ICON 2023: Manufacturing’s New Tomorrow
ICON 2023 is Blue Yonder’s annual customer conference and premier supply chain event, where practitioners and decision-makers exchange insights about their transformation journeys If you are in the manufacturing field, why should you attend this year’s event? I spoke with Blue Yonder’s Hong Mo Yang, SVP, Manufacturing Industry Strategy, during a recent Blue Yonder Live session where he shared the top supply chain opportunities and challenges, what to expect this year from ICON 2023, and some of the key highlights for manufacturing sessions.
Terence: Please share with us what are the top current issues facing the manufacturing industry?
Hong Mo: Disruptions, Black Swan events and geopolitical events, like the conflict in Ukraine and U.S.-China tension were some of the biggest impacts manufacturers saw these past few years. This has led to the nearshoring redesign of supply network and manufacturers trying to figure out, “Where do I need to put my inventory” and “How do I think about sourcing of material and goods so that I can fulfill to my customers?”
Then layer on top of that some of the things that have happened with interest rate hikes, inflation, labor shortages, and some of the recent bank failures that all have had an impact on capital availability and supply. All of those issues are going to have an impact on manufacturing companies that are at the same time dealing with how to make sure they are able to deliver profitable growth to their shareholders and on customer service requirements.
Terence: As you are speaking to manufacturing companies and their executives that are looking to overcome these challenges, how are you advising them and what are they doing in overcoming these challenges?
Hong Mo: A lot of customers that I talk to are really trying to make the transition from the early stages of COVID-19 where they were trying to figure out how they make sure they have product availability on the shelf and that there’s continuity to now it being about having product availability at all costs. And doing it with customer service in mind, as well as profitability. The other thing that has really been very prominent is how do they reduce inventory and free up cash flows so that they can have sustainable, profitable growth in the business.
Terence: So, it’s about improving these metrics and business performance simultaneously. Can you shed some light on that?
Hong Mo: OTSR, which stands for Operational Total Shareholder Returns, is important. The components of the key metrics that make up the OTSR are profitability; revenue growth; the cost to serve, which is related to operating costs and how you deliver products to your customer; cash to serve, which includes both inventory that you outlay as well as capital expenditure in terms of your further growth; and then customer service level.
The other key item we are seeing as we talk about OTSR is sustainability. And that is something that is constantly coming up as a topic of interest that our customers are dealing with, as they serve their market and their customers and consumers.
Terence: Why should manufacturing companies attend ICON? What benefits will they gain that they can bring back to their company?
Hong Mo: I was having a conversation with one of our high tech customers about nine to 12 months ago. At the time, demand had spiked up to where the lead time to be able to deliver to their customer orders was really, really long. As they were ramping up their supply capabilities and capacities, they were wondering when they would be able to start reducing their lead time to deliver. As they worked through some of their backlog, their concern was: will they actually end up having more inventory because some of the demand that they saw was really people double ordering or triple ordering because they were not able to get the allocation.
Fast forward to today, many of our customers are dealing with excess inventory. I bring this up because there are opportunities at ICON for manufacturers to share with their peers the challenges they face and how they are overcoming them. It is a great event to have those discussions and learn from one another.
They will also hear from Blue Yonder about where we are headed as a company. What solution areas we are focused on in terms when customers are dealing with a lot of complex issues, such as the need for efficiency, cost optimization, and being able to right-size inventory. We will also look at how manufacturers take advantage of the AI capabilities that are coming up, like Generative AI. Looking at what different companies are doing as related to AI and how that could actually help them serve the agenda of being able to better operate as a business, leveraging some of the upcoming capabilities.
Terence: Thank you for the insights. Please also highlight some of the not-to-be-missed sessions that we have lined up?
Hong Mo: I’m really excited with the lineup of customer presentations – and we have a wide variety! In the fast-moving consumer goods space, we have Coca-Cola FEMSA presenting. From a high-tech semiconductor, we have both Analog Devices and Micron Technology presenting. For automotive, we have MB USA talking about the aftermarket parts supply network. And in life sciences, we have Cepheid talking about how they’re delivered a lot of the COVID-19 testing capabilities. Again, I am really excited by the wide variety of industries being represented, as well as the really interesting insights that you will be able to glean and learn from every one of these presentations.
Terence: Are there other aspects about ICON that you would like to add?
Hong Mo: One of the things that almost everyone talks about after attending ICON is the real business value of networking and learning from one another. And for me, just having the opportunity to speak with different customers really is energizing. A lot of our customers really value being able to have a network of peers both within their industry and also outside of the industry. It helps them understand the business issues that they’re facing that might be similar to what others are facing too and what are some of the best practice that different businesses are using to address the issues. I really look forward to the interactions, networking, and learning from one another during ICON!
To learn more about ICON 2023 and to register visit blueyonder.com/ICON.
To watch the Blue Yonder Live session click here.