Supply Chain Visualization 2o2s73

Northeastern University D’Amore-McKim School of Business Supply Chain Data Visualization by Mapping and Geographic Analytics (GA) Sandeep Kumar Karumuru

04/19/2016

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Research Paper submission for Supply chain management (Spring 2016) To Distinguished Professor of Supply Chain Management 1

Dr. Nada R. Sanders

Table of Contents Abstract

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Overview

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Background

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Supply Chain Visualization

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Supply Chain Mapping

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Geographic Analytics

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Business Example

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Future Trends

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Benefits and Challenges

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Conclusion

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Bibliography

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Abstract The focus of this research paper in on the process of how workflow is handled in a typical supply chain environment. There are numerous areas of focus that come to mind when we talk about improvements for a supply chain but the process itself is not given enough significance. The research paper covers the most popular process in use, from spreadsheets to its immediate future evolution i.e. visualization tools for supply chain data. There are several tools that exist in the market, each of them have their advantages and disadvantages when used in a certain environment. Supply chain mapping is one such tool that many companies are already utilizing but the mapping tool which gives a visual representation of the entire supply chain network is only an abstract network map and so it has its shortcomings. In contrast, supply chain mapping can be utilized alongside geographic analytics giving us the geographic context of a region allowing us to take other intangible factors into consideration, factors that cannot be quantified can be incorporated into our decision making process allowing faster and well informed decisions. Supply chain visualization tools are a dream come true for a supply chain manager. The way data is perceived and information is extracted from multiple datasets changes drastically. The capacity to include many factors into their cognition grows by many folds compared to working on spreadsheets. Actionable reporting can greatly

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improve a supply chain’s overall performance. Visualization tools are a dire need in supply chain analytics and it holds the power to leaner, agile and resilient supply chains.

Overview Vast advances have been made in business analytics through computational analysis, visual analysis and information visualization but these advancements did not yet have a significant effect on the supply chain industry. Today several thousand supply chains and logistics companies mainly use spreadsheets to keep track of their operations which is seen as the best way to analyze operational data. Most small and medium size enterprises (SME) do not upgrade their operating platform from spreadsheets to a sophisticated software designed for SCM due to lack of resources, capital and awareness. However, circumstances are changing quickly and managers are finding it difficult to deal with the immense amount of business data on a spreadsheet as it takes a lot of time and effort even for their trained eyes to find the hidden insight amidst the raw data. Spreadsheets are difficult to maintain, prone to errors, vulnerable to failure and an archaic methodology that often leads to ‘analysis paralysis' and consequently ‘decision paralysis'. Spreadsheets with large sets of data (more than 150 rows) are often found to contains numerous errors due to multiple reasons2. Spreadsheets can use ‘who', ‘how' and ‘when' aspects of operations but it immensely underutilizes the ‘where' part of it. This is where supply chain visualization can make the difference by extracting insight from visual representation of supply chain data in a dynamic way. Supply chain data is laid out for a person focused in a format the person can better 4

comprehend, transforming data into insight. The focus of this paper is on visualizing supply chains through supply chain mapping and geographic analytics.

Background In an analogy, Human minds experiencing new information in their daily lives was compared to firehose cracking of a porcelain saucer. It is said that our eyes come across thousands of words each day through multiple mediums such as TV, Radio, Newspaper, the Internet etc. An equivalent of 174 newspapers each day per person 3. If you think you are under information overload, that is exactly where the rest of mankind is right now. We create about 5 Exabytes of data every two days (1 Exabyte is a billion Gigabytes) that is equal to the amount of data humans have generated since the advent of civilization. Analyzing data in this scenario has been nerve-racking. Fields such as data visualization and visual analytics have become critical to our understanding of the information contained within that large amount of data produced from fields such as physics, biology, and business. Physicists and biologists are collaborating with data scientists to extract this hidden information by scientific visualization, businesses have also begun focusing on the data produced by customers from their online activities and buying habits etc. Supply chains of today's businesses worldwide, however, are yet to fully reap the benefits of our advances in these fields. Few top-tier companies that understand the importance of running an efficient supply chain have made progress using technologies such as geospatial technology, geographic information systems and geographic analytics. Supply chain 5

visualization has been emerging since the past few years and is considered to be the future for handling complex supply chains.

Supply Chain Visualization Supply chain data visualization means visualizing supply chain data either graphically (abstract network design) or geographically, plotting a focal company’s network including its suppliers, sub-suppliers, manufacturing facilities, distribution centers and its retail outlets on a map. Researchers say that a graphical or a geographical representation of supply chain data is a better way to understand the complex interrelationships of the focal company and its supply chain network. Today’s complex supply chains require a single sophisticated platform that can deliver tailored information from multiple sources such as information on inventory, supplier inventory, finance, transportation modes/rates and weather forecast. This can dramatically enhance employee performance by providing in depth relevant information on every aspect that they examine for decision making thereby improving overall supply chain performance. Visualization of a supply chain can quickly identify how much transparency a company has in its supply chain data. Building a proactively risk managed, resilient supply chain can be very difficult especially when working to achieve it without visualization tools. Supply chain risk events are growing in number and also becoming increasingly expensive mistakes for companies that do not act pre-emptively.

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Visualization enhances visibility, flexibility, collaboration and control of a supply chain externally and internally as well4.

Supply Chain Mapping A picture can say a thousand words but a map is a thousand pictures. Supply chain mapping is the process by which companies visualize their supply chain network in order to analyze and improve their options from every node in the network. Supply chain map is a living system of a network whose data is constantly changing. It is a continuous process as new data is continually added. In order to handle this living system, a database needs to be maintained in the backend to it. Once the complete data is plotted on an abstract map then information on the existing interrelationships also can be added. Adding additional attributes can quickly increase the complexity of the supply chain maps such as financial relationships, transportation aspects, product information, and partnerships5. It also allows for sharing of the same supply chain data by all departments within an organization and work in unison. By adding a dynamic time component to this visualization the product flows can be tracked, inventory levels at every node can be closely examined and tier 1, tier 2 supplier levels can also be kept in check. This is how multi-tier supply chain visibility is achieved. It can be a crucial competitive advantage in the market while handling disruptions. Supply chain mapping facilitates

faster

and

better

communication,

effective

inventory

management, 7

procurement, distribution management, routing analysis, lead time calculations and returns. . Calculated stock redundancies can strategically be located to optimize the supply chain and reduce inventory costs. Managing supply chain risks and handling disruptions effectively thereby avoiding losses due to calamities and having an end to end supply chain visibility.

Geographic Analytics (GA) Humans beings are visual thinkers. We are very good at reading patterns in a visual representation. We tend to get better results when we analyze graphical representations rather than large sets of data points on a spreadsheet. Geographic analytics allows us to visualize (supply chain) data with a geographic context that helps to identify problems and mitigate risks. Adding other layers to a map for analysis is possible. Studying the aftermath of an event such as a calamity can also be performed. Government agencies and other non-profit agencies use GA to forecast epidemics, tracking global forestry and deforestation. It can also calculate damages by plotting a region’s financial data, population density and adding an overlay of a storm’s path over the region. This dynamic visual can give insight into the financial damage caused by a natural calamity. Businesses can use this to determine their technique to provide for customer requirements or market trends during these phases. Geographic analytics can also help with the rerouting of inventory pre-emptively to an unaffected region for product safety and avoid losses due to damages. In contrast, spreadsheets have no provision for the 8

to predict or react to disruptions. Today’s complex supply chains requires us to anticipate events before it is too late. The process of identifying a point of concern for correctional measures itself is simplified with geographic analytics. The meaningful actionable information from the supply chain data is extracted very efficiently as the data is presented in a way humans can intuitively understand at an intricate level6. Tools such as Flex Plus, Tableau, LLamasoft’s Sherpa, Deloitte HIVE and Sourcemap are all renowned tools. Companies have seen significant results from utilizing these platforms.

Deloitte Consulting LLP employee using Deloitte HIVE4.

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Flextronics International Ltd employees working on Flex Pulse, supply chain visualization tool 1.

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Starbucks’ global supply chain mapped on Sourcemap5

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Tableau’s platform showcasing overlays of routing and weather11.

Business Example 12

Hewlett-Packard used geographic analytics to deal with the disruptions that occur twice or thrice each year in their global supply chain 7. The software, ‘Lagos' was developed in-house by the company, plots the locations of HP's manufacturing, distribution centers, service and retails outlets on google earth and uses symbols such as traffic lights to describe inventory levels etc. Timely inputs from all departments are required therefore involving all of the necessary people into the loop from the initiation of the project. For instance, Brazil has different tax policies for different states and in most cases taxes are negotiable. These non-quantifiable parameters are also required to be taken into consideration while planning or decision making. HP’s tax consultant from that region inputs the data and the planning is done perfectly taking this information into consideration. Geographic analytics was the key to HP's success in optimizing their supply chain through visualization. Their traditional analysis was time consuming where employees had to wait overnight in some cases to get the output the next morning. The result was not always the best answer to the problem since many intangible parameters are not considered in the traditional analysis methods. Numbers, for their obvious absolute values do not always tell us the true story hence the solution implementation is time-consuming and often capital intensive. Geographic analytics allowed HP to shutdown 200 physical locations which turned out to be redundant and ineffective and also allowed for saving 4500 man hours per year in handling disruptions and thereby saving a total of $1 billion. 13

Future Trends Numerous organizations are gearing up towards supply chain visualization to keep up with the complexities of global supply chains. Increasing number of professionals are using visualization for strategic and tactical decision making processes. Researchers say the future of supply chain analytics is visualization of supply chain data. There are also many companies that are struggling to improve the performance of their supply chains. Today, only a mere 11% of companies have the capability of evaluating a “what-if (scenario) analysis”. On the other hand, technological advancements made way for plenty of supply chain visualization platforms in the market, subsequently open source software began surfacing. In fact, many open sources already exist such as Apache OFBiz, OpenBoxes, Odoo all of which are open sources for supply chain visualization. Some of them have integrated CRM and ERP tools into their systems to make it effective. Functions such as warehouse management systems, e-procurement, manufacturing management, tracking of stock, expiration date tracking, of multiple facilities and demand forecasting based on historical order quantities have been included8. Introducing new features such as multi-sourcing of data and predictive tools are making these platforms very appealing to the business community. From my intense research on supply chain visualization, I can confidently affirm that this is the next step for supply chains. This is a transformative evolution radically changing the way we perceive data and solve our problems.

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Benefits and Challenges of Supply chain visualization

Benefits

Challenges

Contextual data visualization

Data availabillity

Actionable reporting

Data Integration

Informed, faster decisions

Data disclosure

Collaboration

Supplier Cooperation

Integration

Backend Database

Time to insight

Long setup process

Scalability

Regular updates & Maintenance

Location feasibility

Capital investment

Cloud computation

Platform development

Inventory management

Employee Training

Supply chain intelligence

Experienced Personnel

Supply chain optimization

Testing phase

Supply chain risk management

Cyber security

Supply chain transparency Supply chain performance

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Conclusion Supply chain visualization is the way forward for every business that deals with physical flow of products. In order to better compete, businesses must harness the power of techniques such as supply chain mapping and geographic analytics to improve their supply chains. The business world today competes on the supply chain level more than any other level. Lack of resources, capital and awareness should not stand in a company’s way any longer to create an agile, resilient supply chain. Entrepreneurs should be willing to explore tools and upgrade their operating platforms to the next level since it does not necessarily need an investment. Automation of this whole process with artificial supply chain intelligence is still a long way out. On the other hand, problems are growing in frequency and complexity. Therefore, to keep up with these rapid changes in the ever evolving world of supply chain, entrepreneurs have to provide their supply chain managers with tactical and strategic weapons which can amplify their capabilities and performance in processing raw data and extracting deeply hidden insights. External factors such as circumstances, current events, risks and flaws in their supply chains can also be dealt with efficiently. This helps in avoiding unnecessary use of resources, avoiding huge damages from calamities, staying competitive in the market segment, better customer service, carbon footprint record, leaner and agile supply chain that are responsive to disruptions. All of 16

these advantages add up to a sustainable business. Hence, supply chain data visualization plays a crucial role.

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6. Location Analytics: The Next Big Step in Business Analysis | ArcNews. [online] Esri.com. Available at: http://www.esri.com/news/arcnews/fall12articles/location-analytics-the-next-bigstep-in-business-analysis.html [Accessed 12 Apr. 2016]. 7. Trautmann, C. and Acksteiner, J. (2016). How HP Visualizes its Supply Chain using Geographic Analytics - Supply Chain 24/7. [online] Supplychain247.com. Available at: http://www.supplychain247.com/article/how_hp_visualizes_its_supply_chain_using_geographic _analytics/photos [Accessed 14 Apr. 2016]. 8. Baker, J. (2016). 3 open source tools for supply chain management. [online] Opensource.com. Available at: https://opensource.com/business/16/1/open-source-tools-supply-chain-management [Accessed 16 Apr. 2016]. 9. Argentus.com. (2016). Check out this Awesome Supply Chain Visualization Tool. [online] Available at: http://www.argentus.com/check-out-this-awesome-supply-chain-visualization-tool/ [Accessed 18 Apr. 2016].

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10. Bernstein, W., Ramanujan, D., Elmqvist, N., Zhao, F. and Ramani, K. (2016). ViSER: Visualizing supply chains for eco-conscious redesign | C Design Lab. [online] Engineering.purdue.edu. Available at: https://engineering.purdue.edu/cdesign/wp/viservisualizing-supply-chains-for-eco-conscious-redesign/ [Accessed 18 Apr. 2016]. 11. Tableau Software. (2016). Optimize your fulfillment logistics with a single dashboard.

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