Monday, May 28, 2018

How IoT Will Reinvent Supply Chain Management

CIO Magazine - May 25, 2018

By Maria Korolov

When you call for an Uber, the app shows you a picture of the driver, gives you a description of the car, and includes a map so you can see where your ride is. Plus, you can communicate directly with the driver, in case they need help finding you.

This kind of visibility is coming to the global supply chain as well, allowing sellers and buyers to track their containers, pallets, boxes, and even individual high-value items as they move around the world.

It’s not just optimizing delivery times. It’s also about ensuring that products don’t get damaged during shipping, and getting counterfeit products out of the supply chain.

In pharmaceuticals, for example, counterfeit drugs cost the industry between $75 and $200 billion annually, according to the U.S. Commerce Department.

To make this possible, logistics companies are using internet of things (IoT) devices—smart sensors that can attach just about anywhere.

Tracking trucking

Chicago-based third-party logistics provider AFN uses this technology to make sure delivery trucks are where they’re supposed to be—and shares this information with its customers, such as manufacturers looking to get their goods to retailers as efficiently as possible.

One big step forward was the recent electronic logging device mandate that went into effect this past December, and kicked into full gear in April.

“The electronic logging devices track the hours truckers drive,” says AFN CIO Robert Levy.

The main goal of the legislation to make sure that truck drivers get enough time to rest, so they’re not falling asleep behind the wheel. But the devices can be used for other things as well, such vehicle performance and location.

It replaces existing solutions, such as calling the driver on their cell phone and asking where they are. Large delivery companies would have their own apps or custom-built devices for their drivers to use. The new legislation makes the technology universal.

“Cutting-edge technology isn’t just for high-value, high-risk items anymore—it fits every budget now,” says Levy.

To collect the information from all the various devices in use, AFN turned to FourKites, a technology vendor that collects information from the electronic logging devices and turns it into usable tracking information.

The service is used by Fortune 500 companies and third-party logistics providers like AFN to track shipment location and other variables, such as temperature. Other users include Kraft-Heinz, Cargill, Best Buy, Unilver, and Perdue Foods.

“At AFN, we are leveraging the technology to have exposure for our customers and the shipper,” says Levy. “That’s table stakes now. Can you track my load?”

The company began offering the tracking feature last June, he says. “Before that, you could call and ask where the truck is, or we would push regular updates to you by email. Now, there’s a mobile-optimized portal.”

AFN is also supporting a move toward API standards, he says. Currently, the industry typically uses the legacy Electronic Data Interchange standard, which dates back to the 1960s.

“There’s a big movement in this space to a convert a lot of that legacy EDI technology into API technology,” he says. “We interact with groups and are pushing it actively, but it has not yet become a standard format in the industry.”

Shock and awe

One company that has to ship a lot of goods around the planet is Intel.

“We have a pretty complex supply chain—it’s the fourth or fifth largest in manufacturing,” says Chet Hullum, general manager for the company’s industrial IoT group.

Intel doesn’t just want to know where the shipments are, but also what’s happening to them as they move through the supply chain.

“We have very sensitive machines used in our manufacturing process,” he says. “If those are under any type of shock, they may need to be recalibrated or parts need to be replaced. Light exposure is also a big one—you want to know about tampering, that something was opened.”

Intel, of course, isn’t just a user of IoT technology, but also makes the chips that power it, and it’s working on making sensors to take a variety of different measurements, such as temperature.

“We see a lot of use cases in food, plastics, pharmaceutical, where they must maintain a certain temperature,” he says. “That’s a big requirement for a lot of end users.”

As technology improves, and the prices for the chips go down, IoT will has the potential to dramatically change global supply chains by bringing in large amounts of real-time, actionable data.

This will help enable companies to reimagine their operations, Hullum says. For example, real-time data from IoT can help an organization optimize the layout of its distribution centers. And it can facilitate the creation of new products and features, such as insurance or quality guarantees.

“It ends up being transformational,” he says.

IoT devices are now affordable enough that companies can put sensors on almost anything, says Richard Howells, vice president of IoT and digital supply chain at SAP.

And with companies like Amazon and UPS setting an example, tracking will become standard within the next to 12 to 18 months, he says.

“We’re seeing every one of our customers is either in the research phase or already live with IoT technologies,” he says. “And when we talk about technologies such as AI and blockchain—IoT is ahead of all of those other technologies. In fact, all those other technologies leverage the data generated by IoT.”

According to IDC, worldwide spending on IoT technology will reach $772.5 billion in 2018, up 14.6 over the $674 billion in 2017. Spending is expected to pass the $1 trillion mark in 2020, with manufacturing and transportation the biggest adopters.

IoT in the warehouse

It’s not just trucking where IoT sensors can make a difference in the supply chain. DHL, for example, is using IoT devices in its supply chain warehouses in Germany, Poland and the Netherlands, says Markus Kückelhaus, vice president for innovation and trend research at DHL.

And in China, the company uses a narrowband IoT application to streamline yard management. The IoT chips are embedded into the vehicle detectors, and DHL can collect dock availability in real time, helping it better coordinate drivers and reduce risks of manufacturing delays since materials arrive when they’re needed.

“The IoT allows us to gather the necessary data to optimize our businesses and identify better practices,” he says. “It is revolutionizing business processes across the entire supply chain and logistics.”

DHL predicts that IoT has the potential to generate up to 1.77 trillion euros in additional value for the international logistics industry by 2025.

“There’s an enormous amount of inefficiency in the system today,” agrees Paul Miller, analyst at Forrester Research. “It’s billions of dollars tied up in efficiencies. Hugely inefficient, and a lot of it is actually still based on antiquated technology.”

There are many high-profile, brand-name projects out there, he says, but other than those lighthouse examples, the bulk of the market is moving more slowly. “They recognize where they need to go,” he says. “They see the value in visibility, they see the value in auditability, but they’re not quite there yet. Paper bills of lading still exist.”

“In a lot of the conversations around supply chain, it’s described as kind of boring, kind of invisible,” he says. “But it drives the global economy. It is invisible but it’s not boring, and there’s a real opportunity here to deliver real value.”

The supply chain: Primed for disruption

According to a report released this year by Deloitte and industry group MHI, only 22% of supply chain industry executives say that they are currently using IoT technology—but 79% plan to do so within the next five years.

According to the survey, top concerns include inadequate understanding of the technology, lack of a clear business case, and cybersecurity.

But there’s also a clear understanding that IoT can make a big difference, with 59% reporting that it has the potential to disrupt or create competitive advantage already, and 87% saying that it will do so within the next 10 years.

Of those who are using IoT technologies, 66% say they use it for real-time supply chain analytics. Other uses include customer insights and collaboration, quality control, and for cold chain temperature control and humidity integrity.

Another use of IoT in the supply chain is for use in creating virtual versions of real objects, called “digital twins.” According to a survey released in March, 48% of organizations using IoT either this year.

Digital twins can help alleviate key supply chain challenges, says Gartner analyst Alexander Hoeppe, such as improving cross-functional collaboration or increasing visibility across the entire supply chain.

Copyright 2018 IDG Communications, Inc. All Rights Reserved.
Copyright © LexisNexis, a division of Reed Elsevier Inc. All rights reserved.
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Wednesday, April 18, 2018

Quality 4.0: Fresh thinking for quality in the digital era

Published: Monday, July 24, 2017 by Dan Jacob @ QUALITYDIGEST

The most recent decade has seen rapid advances in connectivity, mobility, analytics, scalability, and data, spawning what has been called the fourth industrial revolution, or Industry 4.0. This fourth industrial revolution has digitalized operations and resulted in transformations in manufacturing efficiency, supply chain performance, product innovation, and in some cases, entirely new business models.

These transformations should be top of mind for the quality team and in particular quality leaders, since quality improvement and quality monitoring are among the top Industry 4.0 use cases companies actively pursue today. Many conversations with quality leaders make it clear that a large portion of them do not have a strategy related to Industry 4.0. In part, this is because they are focused on longstanding challenges in quality management; quality leaders are working initiatives around culture, competencies, processes, compliance, and reactive quality. Some quality leaders also perceive technology initiatives as outside their domain; therefore, they don’t treat them as a priority.

As a result, many of the existing quality-centered Industry 4.0 initiatives are not being led by quality, but by IT, operations, engineering, or sales and marketing. In some ways, this is good. Quality should be a cross-functional responsibility, and the active participation and innovation from other functions is a welcome shift. However, quality leaders should be actively engaged to help ensure the success of these projects, or even better, actively leading them to success.

Why Do I Need to Switch From Batch to Flow?

Moving from batch to flow reveals the waste in your processes and simplifies your work at a systems level, says Art Byrne. It creates simplicity, and a productive tension to deal with problems as they occur, as well as other strategic benefits.

Read further @:

Ask Art: Why Do I Need to Switch From Batch to Flow?:

Thursday, April 5, 2018

People who can’t change their minds can’t change anything else

by Orest (Orry) Fiume, March 29, 2018

There is a serious debate within the lean community as to whether lean is a strategy or an operational tactic. I believe that the roots of this debate go back to when those of us in the U.S. were first exposed to Toyota and the concepts, principles, and practices that enabled the company to emerge from an almost-bankrupt post World War II company to a serious (and eventually leading) competitor in the automotive industry.

Read further @: “People who can’t change their minds can’t change anything else”

Wednesday, April 4, 2018

Transformation Update - ASQ CEO letter

Transformation Update: Where We’ve Been and Where We’re Going 

The transformation of ASQ is moving forward. CEO Bill Troy has an update for members covering where we've been and where we are going. It is the first of many messages that will appear frequently in The Insider in the weeks and months ahead.

Read more

Monday, April 2, 2018

Agile Project Management: 16 Tips for a Smooth Switch to Agile

CIO Magazine, March 26, 2018
By Moira Alexander

Shifting to agile project management can greatly increase your project’s prospects for success. The methodology, which makes use of short development cycles to provide continuous improvement in developing a product or service, is being used across many industries due to its highly collaborative and efficient processes.

But once your organization has weighed its options and made the decision to switch to agile, how can you ensure a smooth transition that benefits both your business and your customers? The following tips and strategies will aid you along the way, greatly enhancing the chances that your organization will pull off a shift to agile without a hitch.

Identify and document your business goals

Prior to jumping to a new project management methodology, it’s important to identify and document your business goals and establish how the switch to a new methodology will better enable you to meet those goals. Business analysis ensures the methodologies employed in your business are effective in helping reach company-wide objectives. There should be a clear line between the methodologies used and how they aid project teams to meet business goals.

Analyze your company hierarchy and culture

Not every organization can benefit from agile methodologies, so it’s important to map out your company hierarchy to gain a better understanding of your ability to support a switch to agile. Determine first whether you have the talent required to meet the commitments of agile development and a hierarchy that can support agile practices.

Another important factor is your culture. Can your current culture support the agile methodology? This can become one of the biggest hurdles in making the switch. If your company has been executing projects using waterfall for a significant amount of time, there may be a reluctance on the part of various groups to make a switch to agile. Your company culture will need to support this change. This is where change management experts, and clear and frequent communication, can smooth the way.

Analyze the impact on your customers

If switching project management methodologies will have a detrimental impact on your customers, it’s not worth undertaking. So you’ll need to identify your customer’s needs and goals, and determine whether, and how, agile will help your project teams better meet your client’s needs. To do this, you’ll need to answer these questions:

How will the switch to agile improve customer experience?
Will the switch to agile produce higher quality and better deliverables?
Will agile help build better collaboration between your team and customers?

Take stock of all available resources

Identify and document all the project resources available. Determine whether your company has the talent and skill sets needed to make agile work well. Identify the technologies available and vendors that can successfully support the switch to agile. Without the right people and technologies in place, making a switch to agile is highly unlikely to yield the benefits anticipated.

Determine how the switch to agile will change processes

Once you have identified your business goals, hierarchy and culture, stakeholder needs, and resources, it’s time to detail exactly how your team will transition from the current methodology to agile and how it will impact on your internal processes. Remember to leverage the knowledge and expertise of a change management specialist from the start and throughout this project.

Map your existing project management strategies and execution

Conduct a comparison between your current project management methodologies and agile project management. Identify possible risk points and analyze your project team’s state of preparedness in dealing with issues that may arise with the switch.

Build a business case and get input from key stakeholders

Now that you’ve covered the business, project, and customer benefits, as well as the risks and logistics around making the switch to agile, you’ll need to build a business case that ensures other stakeholders are afforded an opportunity for input. Without sufficient input from key stakeholders, valuable insights needed to greenlight the switch to agile may be missed.

Document the transition plan and solicit feedback

Once the go-ahead has been given to move to agile, put together a comprehensive project management plan and once again get feedback from key stakeholders, including functional areas, before proceeding. This gives key players a chance to provide additional input that may impact how and when the transition to agile takes place and gives sponsors and stakeholders a greater sense of assurances that the switch to agile will be successful.

Engage the help of a change management expert from the start

Making the switch to a new methodology is an important step that will impact people, processes, and how technology is leveraged. Make sure to engage a change management expert right out of the gate to help you determine what those changes are and how best to deal with them without vital issues falling through the cracks.

Leverage the experiences of companies or experts that have migrated to agile

Before making a switch to agile project management, it may be a good idea to talk with other professionals about their experiences. This can save you a lot of frustration and reduce the chance of making costly mistakes in the process.

Put together a cross-functional project team

Make sure to involve experts and key stakeholders from various functional areas when making a significant switch like this. Their input will be necessary to gain buy-in and to avoid unforeseen problems.

Pilot a few different projects first before jumping in with both feet

Consider piloting a project or two first. This gives you a chance to see if your teams are sufficiently prepared to execute projects using agile before you make the complete switch. This will help you make any necessary adjustments on a smaller scale before a full transition.

Gain feedback on how things are going

It’s important to get feedback from the project team, functional groups, and any other stakeholders to identify how things went and determine whether agile is the right methodology for other projects going forward.

Revisit technologies and processes

When moving to a new methodology, revisit the technologies and processes you currently use to determine necessary changes, and involve a change management expert to ensure nothing is missed. Both of these areas will impact how you execute projects and vice versa. A change to a new methodology will necessitate revisiting the technologies you use as well as adapting your existing processes.

Get everyone on board from the top down

Once you have ensured a switch to agile will work for your company and your projects, received feedback from key stakeholders, involved a change management expert, completed a pilot project using agile, received feedback on the results, and made any necessary adjustments, it’s time to gain full buy-in from the top down before the full switch to agile.

Make the move to agile

Assuming all has gone well, the decision to move to agile has been finalized, and everyone is on board, it’s time to make the full switch to agile project management. To maintain buy-in throughout the switch, frequent and transparent communication is key in ensuring the transition goes well and making sure all stakeholders are kept up to date with progress and developments.

Copyright 2018 IDG Communications, Inc. All Rights Reserved.

Create Greater Process Efficiency

ITWeb Online, March 28, 2018

Implementing a lean, continuous improvement project in an effort to cut waste and improve efficiencies in a business can be harmful and make things worse. That’s according to Emma Harris, operations director at UK-based process improvement company Triaster, who says that one of the most common reasons for improvement project failures is the cuts that are made to seemingly wasteful processes can result in additional costs elsewhere in the organization. “These can outweigh the initial savings.

It is therefore essential when striving to create a lean organization, that everything is handled carefully and correctly and to utilize techniques like process mapping and process management,” she adds. Harris says there are 10 essential steps every organization should follow to improve business processes and reduce wastage.

1. Understand how the business works. The only way to identify inefficiencies in an organization is to adopt a process management approach. This includes developing a process map—a diagram that provides a visual representation of all the processes within the organization. Harris recommends that a full business process management system—rather than a process mapping tool—is used for this complex task.
2. Focus on outputs. Harris defines a process as the transformation of inputs into outputs. However, there are many things done within an organization do not produce an output. She recommends that when undertaking process mapping to keep asking: “What is produced?” This makes it easy to identify wasteful processes.
3. Ask the person who does the job. The person doing the process (or the job) usually has a pretty good idea of where the inefficiencies are—and what should be changed to make the process more efficient.
4. Look at the handover points. These are where most business waste occurs. Examples include one department producing something that is not in the format used by the receiving department, or is not used by the receiving department at all.
5. Look for bottlenecks. Anything that has to wait to be dealt with is not delivering value during this time. Identifying and dealing with bottlenecks can go a long way to addressing and cutting out waste quickly.
6. Involve the person who owns the process. People with the authority to change a process should be involved at the process mapping stage so that they can quickly approve any changes that need to be made.
7. Implement best practice. Very often the same process is delivered in different ways in different parts of the business. Identifying and adopting the best practice process—one that is the most efficient—will improve processes throughout the organization.
8. Capture key data at the process level. This should be done using a BPM system as it allows less obvious inefficiencies to be identified and addressed.
9. Model potential improvements. Once the process model of how the organization currently works is in place, this should be regarded as the starting point for modelling future options. A BPM system that allows for the modelling of different improvement scenarios and allows for the understanding of potential impacts before they are made can help to prevent unnecessary upheaval in the future.
10. Continually look for ways to be more efficient. Identifying inefficiencies cannot be regarded as a once-off exercise but as part of an ongoing improvement process.

Copyright 2018 ITWeb Limited. All Rights Reserved.

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