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The term digital transformation means different things to different people. But one thing it means to a growing set of companies is running proof of concepts or pilots and learning from them. Historically, companies looking at a technology solution would put together a detailed business plan, and then only implement the technology if the forecasted financial returns exceeded their return on investment (ROI) target. But more companies are experimenting with digital technologies regardless of whether the ROI is there or not. As Diana Salguero – the IT Director for the Americas at Vopak – said in a presentation at ARC’s Forum about a solution they worked with, “a proof of concept never fails, you just learn from it.” In their case, the proof of concept of an IoT/energy planning solution in one department of the terminal failed, but they learned enough to go ahead and successfully pilot the solution across the terminal.

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There are some technologies that are relatively easy to pilot. Some types of autonomous mobile robots (AMRs) can be deployed without integration to warehouse management systems. Rather, call buttons are used to summon the bots. Integration, of course, drives up costs. Further, a company can work with just one or two AMRs and see what happens. This is a low-cost experiment.

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But in the supply chain planning (SCP) market, production pilots require integration to enterprise resource management or various supply chain systems, cleaning up dirty data, and the configuration efforts of an implementation team. This kind of pilot costs much more. For this kind of pilot, it is much harder to take the attitude that “Hey, if it works great. If it does not, oh well, I’ve learned something.” Many companies pilot SCP solutions, but they do no pilot them with the attitude that a failed pilot is acceptable because they have learned something.

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This was a topic of conversation between me and Nil Durak, Chief Operating Officer, and Omer Bakkalbasi, Chief Innovation Officer, of Solvoyo, during a recent briefing. Solvoyo is an innovative provider of end-to-end planning, visibility, and analytics solutions. In their case, they are beginning to get their solution in front of digital transformation teams. And to underscore the spirit of digitalization, they call their pilots “test-and-learn.”

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How realistic is this? They have just completed a test-and-learn with a very large consumer goods company. This pilot includes an end-to-end supply chain solution designed to generate concurrent (a plan across production, fulfillment, transportation, etc. that is generated centrally and executed locally), low touch plans in which, 85 plus percent of the time, the model-generated plan is executed as-is. In short, this is a project with a big scope, and it is consequently a big effort. Yet unlike traditional solutions, it did not cost the consumer goods company millions to pilot this and it went live in 6 months. This pilot is generating real plans that help to optimize this company’s business.

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Now compare that to the potential savings. When I threw out the number “tens of millions” in potential savings, Ms. Durak and Mr. Bakkalbasi agreed with the number. And I did not throw that number out arbitrarily. For global multinationals pursuing a supply chain transformation, that is a conservative number. A recent benchmarking study shows that multi-echelon inventory optimization reduces a company’s inventory investment by 13 percent on average without sacrificing service. Furthermore, our internal ROI research shows transportation optimization generates freight savings on average of 8 percent of the freight spend, and so forth, across the full set of supply chain applications. With big companies, those savings end up in the tens or even hundreds of millions of dollars for implementations with a broad scope.

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However, a test-and-learn should go both ways. A company can fund a pilot and demand that their existing rules for how the company conducts its business be respected. But a true digital test-and-learn would look to see what the unchained solution could generate in savings if it was not fettered by respecting constraints that reflect the traditional ways of working. In the case of this pilot with the consumer goods company, the constraints were to fulfill orders to the most important customer first, second most important customer next, and so forth until you get to much less important customers. It was only with these less important customers that the optimization engine could finally be unleashed to drive savings. In this case, Solvoyo estimates that the scope for optimization is limited to only 1 to 4 percent of the search space if the constraints were not removed. The company may be leaving a lot of savings on the table by continuing to use traditional rules for allocation. Optimization can be used to relax rules while not sacrificing service commitments for any high priority orders.

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In marketing there is a well-known phrase stating that “half the money I spend on advertising is wasted; the trouble is I don’t know which half.” For smart companies, that has never been true. It is possible to run a test ad in one small region of the country and see what the lift is.

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The same thing is true in supply chain management. For a multi-national company, it is possible to relax the constraints, see how service is impacted, and do it in just one country for one small set of products.

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In conclusion, when it comes to digital transformations, there should be experimentation with both the technologies and the way those technologies are used. It can be difficult to take this approach when it impacts the way a company is doing business. But it is possible. And it is likely that this consumer goods company has a champion that will be willing to do these experiments.

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The term digital improvement indicates various things to different individuals. But one thing it means to a growing set of business is running evidence of ideas or pilots and finding out from them. Historically, business looking at an innovation service would assemble a comprehensive business plan, and after that only execute the technology if the forecasted monetary returns surpassed their return on financial investment (ROI) target. But more companies are try out digital innovations despite whether the ROI exists or not. As Diana Salguero – the IT Director for the Americas at Vopak – stated in a discussion at ARC’s Online forum about a service they worked with, “a proof of principle never ever fails, you just gain from it.” In their case, the evidence of idea of an IoT/energy planning service in one department of the terminal stopped working, however they found out enough to go on and effectively pilot the service across the terminal.

There are some innovations that are fairly simple to pilot. Some kinds of autonomous mobile robotics (AMRs) can be released without combination to storage facility management systems. Rather, call buttons are used to summon the bots. Integration, of course, drives up expenses. Even more, a company can work with just one or 2 AMRs and see what takes place. This is a low-cost experiment.

However in the supply chain preparation (SCP) market, production pilots need combination to enterprise resource management or different supply chain systems, cleaning up unclean information, and the setup efforts of an application group. This sort of pilot costs a lot more. For this kind of pilot, it is much harder to take the attitude that “Hey, if it works terrific. If it does not, oh well, I have actually learned something.” Many business pilot SCP options, but they do no pilot them with the mindset that a failed pilot is acceptable because they have discovered something.

This was a subject of discussion between me and Nil Durak, Chief Operating Officer, and Omer Bakkalbasi, Chief Innovation Officer, of Solvoyo, throughout a current briefing. Solvoyo is an ingenious company of end-to-end planning, visibility, and analytics services. In their case, they are beginning to get their option in front of digital transformation teams. And to underscore the spirit of digitalization, they call their pilots “test-and-learn.”

How realistic is this? They have actually simply completed a test-and-learn with a very big consumer products business. This pilot consists of an end-to-end supply chain service created to produce concurrent (a plan across production, satisfaction, transportation, and so on that is generated centrally and carried out locally), low touch plans in which, 85 plus percent of the time, the model-generated plan is carried out as-is. In other words, this is a project with a huge scope, and it is subsequently a big effort. Yet unlike standard options, it did not cost the durable goods business millions to pilot this and it went live in 6 months. This pilot is generating real strategies that assist to enhance this business’s business.

Now compare that to the prospective cost savings. When I tossed out the number” 10s of millions” in possible savings, Ms. Durak and Mr. Bakkalbasi agreed with the number. And I did not throw that number out arbitrarily. For worldwide multinationals pursuing a supply chain transformation, that is a conservative number. A current benchmarking study shows that multi-echelon inventory optimization decreases a company’s inventory investment by 13 percent typically without compromising service. In addition, our internal ROI research shows transport optimization produces freight cost savings usually of 8 percent of the freight invest, and so forth, across the full set of supply chain applications. With big business, those savings wind up in the 10s and even numerous millions of dollars for implementations with a broad scope.

Nevertheless, a test-and-learn needs to go both methods. A business can fund a pilot and need that their existing guidelines for how the company conducts its service be respected. But a real digital test-and-learn would want to see what the unchained solution could generate in cost savings if it was not fettered by respecting restrictions that show the conventional methods of working. When it comes to this pilot with the durable goods company, the constraints were to meet orders to the most important consumer initially, 2nd crucial client next, etc until you get to much less crucial consumers. It was only with these less crucial customers that the optimization engine could finally be unleashed to drive savings. In this case, Solvoyo estimates that the scope for optimization is limited to just 1 to 4 percent of the search area if the constraints were not eliminated. The company might be leaving a lot of savings on the table by continuing to utilize conventional rules for allowance. Optimization can be used to unwind guidelines while not compromising service commitments for any high top priority orders.

In marketing there is a popular phrase specifying that “half the money I invest on advertising is wasted; the difficulty is I do not know which half.” For clever companies, that has never been real. It is possible to run a test ad in one small area of the nation and see what the lift is.

The very same thing holds true in supply chain management. For a multi-national business, it is possible to unwind the constraints, see how service is affected, and do it in just one country for one little set of items.

In conclusion, when it pertains to digital improvements, there need to be experimentation with both the innovations and the way those technologies are utilized. It can be hard to take this approach when it impacts the method a company is operating. But it is possible. And it is most likely that this durable goods business has a champion that will want to do these experiments.

” >

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The term digital improvement indicates various things to various individuals. But something it implies to a growing set of business is running evidence of concepts or pilots and gaining from them. Historically, business looking at an innovation option would put together a comprehensive business strategy, and then only execute the technology if the anticipated financial returns surpassed their roi (ROI) target. But more business are experimenting with digital technologies no matter whether the ROI is there or not. As Diana Salguero – the IT Director for the Americas at Vopak – said in a presentation at ARC’s Forum about an option they dealt with, “an evidence of idea never stops working, you just find out from it.” In their case, the proof of concept of an IoT/energy preparation service in one department of the terminal failed, but they found out enough to proceed and successfully pilot the service across the terminal.

There are some innovations that are relatively easy to pilot. Some types of autonomous mobile robotics (AMRs) can be deployed without combination to storage facility management systems. Rather, call buttons are used to summon the bots. Integration, obviously, increases expenses. Even more, a company can work with simply one or two AMRs and see what occurs. This is an inexpensive experiment.

But in the supply chain preparation (SCP) market, production pilots need integration to business resource management or different supply chain systems, tidying up dirty data, and the setup efforts of an application team. This sort of pilot expenses far more. For this sort of pilot, it is much more difficult to take the attitude that “Hey, if it works fantastic. If it does not, oh well, I have actually found out something.” Numerous companies pilot SCP services, however they do no pilot them with the mindset that a stopped working pilot is appropriate because they have actually learned something.

This was a topic of discussion in between me and Nil Durak, Chief Operating Officer, and Omer Bakkalbasi, Chief Development Officer, of Solvoyo , throughout a current briefing. Solvoyo is an ingenious company of end-to-end preparation, exposure, and analytics options. In their case, they are starting to get their solution in front of digital change groups. And to highlight the spirit of digitalization, they call their pilots “test-and-learn.”

How practical is this? They have simply finished a test-and-learn with a huge consumer products company. This pilot consists of an end-to-end supply chain solution designed to generate concurrent (a strategy across production, satisfaction, transport, and so on that is created centrally and performed locally), low touch strategies in which, 85 plus percent of the time, the model-generated plan is executed as-is. In short, this is a task with a huge scope, and it is consequently a huge effort. Yet unlike standard options, it did not cost the durable goods company millions to pilot this and it went reside in 6 months. This pilot is producing real strategies that help to optimize this business’s company.

Now compare that to the potential cost savings. When I threw away the number “10s of millions” in potential savings, Ms. Durak and Mr. Bakkalbasi agreed with the number. And I did not toss that number out arbitrarily. For worldwide multinationals pursuing a supply chain change, that is a conservative number. A recent benchmarking research study shows that multi-echelon inventory optimization reduces a company’s inventory financial investment by 13 percent usually without compromising service. In addition, our internal ROI research shows transport optimization generates freight cost savings usually of 8 percent of the freight spend, etc, across the complete set of supply chain applications. With big business, those savings end up in the 10s or perhaps hundreds of countless dollars for implementations with a broad scope.

Nevertheless, a test-and-learn must go both ways. A business can money a pilot and demand that their existing rules for how the company conducts its business be appreciated. But a true digital test-and-learn would aim to see what the unchained service could produce in cost savings if it was not fettered by appreciating constraints that show the traditional methods of working. When it comes to this pilot with the customer items company, the constraints were to meet orders to the most crucial consumer first, 2nd essential consumer next, etc up until you get to much less crucial customers. It was just with these less important clients that the optimization engine could lastly be let loose to drive savings. In this case, Solvoyo approximates that the scope for optimization is restricted to only 1 to 4 percent of the search area if the restrictions were not gotten rid of. The company might be leaving a lot of savings on the table by continuing to use traditional rules for allowance. Optimization can be utilized to unwind rules while not compromising service dedications for any high concern orders.

In marketing there is a widely known expression mentioning that “half the cash I invest in advertising is squandered; the difficulty is I do not know which half.” For wise business, that has actually never ever been real. It is possible to run a test ad in one small area of the nation and see what the lift is.

The same thing holds true in supply chain management. For a multi-national company, it is possible to unwind the restraints, see how service is affected, and do it in just one country for one little set of products.

In conclusion, when it pertains to digital transformations, there should be experimentation with both the innovations and the method those innovations are used. It can be difficult to take this approach when it affects the method a business is working. However it is possible. And it is most likely that this customer goods business has a champion that will be prepared to do these experiments.