White Paper Planning The Future Supply Chain Together NEW TECHNOLOGIES: BIG DATA, 3D PRINTERS, DRONES

White Paper Planning The Future Supply Chain Together NEW TECHNOLOGIES: BIG DATA, 3D PRINTERS, DRONES

Acknowledgements The ISLI Supply Chain Forum Team 2015 would like to warmly thank the following persons involved in the preparation of this white paper: BABAI Zied, Professor KEDGE Business School DUCONGE Emilie, Assistant KEDGE Business School ESTAMPE Dominique, Professor KEDGE Business School FERREY Marc Principal, CAPGEMINI Consulting GOMBERT Louis-Francois, President, Club Demeter JAEGLER Anicia, Professor KEDGE Business School JI Jessie, Supply Chain Operational Design Manager, BASF China KLIBI Walid, Professor KEDGE Business School LEE Sherrine, Supply Chain Director, HUAWEI Singapore MONTALBANO D AMICO Sandy, Director of Media, RESHORING INITIATIVE RAY K.S., General Manager Sales & Marketing, ASLTOM India ROCHET François, Associate, DIAGMA RIM Eugene, CEO, EUSU - HANJIN LOGISTICS Authors - ISLI Supply Chain Forum Team 2015 ISLI Program Students - Master of Science in Global Supply Chain Management ALLAM Marion BAKLEH Maxime BANERJEE Suman GLUSMAN Benjamin HAAKE Beau KANAKOPOULOS Konstantinos LAINAS Alexis MAITRE Océane MALDEME Marie NAVIA Laura ORLUC Céline PETRIKOVA BELGOUZIA Larissa WEI Linjun ISLI KEDGE Business School White Paper Planning The Future SCM Together 2

EDITORIAL The KEDGE Business School ISLI program specialized in Global Supply Chain Management hosts for 25th year in sequence 300 Supply Chain leaders from all around the world. It is a moment during the year where professionals within the field can come together to discuss, exchange, and share amongst themselves and the future supply chain players, their experiences and their vision. There are numerous factors that impact the supply chains and appear to challenge more and more their ability to adapt. These factors include: the environmental constrains, the models of consumption, the emerging technologies and the consequences of the current economic models. Therefore, the solutions of today will no longer work for the problems of tomorrow, and without a doubt there will be a need to combine adaptability with durability. That is why the ISLI forum wishes to bring together the best supply chain specialists to discuss the following themes: Sustainable Supply Chain Insure your Supply Chain Control: Critical Success Factors Sourcing Strategies: Re-shoring vs Offshoring How to manage Supply Chain Relationship and Collaboration? New Technologies: Big Data, 3D Printers, Drones The discussion and a summary of the proposed solutions will be grouped in 6 White Papers White paper Planning the Future Supply Chain Together NEW TECHNOLOGIES: BIG DATA, 3D PRINTERS, DRONES Dominique Estampe, Director ISLI KEDGE BS ISLI KEDGE Business School White Paper Planning The Future SCM Together 3

Table of Content I. NEW TECHNOLOGIES: BIG DATA, 3D PRINTERS, DRONES... 5 OVERVIEW... 6 FINDINGS... 7 Big Data... 7 A. 3D Printers... 11 B. Drones... 15 EXECUTIVE INSIGHTS... 21 A. Marc FERREY, Principal, CAPGEMINI Consulting... 22 B. François ROCHET, Associate, DIAGMA... 24 OPPORTUNITIES... 26 REFERENCES... 27 ISLI KEDGE Business School White Paper Planning The Future SCM Together 4

I. New Technologies: Big Data, 3D Printers, Drones ISLI KEDGE Business School White Paper Planning The Future SCM Together 5

Overview How does the Supply Chain manager deal with material, information and money flows? In order to reach the maximum performance businesses should reduce their cash to cash cycle time. This is possible by speeding up the production and deliveries delay, being more adaptive, and insuring the best quality standards to meet and satisfy new demands. 3D printing reduces the lead-time from the idea to the production cycle and gives us the maximum agility to reach our target. Think global make local. Drones help us in the production and delivery process reducing significantly labor cost and solving problems of accessibility. In production drones can help us during the production or in the warehouse. Big data, what is this? Smart data is a key asset to implement real time supply chain and optimize the supply network. How are new technologies transforming tomorrow s supply chain by increasing speed and flexibility? What is the place for new technologies in the future scenarios? ISLI KEDGE Business School White Paper Planning The Future SCM Together 6

Findings Big Data Big data is defined as large dataset that is difficult to process with actual computers and software. The difficulty is due to high Volume, high Variety and High Velocity: the three V s model (Gartner, 2011). The definition is subjective and incorporates technology limitation, resulting in a moving definition of how big should be the data to be considered big data. In the industry, big data is related to the sector s technology available and what is the standard dataset size in the field. It is safe to think the more the technology is improving, the dataset we consider big data is getting bigger and bigger. In businesses, big data analytics is considered as a disruptive technology that will redesign business intelligence, focusing on data analysis to enhance the decision-making process (Shaokun Fana, 2015). In supply chain, Radio frequency identification (RFID) is widely used in supporting the logistics management on manufacturing shop floors where production resources attached with RFID facilities are converted into smart manufacturing objects (SMOs) which are able to sense, interact, and reason to create a ubiquitous environment, for example the data self-feeding Internet of Things (IoT). Within such environment, enormous The 3 V s Volume: Is generated by new tools of collection as RFID or sensors. Too much volume is storage and also an analysis issue. Variety: The data comes from different datasets, with their own hierarchy, format and language. Translating large volume of those data into decision is one of the great challenges of big data technology. Velocity: Refers to the access or delivery availability of data; how fast should be the data collected and processed to meet the demand. (Gartner, 2011) data volumes are collected and used for supporting further and smarter decision-makings such as logistics planning and scheduling (Ray Y. Zhong, 2015). ISLI KEDGE Business School White Paper Planning The Future SCM Together 7

Big data in supply chain is an opportunity to deepen customer and suppliers relationships, focusing on each individual needs of the supply chain network actor to deliver highly customized solutions. Analytics tools are getting into much more details, allowing to see and interact with previously hidden information. This tool combined with the correct business strategy is a key asset to outmaneuver competitors. In this paper, we will focus on supply chain applications of Big Data using the SCOR modeling and re-engineering framework metrics (Plan, Source, Make, Deliver and Return (APICS, 2014). Plan using Big Data Planning is the key process of an efficient Supply Chain (SC). Planning balances between the aggregated demand and supply to develop an action scenario that best meet the sourcing, making and delivering requirements (APICS, 2014). Big Data technologies offer new insights among the supply chain network. Allowing us to see what we didn t know was hidden. Because of the data collecting process automation, the raw data is sometimes incomplete, inaccurate or redundant. Nevertheless it carries rich information for advanced decision making. In order to improve the quality of dataset, several key procedures have recently been proposed such as a RFID-cuboid cleansing algorithm for cleaning the dataset; detecting and removing the data noise (Ray Y. Zhong, 2015). Such process allows us to plan with an autonomous Big Data system that can do quality real time recording of the Supply Chain. RFID cuboid: gathering of several information in different dimensions such as operator names, time in transit, coordinates, etc. in an RFID tag. The cuboid carries valuable information about the business operations. Map table: The use of data to elaborate charts and other graphic representations To convert abstract data into logistic knowledge and thus enterprise- oriented strategy, recent studies suggest using userfriendly Map Table that can be directly feed by the Big Data system (Ray Y. Zhong, 2015). Big Data systems can be linked to social networks data algorithm, then can assess texts from reviews on the Tweets and other social media, correlate them with seasonality, promotional ISLI KEDGE Business School White Paper Planning The Future SCM Together 8

impact to provide better understanding of the market desires, allowing predictive forecasting (Ray Y. Zhong, 2015; Matthew A. Waller, 2013). Planning with Big Data is getting more efficient in autonomously collecting, cleaning and processing the SC and market data, to obtain real time decision making knowledge. Source using Big Data Sourcing is the process that procures the goods to meet planned (forecast) or actual demand (APICS, 2014). In order to be as close as possible to the perfect sourcing strategy, we can use Big Data abilities to collect and monitor the real time actual demand over the SC network providing valuable visibility of the present situation. In conjunction, Big Data enables complex forecasts. The computing power allows running several simulations with a different combination of sales level, supplier s location, inventory level and shipping prices to find the best pattern to meet the future demand, for each item, providing a key asset in a negotiation process (Matthew A. Waller, 2013). Sourcing with Big Data systems can leads to present competitive advantage. It is thought to become so decisive, it can be pretty soon a barrier to entry for future businesses. Make using Big Data Making is the process that transforms goods to a finished product, in order to meet an actual or forecasted demand (APICS, 2014). Big Data can help to solve previously unsolvable or unknown problems that affect complex manufacturing environment. Systemic difficulties like hidden bottlenecks are slowing down and disrupting the production lines; operational rigidities are decreasing the agility and worker motivation; areas of excessive variability can be spotted and rationalized. Big Data high-level analytical solutions help to identify and control the performance on those difficulties. In lean management this can be used to empower the workers and make them participate to the processes improvements (Rajat Dhawan, 2014). ISLI KEDGE Business School White Paper Planning The Future SCM Together 9

Real time production analysis gives clear insights on the usage of the tools, allowing predictive maintenance to cut down the cost, the risks and avoid SC disruptions. This is a new way to regulate the production lines and the people. Deliver and Return using big data Delivering is providing the finished goods and services to meet planned or actual demand. Returning is returning or receiving returned goods, for any reason. This process extends to post-delivery (APICS, 2014). The traveling salesmen problem is an eighty years old very famous route optimization problem. Big Data s rapid processing of real time shipping data, such as congestion, accidents and availability of the docking sites allows us to answer this problem in dynamic situation (Ray Y. Zhong, 2015). DHL uses this technology to reroute in real time its vehicles (DHL, 2013). Cutting down logistic costs and lead time is not the only benefit of Big Data technologies. Providing to the customer real time visibility on the delivery process has been shown to improve the brand reputation and gain loyalty (Ray Y. Zhong, 2015; DHL, 2013). Big Data is a new way to make the goods and the delivery services tangible. ISLI KEDGE Business School White Paper Planning The Future SCM Together 10

A. 3D Printers 3D printers will, as many of new technologies, integrate, in few years, the Supply Chain of tomorrow. It will bring more flexibility and agility that we absolutely need to keep at a good level if we want to stay competitive and to have a maximum of the market share. For the moment, most advanced of these technologies concern plastic printing but metallic and other materials of printing are growing quickly. 3D printers approach by technology Technology of 3D printing consists in depositing several successive layers of materials to create a printed volume product. This production is permitted thanks to a digital file of a computer-aided. Nowadays, plastics printings are the most common usage we can meet but Metal powder could also be treated with a laser beam to turn it into a stream of material. The technology also permits to avoid waste of material during production because it is not a subtractive method as common methods of production. It also offers a lot of possibilities for customization and short-run production the cost of entry into markets. Products could easily be produced in limited quantities with a rapid prototype (Ken Cottrill, 2011). 3D printers &benefits As we underline before, additive printing, rather than subtractive, allows material waste kept at a minimum, but we also can be produced without assembly operations. That is a main competitive point of this new technology, and then costs of production could decrease significantly. ISLI KEDGE Business School White Paper Planning The Future SCM Together 11

The manufacturing process is fast to set up, and infinitely customizable. Another benefit we can find is that we can significantly reduce the need for buffer inventory of finished or semifinished goods. Then, professionals do also agree on this point: the technology allows a high degree of recycling; the material can simply be re-used in the manufacturing process if it presents for example a quality issue (Henrik J. Nyman and Peter Sarlin, 2014). Existing situation and Forecasting evolution 3D printers could be considered as Digital industrial revolution It s now an obvious postulate to think that 3D printers will really impact multiple industries, including construction, education, energy, government, medical, military, retail, telecommunications, transportation, and utilities. On the one hand, this ability to manufacture according to a specific set of digital instructions means that products can be constructed at will and with a much larger degree of customization. On the other hand, it also brings increased technical complexity and data demand. «Many digital-age inventions would be meaningless without the contribution of intelligible data, and 3D printing is no exception» (Aleksandr Peterson, 2015) 1. Data Enables Custom Manufacturing 2. Data Feeds Quality Assurance 3. 3D Printing and Data Visualization 4. Printing Data Storage Furthermore, according to Gartner, American enterprise of Research and Consulting for advanced techniques, 3D printers represent a continuously growing market which certainly will reach 13, 4 thousand millions of dollars in 2018. The market is growing quickly and consequently. If production of 3D printers is evaluating with a good tendency, different kind of 3D printers still are and will be proposed to different kind of clients (professionals and also final client). ISLI KEDGE Business School White Paper Planning The Future SCM Together 12

3D printers will be more available at reasonable prices and with performances which are becoming better and better. Considering some theories, we can imagine that this tool could permit to personalize a product from our home (as a final consumer). We will, for instance, supply a specific product in a particular shop (with very developed and functional 3D printers and we can after use our own 3D printer to personalize it, at home). From the impact of 3D printers on the Supply Chain to the Necessity of integration of these new technologies Some enterprises and groups (like Areva, Air France, Airbus, Aperam, LVMH, Picard Surgelé, Safran, Siemens, Vetoquinol & Yves Rocher) are already anticipating the impact of new technologies (and so 3D printers) on their supply chain configuration. Their SC Directors are invited to participate to some forum as «La SC au cœur des stratégie d'entreprise. Participer, influencer et créer des innovations de rupture grâce à la SC» (mainly organised by SC Magazine and Deloitte). Supply Chain and study of different key indicators could (and should!) lead the company s strategy in most of cases. Different directors must also be involved in the project to ensure they are together choosing the best implementation as possible. Processes of S&OP could be a good leverage to pilot activity and to stay competitive. We are still looking for new parts of market share and in including these new technologies to our SC configuration we can increase a lot our flexibility and our agility (Cathy Polge, 2014). Approach by New patterns for the SC 3D printers permit to create a product with only one file and some raw materials. Concept will create a rupture in the actual model of the SC because it allows no or less waste, not even Single Minute Exchange Died times, no or less transport costs, no customs duties and it decreases risks and time of delivery. ISLI KEDGE Business School White Paper Planning The Future SCM Together 13

Thanks to the worldwide web, conception could be everywhere and this idea is enforce because of possible and quick product «prototype» (the cycle of product development could easily be minimized and it s a new competitive advantage on which we have to be align on) The existing Supply Chain proposed until this moment to make design of product in the headquarters based on a demand coming from every continent. Then, the product is produced in low-costs area, mainly chosen for their labour prices, to be finally re-expedite all around the world. 3D printers included in the SC propose to do all these activities at the same place (conception, production close to the customer place). Main differences of a traditional supply chain versus a 3D printing supply chain are that traditional Supply Chain products are mass produced in low costs locations but with 3D, customized production is location independent. With the traditional SC, goods are pushed in the markets, leading to push strategies and in contrary (with long lead times from design to manufacturing to delivery), 3D goods are produced based on customer demand, very quickly. 3D permits low transportation costs and so on and so forth, low carbon footprint. (CKAB and ATOS) According to Roland Berger consultant s work on additive manufacturing (AM), we have to consider 3 points: - Costs of 3D printers in the Supply Chain should be considered but costs could be divided by two within the next 5 years if we can improve process stability, - We have to keep in mind that despite its strong growth, the AM market still remains small compared to the machine tool industry, - 3D printers allow a product weight reduction because we are moving from a traditional to an optimized design. (Roland Berger, 2013) Finally, Marc Ferrey, Director Supply Chain, Capgemini Consulting, underlines other points we also need to consider; how can we organize and anticipate sourcing of raw materials with 3D printers, how can we proceed considering intellectual propriety and last but not the least, how can or how should we compose with the entire company to increase results using this new technology (Marc Ferrey, 2014)? ISLI KEDGE Business School White Paper Planning The Future SCM Together 14

B. Drones How do drones can improve the speed and flexibility of the supply chain? To understand how, first of all we have to understand what is drone and where it can intervene in the supply chain? Drone also known as an unmanned aerial vehicle (UAV) is an aircraft without a human pilot on board. Its flight is controlled either autonomously by computers, or under the remote control of a pilot on the ground. Speaking about drones in supply chain we mostly speak about a semi-autonomous objet that can be used for different purposes, such as delivery, inventory control or collecting data. The idea came from Austria in 1849 when they attacked Italy with the flying balloons. Then drones were built during the 1st World War. The first was the Aerial Target, developed in 1916. Then the use of drones was very successful during the Vietnam war. They are used for the military missions, nuclear tests, and secret missions. In global conflicts is certainly controversial, the armies around the world are relying on drone technology to complete missions. Nowadays almost all countries own drones and they are usually used for medical purpose, policing and firefighting. Médecins Sans Frontières (MSF) used drones to deliver some testers to the hospital in Papua New Guinea. The possibility to use drones in isolated places is changing the procurement habits and the time delivery. In comparison with trucks and boats, drones permit the procurement process to be more reactive and flexible. ISLI KEDGE Business School White Paper Planning The Future SCM Together 15

Recently big e-commerce companies as Amazon or Google have invested a lot in R&D of potential drone technology, to find the way how to use drones for the last kilometer deliveries (Sam Phipps, 2014; Noel Young, 2015). This can improve the perfect order fulfillment and deliver cycle time. Reliability and Responsiveness are improved. The delivery performance to customer commit date to deliver stock products will be better managed. Amazon Air Prime (tests In India), Google Project Wing (tests In Australia) The latest commercial models can carry lightweight packages such as medical supplies, books and food, straight to the waiting hands of the end-user. The goods are usually boxed and securely attached via straps, or limbs, under the drone s rotors. Chinese company Alibaba was one of the first who launched drones delivery (Jason Reagau, 2015). InCake began drone deliveries of cakes in 2013. SF express also tested delivery UAVs the same year and sent parcels to remote areas of China. Drones intervene in the following processes: Pack product cycle time and the ship product cycle time. In other countries we can also find examples of companies launching into the delivery business. In Germany, drones are used to make medicine deliveries to remote islands. An Indian restaurant, following in the earlier footsteps of a Domino s PR stunt in the UK, successfully delivered a pizza with a drone last year in Mumbai. However, regulatory skies are hard to fly in China as in the U.S. China s military currently controls 80 percent of airspace, allotting only one-fifth for civilian use. Last week the Federal ISLI KEDGE Business School White Paper Planning The Future SCM Together 16

Aviation Authority (FAA) published its rules and regulations for the oversight of drone usage within the United States: Drones must be less than 55 lbs in weight and must be flown by a person who is at least 17 years old, passes a knowledge test and gets FAA certificate Can only fly during the day in good weather Must not fly close to airports Cannot fly faster than 100 miles an hour (161 km/h) And must be within visible site of the operator Anyway where else and how the drones are used nowadays? Asset monitoring: In agriculture, oil and gas, and mining. Drones provide the flexibility for activities such as survey work, monitoring of assets, determining crop growth, etc. In countries such as Australia, mining companies are already leaning heavily on the pilot-less aircrafts to assist with activity on the ground. By some estimates the usage can save close to 90% of the $2000 an hour cost for a helicopter. Remote delivery: Logistics firms such as DHL have been able to expand their reach via drones. The ability to connect remote German islands in the North Sea has enhanced the remote locations with a more regular delivery service. Of course these drones are clearly flying outside of site lines of the operator. Hardis, the company from Grenoble, asked for a patent for the system installed on the drone, for the purpose to automate the inventories and stock control inside the warehouse. The system will treat all the bar codes and even more, it will be able to recognize all the labels sticked by supplier, haulier or forwarding company. All the information gathered by this flying subject without pilot can be used by any WMS program. The use of the «inventory drone» will allow to make everyday inventories, even at night, offering the exact visibility of products at the warehouse (JLR, 2015). ISLI KEDGE Business School White Paper Planning The Future SCM Together 17

Drones are pretending to replace people for the job which is difficult to realize or the job which is not really wanted, so reducing labour cost is the real possibility for the future. For the inventory control drone can work at night to provide right figures in the morning. For the inventory management, it is very useful which permits the better asset management. Having the accurate information about the everyday inventory can improve the reliability and responsiveness for the delivery process. How else could the supply chain benefit from use of drones? For the moment the drones are small and can t transport heavy and volume products, but for the future we can imagine other types of drones such as Cargo drones, for example cargo planes and boats, unmanned, on autopilot or remote control, ready to deliver goods at a reduced cost. If smaller drones can be remotely controlled by pilots in a central command center, we can expect that larger unmanned vehicles could be controlled from thousands of miles away as well. Companies like Rolls Royce are already investing in this future, saying drone cargo ships would be more efficient, more enviro-friendly, and less expensive to operate than the massive freighters that carry most of the globe s cargo today. Envision a completely automated supply chain. Factories with robots manufacture goods that are automatically loaded into driverless trucks. These rigs will carry goods to ports where robotic cranes will stack containers on ships without crews. The entire chain of getting goods from store to door would be touched by only one human the customer making the initial purchase. Here are 5 ways that cargo drones will shape the future of big-load transport in the not-sodistant future: 1) Save Money According to Bloomberg, human crews make up almost 50% of the cost of operating a cargo ship. If automation can save that amount of money, we expect a major trend toward cargo drones to arrive soon. ISLI KEDGE Business School White Paper Planning The Future SCM Together 18

2) Eliminate Human Error In an idealized future of complete automation, robot-staffed factories will crank out goods loaded into tractor-trailers without drivers. These will transport shipping containers to ports where robot cranes will load them onto crew-less ships. The same process will reverse itself on the receiving end, where the entire supply chain could be set into motion by online impulse buys made by the only human connected to the whole process the consumer. 3) Keep Humans at Home Shipping companies can set up command centers to act as pilots of a vessel. Rolls-Royce, for instance, is setting up a virtual bridge of a ship, offering 360-degree views from a boat s bridge. Imagine captains in Kansas City commanding one of these massive vehicles with no water in sight! The military already uses pilot-less aircraft regularly. It s not crazy to think that unmanned cargo planes are around the corner. Unmanned cargo planes do not need costly life-support systems to keep cabins pressurized. Additionally, drones could increase safety as most crashes are caused by human errors. 4) Deliver Goods to Places We Wouldn t Normally Go Remote areas of the world, such as oceanic islands, Arctic regions, or troubled or remote areas of Africa, are often inaccessible due to poor communications and transportation networks to those locations. Simply put, it s either too dangerous or too costly to ship goods there regularly. Unmanned aircraft or seacraft can perform just fine in extreme conditions. 5) Monitor & Protect Transportation Lanes Companies, law enforcement agencies or safety organizations could use drones to monitor sea lanes. Early identification of potential pirates could keep cargo safe. An advanced Coast Guard drone could gather information, capture images, and give eyes in the sky all while saving money and time over sending out a human-led patrol. Companies could keep a watchful eye on wildlife (think migrating whales) and make adjustments for environmental concerns if needed. ISLI KEDGE Business School White Paper Planning The Future SCM Together 19

Conclusion Admittedly, a completely automated supply-chain, led by cargo drones, has many hurdles to overcome. Unions, safety concerns, lack of centralized computer networks and platforms, to name a few. When the paths are cleared for drones and mass transport, however, the implications are enormous. ISLI KEDGE Business School White Paper Planning The Future SCM Together 20

Executive Insights We asked several questions to executive in the field of New Technologies and its implementations in real life. World is now turbulent and is characterized by VUCA, an acronym to reflect the current Volatility, Uncertainty, Complexity and Ambiguity that affect the world. We need to anticipate and being agile. As such Supply Chain problem evolved a lot and became exponentially complex, since we want to optimize worldwide networks. Big Data analytics can help to handle those complexities, but if we want to implement Big Data solutions to improve the Supply Chain it requires more than figures. Before the quality of the data we collect, the critical priority is to gather the people to merge the Supply Chain field knowledge. Then we can focus around the product: what makes added value for the client? Here Big Data helps to catch in real time the customer s desires and leads us in the Supply Chain design; it is also a great opportunity to improve our relationships with real time delivery information. Changing the Supply Chain design requires to know the operations, we need experts, managers and workers to make it happen. Finally implementing Big Data in Supply Chain requires passion, we need to feel if the new information system can serve and improve our model. This is exploration; there is a lot to create. Passion becomes an invaluable asset to find new ideas and new horizons for the future of Supply Chain, to keep going further. Preparing the future now is educational, allowing hybrid talents to emerge: half statistician and half marketing, IT and Supply Chain experts or software developer and sociologist. Be inspired by start-ups systems to solve nation s public issues, as they play in the same complexity league now. Change your company culture towards Big Data exploration, trying and failing with agility leads to competitive advantage, don t be afraid. The market nowadays is less forgiving, there is a risk a competitor s new finding becomes the new barrier to entry, in a few month timespan. Today is the perfect day to rethink corporate innovation; it should be disruptive and radical. ISLI KEDGE Business School White Paper Planning The Future SCM Together 21

A. Marc FERREY, Principal, CAPGEMINI Consulting «3D printing has the potential to do more than increasing agility & flexibility of supply chain. It should be a masterpiece of a totally new Supply chain: Parts can be manufactured everywhere in the world were a 3D printer is set (provided that this printer has the right capabilities in terms of material, size, technology). When the 3D model is ready, you email it anywhere in the world and manufacturing start instantaneously Economic batch quantity is dead. Producing parts in small series or in very large series is not a constraint anymore. The unit price is the same: - You need 1 part, you print it - You need 1000 parts your print them the same way Traditional distribution models are to be reset as shipping the printer ( raw material) becomes the first key question in setting the access to customer on local markets The traditional product catalogue is not static anymore. Adding and removing items is now a question of creating 3Dmodels and storing them in the proper database But beyond this, tomorrow 3D printers champions will be the ones who makes the agility the true competitive advantage: I go printing where the market is. The full potential of 3D Printing is maybe not discovered yet. But let s consider the potentialities which are really new with this technology: New shapes can be created (compared to traditional shapes obtained my removing materials). Mechanisms & complex parts can be built in 1, 2 or 3 manufacturing steps Industrializing a unique item or a small series cost as many as a industrializing a millionunit production The economic model relies not on owning a stock anymore, but on owning printers and setting capability to create the 3D-Models ISLI KEDGE Business School White Paper Planning The Future SCM Together 22

Therefore the Supply chain manager should question himself and his company strategy regarding these axes. He should build first answer to following questions: What does 3D printing allow me to do now that I could not do yesterday? - Enlarge my catalogue with new products? - Propose full customization of a part of this catalogue? (depending on customer wishes, on regions, on weather, public or local events) What does 3D printing allow me to do smarter? - Simplify production steps? - Reduce drastically manufacturing & distribution lead-time, resulting in an incredible flexibility capability - Master my costs - Manufacture closer to my customer And finally, what if these changes enable the building of a new business model? - Propose new services to my customer (e.g. spare parts for my products, for my competitors products ) - Manufacturing in real time, or close to be - Leverage a totally new industrial footprint, possibly with innovative solutions (share 3D printers with other companies, rent hours of printing ) - Set an economic model free of most of inventory cost The supply chain manager should cross these answers with the knowledge of the market. He should then be able to decide, in a highly strategic decision, which are the key moves that will maintain his company as competitive as possible.» ISLI KEDGE Business School White Paper Planning The Future SCM Together 23

B. François ROCHET, Associate, DIAGMA «Drone (flying object) in supply chain will become an element of a long robotisation project with services more and more extended. Mostly the use of drones will be needed for the three following factors: Delivery time reduction Cost reduction Capturing of the big amount of information ( Big Data supply) Drones fit in the global context of society robotization. Sensors and the automation permit to foresee for the near future (5-10 years) more and more autonomous systems. We can imagine such projects as autonomous cars or planes. And mostly it s not the technology who stops but the psychological factors (Are you ready to fly by plane without a pilot?! Nevertheless in the Middle East drones are piloted by the machines from the United States). The internal use of drones is widely discussed today. Control or monitoring of different big areas for different purposes and in different cases can be one of interesting issues. We can also mention : Optimisation of trajectory Meteo Military missions Rescue Intervention in remote and polluted zones... The primary problem is the legislative order. The multiplied number of privately owned drones and flights above sensible sites (nuclear central station, military sites, Paris...) is rising. Legislative proceedings become tough, in this situation two solutions are possible: First, the legislator closes all the possibilities to fly Second, we can work with professionals the possibility to use drones in determined areas: Homologated companies (air companies) Homologated machines ( With ILS, transpondeurs...) ISLI KEDGE Business School White Paper Planning The Future SCM Together 24

Zones of determined flights Each country will have to pronounce its choice, let s hope that French legislatives will open the perspectives for drones.» ISLI KEDGE Business School White Paper Planning The Future SCM Together 25

Opportunities Big Data is a disruptive technology, allowing rethinking Supply Chain in the next 5 years. Because it allows to work with both structured (classic database) and unstructured data (audio, video, social network, etc.), it is considered to be a fusion tool. As such it gives new insights on Supply Chain, creating new KPI and opportunities. The Internet of Things (IoT) consists in self-feeding database, where the objects communicate with each other. If we think of conveyors belts and automatic bar code scanners we can see in warehouses, objects already communicate to a certain extend. The main difference will be the broad scope of those automated interactions, creating their own networks among the Supply Chain. The merging of Big Data analytical capabilities and the IoT will generate tremendous amount of new data, allowing to access lots of previously unsuspected information. Thus, the Supply Chain work is going to change with big data s influence. As the technology will become more users friendly and self-capable with machine learning, the priorities wouldn t be about acquiring and finding data analysis strategy anymore. The future of Big Data will move from the data scientists to the actual Supply Chain expert s knowledge to guide the systems to answer the Supply Chain strategic questions. To answer the supply chain strategic questions drones are useful today and will be useful in the near future, for example in inventory management. This technology should be developed more for the internal use. We can imagine drones collecting huge amount of information, big data, which then is used for different purposes in management of the inventory or deliveries. The use of Drones will be able to create 100000 jobs by 2025 and add $82 billion to the economy. In China within the next 5 years logistics companies will be able to deliver 12 million packages daily with figures expected to increase to 200 million by 2025. There are many investments which will be done more in the near future. For the future 5 years we can mostly see the technical development of drones, they will become more and more robust to deliver the heavier loads. The only constraint for the future development is the security rules, which will block the use of drones in urban zones. ISLI KEDGE Business School White Paper Planning The Future SCM Together 26

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