Learnings and Insights From the 2023 Gartner® Supply Chain Symposium: Part 2
Last month, at the 2023 Gartner® Supply Chain Symposium in Orlando, Florida, there were many key supply chain themes that emerged. This is Part 2 of the learnings and insights from the discussions with supply chain leaders and from additional sessions by Gartner analysts about new technologies that will be beneficial to long-term supply chain performance. Read Part 1 to gain additional insights.
Robotics Growth Trends
There will be exponential growth in robotics over the next decade, according to Gartner Analyst Dwight Klappich during his session “Intralogistics Smart Robots: What’s Your Flavor of the Day.” He added that one-third of all medium to large warehouses will have at least one robot platform operational by 2030.
Dwight mentioned that the top two internal hurdles to achieving the goals in logistics are labor and cost control. He added that for some warehouse operations, the labor turnover can be as high as 60%. According to respondents of the “2022 Gartner Supply Chain Technology User Wants and Needs Survey”, the motivation for automation investments are labor availability (59%) and labor costs (41%). In addition, 96% of the surveyed companies are currently or planning to use robotics and 93% are planning to increase the size of robotics fleets.
With robotics maturing, this is not a bleeding-edge but a leading-edge investment category. What is different nowadays is the level of intelligence of robotics solutions, as well as several other aspects including:
- Sensory aware
- Data rich
The number of categories of intralogistics smart robots (ISRs) has grown to 34, with the top categories being Transport, Collaborative Picking, Goods-to-Person, Sortation, Robotic Picking, and Engineered Robotic Systems. According to the same survey, only 4% of respondents have no plan to adopt ISRs. Many other respondents are more receptive: 23% are piloting, 38% are beginning to implement, 28% have had first deployments, and 8% have deployed fully.
Dwight added that 75% of large enterprises will have adopted some form of intralogistics smart robots in their warehouse operations by 2026. The impact of increased adoption, however, still falls into four categories: supplement, collaborate, enhance, and replace.
Learnings from a Gartner Top 10 Supply Chain Leader: Lenovo
In his session “Driving Digital Supply Chain Excellence,” Jack Fiedler, Vice President, Digital Transformation of the Global Supply Chain & Infrastructure Solutions Group at Lenovo spoke about the company’s leadership as a purpose-driven organization and the operational excellence of its global supply chain.
The Lenovo supply chain has over 150 million annual shipments (about 4 to 5 devices per second) and 3,600 Tier-1 suppliers. From managing logistics and its relationships with component suppliers and partners to its unique global hybrid manufacturing footprint of over 35 factories around the world, Lenovo’s supply chain has been a core strength of the company.
The supply chain has been cited in the company’s recent full fiscal year earnings as a key factor in its ability to stay flexible and resilient in the face of industry challenges – while helping it deliver record financial results. The company has invested over $100 million in its Digital Transformation the last few years. The Digital Transformation effort has transitioned from efficiency focused to customer-centric focused. The team asked questions as it designed the digital initiatives, such as:
- How best to change product design and supply chain capabilities to deliver a world-class experience.
- How to improve supply agility while the entire industry is actually getting more constrained.
- How to better insulate customers from supply chain risks.
- How to expand data visibility and transparency well beyond Tier-1 and Tier-2 suppliers.
According to Jack, Lenovo leverages Blue Yonder to fulfill its supply chain transformation vision and requirements, because Blue Yonder has the only supply chain planning suite that can handle its levels of company, product and process complexity and workload. Blue Yonder has been invaluable in helping design, customize, and build the new set of capabilities and has the most forwarding thinking roadmaps that will be strategic to Lenovo’s success.
The team targeted three main areas: forecast-to-commit process, order-to-delivery process, and supply management. The team carried out transformation initiatives that essentially flipped the supply chain upside down, from a manufacturing plant-led supply chain to a top-down, digital-twin type of supply chain. The team:
- Mapped and digitalized the entire supply chain data available from ODMs, suppliers, factories, parts hubs, and applied AI to simulate how best to orchestrate the supply chain to satisfy customers orders. Instead of the supply chain reacting to orders received by customers, the team is simulating supply chain outcomes and then proactively manipulating the supply chain to achieve the optimal outcome.
- Applied AI to better leverage the digital twin in the order-to-deliver process and created much better order promise date coverage and accuracy.
- Improved supplier collaboration data by standardizing all the data across the entire supply chain, including with their suppliers and ODMs. The team enhanced the supply collaboration portal to ensure the data was flowing smoothly back and forth between Lenovo and the suppliers and measured the accuracy. The team also greatly achieved a much deeper collaboration with the supply base.
- Added AI to enhance the data accuracy. For example, the team applied ML to the supply ETAs and discovered they could improve the accuracy of the supplier’s own ETAs by 10-20%. This was a huge improvement and potentially could help reduce some inventory buffers that the team used to offset the date inaccuracies.
This digital journey enabled Lenovo to achieve several key benefits so far, including:
- Overall order-to-delivery increases by 4%. This number should continue to climb as they refine the model and the AI continues to learn. Also, these results were during the most supply constrained periods, so the team fully expects that the performance will continue to improve.
- Delivery accuracy is up 5%, resulting in much higher customer satisfaction as they are doing a better job mitigating disruptions and leveraging AI to insulate customers from false alerts. This improved accuracy also allows them to better plan manufacturing and logistic capacity utilization.
- Inventory turns increased by 10% as they can now place inventory more optimally within the entire supply chain’s internal and external networks. They can also better highlight the inventory and available-to-sell to the sales team.
- Supply chain planners’ productivity is up 19% as they have effectively leveraged the power of end-to-end data and AI. The planners get to work on higher value things and leave more of the data crunching to the connected planning system. This leads to overall higher employee morale as well.
Blue Yonder is proud to be supporting Lenovo’s digital transformation journey. To learn how Blue Yonder can support your supply chain digital transformation, visit www.blueyonder.com.