natural disasters. We backend are already intelligent, although can link all relevant supply chain data to we have yet not put machine learning or operate better, faster and more flexibly artificial intelligence algorithms in place. than in the past.

As to the future – what will supply chains In summary, it remains exciting to see how look like in 2025? In our vision, the supply technical progress will shape the future of chain will be fully digital with four key fea­ the supply chain. Predictive and cognitive tures: (1) always on and connected, (2) elements are sure to be key pillars for the sensing and transmitting, (3) nimble, agile highly digitalized world of tomorrow. and adaptive as well as (4) collaborative, Deloitte is well-positioned to help you iden­ safe and efficient. tify the right levers and actions for your business. Together, we can create a digital supply chain that fits the needs of your industry and your business. Today, but also in the future.

13 Contact

Britta Mittlefehldt Carsten Wutzler Senior Manager | Strategy & Operations Senior Manager | Strategy & Operations Tel: +49 (0)151 5800 4065 Tel: +49 (0)151 5800 4269 [email protected] [email protected]

Clemens Jostarndt Philipp Döhle Senior Consultant | Technology Senior Consultant | Strategy & Operations Tel: +49 (0)151 5800 3554 Tel: +49 (0)151 5800 2611 [email protected] [email protected]

Subject Matter Experts

Roland Fierle Philipp Floren Senior Manager | Technology Senior Manager | Technology Tel: +49 (0)171 1488021 Tel: +49 (0)152 09311548 [email protected] [email protected]

14 Supply Chain Control Tower | The information link for Operations across the Live Enterprise

Live Enterprise – A paradigm change for companies

Dynamic based on real-time continuous evaluations in near real-time data: this approach realizes the potential with innovative analytical methods and of new digital technologies. Welcome in Machine Learning. The time lag between the Here and Now! Digitalization makes analyzing the current state and imple- this possible. Today more and especially menting it into concrete action shrinks more actual data are available than ever potentially towards zero. The result: before. Thus, companies are gaining Relevant data, adaptive processes, agile more precise fundamentals for their decision making – a new form of leader- actions. ship. Live Enterprise is more than just an IT project. They become a Live Enterprise: The Internet of Things is the new data This publication is one of our building supplier and allows the generation of blocks how to structure and connect consistent data pools, which enable data on the journey to a live enterprise.

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