Wednesday, 28 June 2017

The future has arrived for intelligent operations

Supply chain executives across all industries have been developing digital strategies over the past several years. They are aggressively addressing integrated technologies, including the Internet of Things (IoT) on mobile, collaborative and cloud-based platforms. These executives are applying predictive analytics even more rapidly to all supply chain processes, including asset, inventory, fleet and energy management. They are further automating digital manufacturing, customer service and distribution with robotics and drones. And now, in this cognitive era, these digital operations are being enhanced even more – with artificial intelligence (AI). When combined with advanced automation, thinking and learning, supply chains can be trained to augment and enhance human decision-making and bring about a new level of operational excellence.

To better understand the impact of AI and cognitive computing solutions on supply chain and operations, researchers working with the IBM Institute for Business Value surveyed senior operational executives across a wide range of industries and geographies. We asked more than 1,600 Chief Operating Officers (COOs), Chief Supply Chain Officers (CSCOs) and executives of product development, procurement and manufacturing about their current views on AI and cognitive computing, their priorities and the value that they expect to derive.

Our research shows that COOs and CSCOs are aggressively reinventing business models, strategies and technological capabilities. They are resolute on assisting the CEO in defining agile business models and working with the CMO to support the go-to-market strategy, while backing investments and explorations into new ways of optimizing their supply chain operations.

Pioneering firms are applying these AI and cognitive technologies to their products and their daily operations. Some are living the future; others have just begun the journey.

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Figure 1: Digital investments in the next three years

Supply chain is a natural fit for AI

In our global research data, we identified a group of more than 700 outperformers (12 percent of the total sample) with stronger financial performance than their peers. These companies, across many industries, report annual revenue growth and profit increases of more than
 5 percent over the past three years. We ranked public sector organizations based on effectiveness and efficiency.

Eighty-eight percent of the highest-performing organizations surveyed report that AI is inevitable in their industry. Among those polled, fully 95 percent of the highest-performing organizations see AI as central to their innovation success.

Machine learning is becoming mainstream in the operational technology portfolio. Baseline forecasts for new products are instrumental in determining new product introductions and go-to-market plans. When applied to demand signals, AI can determine changing demand behaviors and optimize inventory levels and replenishment plans to feed the continuous loop of product lifecycle management.

Sales and operations planning is the ultimate collaborative decision-making process. Companies can apply AI technologies to sales and operations planning and other massive supply chain data pools to manage demand volatility, supply constraints, production scheduling and dynamic distribution. AI can augment human interaction by allocating resources, assigning people and scheduling processes.

IBM Tutorials and Materials, IBM Certifications, IBM Guide

IBM Tutorials and Materials, IBM Certifications, IBM Guide

IBM Tutorials and Materials, IBM Certifications, IBM Guide
Figure 2: Outperforming executives use of cognitive computing and AI

Thinking and learning, supply chains can be trained to augment and enhance human decision making and bring about a new level of operational excellence.   Are you ready to embrace AI/cognitive for unparalleled operational excellence?

Thursday, 15 June 2017

Rethinking manufacturing in the digital age

The digital age has brought with it a new way of thinking about manufacturing and operations. Labor rate changes in emerging economies, coupled with challenges associated with logistics and energy costs, are influencing global production and associated distribution decisions. Significant advances in technology, including big data and analytics, the Internet of Things, robotics and additive manufacturing, are shifting the capabilities and value proposition of global manufacturing. In response, manufacturing and operations require a digital overhaul: The value chain must be redesigned and retooled and the workforce retrained – quickly.

In the age of digital operations, information previously created by people will increasingly be generated by machines and things – flowing out of sensors, RFID tags, meters, actuators, GPS and more. Inventory will count itself. Containers will detect their contents. Manufacturing assembly will be robotic and analytically automated. The entire value chain will be connected – not just customers, suppliers and information, but also parts, products and other smart objects used to monitor the value chain. Extensive connectivity will enable worldwide networks to plan and make decisions in real time.

The manufacturing industry is adopting IoT

Manufacturers are embracing the IoT for a number of reasons. In general, they seek to instrument their value chains – from the sourcing of raw materials to the customer delivery and, in some cases, the maintenance and service of already-delivered items.

Intelligent IoT systems enable rapid manufacturing of new products, dynamic response to product demands, and real-time optimization of manufacturing production and supply chain networks through interconnectivity of machinery, sensors and control systems. IoT systems also extend to asset management via predictive maintenance, statistical evaluation and measurements to help increase reliability. Smart industrial management systems can also be integrated with the smart grid, thereby enabling real-time energy optimization. In addition, IoT and cloud-based GPS solutions can help increase visibility of goods in transit. These solutions make it possible to track individual items via chips that talk to each other, transmitting data such as identification, location, temperature, pressure and humidity.

IBM manufacturing

Question: Which of the following areas have been identified as significant drivers of your organization’s Internet of Things initiatives over the next 12–24 months? Source: IDC Perspective: The Internet of Things Gains Momentum in Manufacturing

Robotics is creating new value for manufacturers

The use of robotics in manufacturing continues to increase as new applications are found across the value chain – from production to warehousing, distribution and the customer. Robotics can help companies reduce or eliminate defects, optimize productivity and localize supply chains in a cost-effective manner. As part of the IoT, these robots serve as devices that send and receive signals from applications, making the robots themselves adaptable to changing production and logistics environments. While some technologies, such as driverless trucks, ships and drones, are still in development, others are transforming value chains today.

How can you take advantage?

Increased visibility from highly instrumented and interconnected value chains will help companies identify and eradicate global manufacturing and delivery bottlenecks and quality problems. Here are focus points for manufacturers looking to transform their business with IoT:
  • Take advantage of millions of IoT objects that can report on whereabouts, temperature fluctuations and even theft or tampering.
  • Capitalize on real-time connectivity across the extended value chain to respond in a rapid, coordinated fashion by modeling and simulating operations across the entire network.
  • Supplement business knowledge with analytics knowledge. To begin, pilot new technologies that enable digital operations.
  • Implement technologies like robotics and IoT into your manufacturing and assembly processes to automate, create efficiencies and lower operational costs.

Thursday, 1 June 2017

Bridging IT Skills Gaps to Transform Your Business

IT organizations are increasingly being held accountable to bring digital value to the business and participate as a strategic partner. To this end, IT organizations must ensure they have the right skills at the right time to support the strategic direction of the business and contribute overall ROI. Deploying an IT skills framework provides an opportunity for IT organizations to determine their level of readiness by identifying where skill gaps exist.

IBM Business, IBM Tutorials and Materials

Rapid advances in technology are forcing organizations to radically change their business processes, their organizational structure, how they position themselves in a globally competitive market, and how functional areas within the business work together to achieve common goals and ultimately – business value. Business transformation affects not only all functional areas within the business, but it also has a significant impact on how effectively IT departments can align with strategic and organizational objectives to ensure that technology solutions and services drive a measurable value for the business.

Increasingly, chief information officers (CIOs) are being required to transform the way the IT department supports the business. CIOs need to become key business partners with a seat at the table and are equally held accountable for the digital value that technology brings to business. The old way of adopting and implementing new technology without justification, or satisfy specific “one-off” problems, or to drive technology strategy based upon the attitude of, “Well that’s what we know best,” is no longer appropriate. Today’s fast-paced competitive environment where businesses want to control costs while maximizing revenue, profit margin, and value to the customer demands more.

There are many facets associated with transforming the IT department into a strategic business partner. Factors that are usually overlooked include determining what IT skills are needed, what IT skills are already in place, and how the necessary IT skills are acquired. The reality is that in many organizations, the necessary IT skills tend to lag behind the necessary technology required to support the business. Rarely, is enough emphasis placed on ensuring that IT organizations are “skill ready” with the right skills at the right time.

One way in which this skills gap can be bridged is to embark on an effort to define the necessary skills, assess the skills gap, and close that gap with professional development and training to acquire the new skills that are needed. Organizations can embrace and deploy an IT skills framework that will enable IT to become a strategic business partner. Ultimately, positioning them to transform the business. James’ paper addresses the necessary steps for deploying an IT skills framework, as well as the opportunities, challenges, best practices, benefits, and strategic results that facilitate business transformation.

Game Changers

There are three primary game changers that are driving business transformation with respect to having the right IT skills at the right time.

1. Emerging Technology

James views emerging technology as being multifaceted. First, it’s about the technology itself. Second, it’s about how that technology is deployed, adopted, and consumed. Third, you must consider how the technology is being managed.
The trends in emerging technology are currently focused in five major areas: cloud, mobile, social, data, and security. These trends impact the way IT organizations must support the business. Employees need to acquire new IT skills in order to understand how these emerging technologies can drive business value, both internally and externally. Emerging technologies such as new licensing and consumption models for cloud-based services and their impact on expenditures and costs such as capital expenditures (CAPEX), operational expenditures (OPEX), and total cost of ownership (TCO), require new IT skill sets.
New IT skills that are required for managing the adoption of emerging technology, such as software asset management, governance, service level management, etc., are emerging along with the technology itself. The question is, “Are your IT employees sufficiently ready and skilled enough to effectively support the adoption, implementation, consumption, and management of emerging technologies?”

2. Evolving Workforce

Today’s IT workforce is segmented across three generations of people and it’s rapidly including a fourth generation. This generational influx and shift is shaping how people want to work, the type of work they want to perform, and their expectations about how technology is used. Bring your own device (BYOD) and bring your own application (BYOA) are two trends that are transforming the workplace. This is placing more pressure on IT organizations to support these trends by establishing the supporting infrastructures. Increasingly, there is more emphasis on the ability to work remotely, have flexible work hours, and a trend to be less committed to a long-term job.

3. Customer Expectations

Customers are expecting more services and are becoming accustomed to mobile services, the freedom to choose products and services, and being provided with a strong value proposition. The Internet of Everything (IoE), which brings together people, process, data, and things, is transforming how IT organizations can more effectively enable businesses to support their customer base.

Download the full White Paper