Many organizations talk about a consumer-centric supply chain, but only a few of them make it a reality. In traditional models, the supply chain is usually a one-way, linear path from a large-scale manufacturer to the retailer. The emphasis is on the mass production of goods and the speed at which they can reach shelves. Few, if any, members of the chain have reason to consider the consumer.

On the other hand, in a modern supply value network, the path to purchase is not a sequential chain, but an interconnected web. The consumer is at the center, and every other aspect of the ecosystem is connected to him or her.

In shifting to this new model, businesses must completely rethink how to meet consumer demand within the supply value network. For example, inventory may not necessarily need to be managed in traditional warehouses. Instead, organizations may want to diversify their assets so that they can support a variety of sales channels and delivery models. There is no longer a one-size-fits all approach. There are many different types of consumers to reach, and the supply value network should reflect that.

At the same time, organizations need to optimize their business operations. They must ensure the business remains profitable, even as the demand for personalization, speed, and direct access grows.

The power of data – and of people

Consumer product organizations have long relied on biographical and transactional data to help segment consumers and predict demand. However, advances in intelligent automation also allow them to incorporate contextual data, which includes any combination of external factors that may inadvertently affect sales, such as weather, traffic, holidays, or tourism.

Developing this capability depends on the ability of the organization to bring data to the center of each business function. Companies must be more deliberate in organizing the business in a way that embraces data-enabled technology. For example, if a consumer wants to customize a product, the organization will need to be able to service that preference across the supply chain. This is a completely new way of working, and it can be executed only if the organization thinks about data and technology holistically.

While technology is a critical underpinning of supply chain modernization, we cannot underestimate the human element of transformation. Shifting to a supply value network model requires the organization to change its skills, culture, and mindset. These elements are, at best, underestimated, if not outright overlooked – and yet addressing them is the only way consumer product businesses will survive and maintain a competitive advantage. People are as much a part of that equation as the technology itself.

Supply value network solutions

While organizations traditionally looked for end-to-end visibility in the supply chain, today’s environment requires a 360-degree view across the supply value network. At Capgemini, we provide consumer product organizations with some key elements to help enable their supply chains:

• Strategy and operating model – for many consumer product organizations, putting the consumer at the center of the digitally-enabled supply network will require a complete overhaul of both the business strategy and operating model. Further, organizations will need to assess how this new way of working will impact other aspects of the business, as well as their relationships with every member of the supply value network.
• Connected autonomous planning – organizations should consider moving to an environment where planning of manufacturing, transport, procurement, and virtually every other aspect of the supply value network is completed in a touchless, autonomous way. This system, which is enabled by data-driven intelligent automation applications, helps optimize each function across the ecosystem. While humans maintain oversight of this system, tedious and recurring tasks are handled entirely by machines, which frees the workforce to focus on higher-value tasks, such as customer service or sales.
• Connected manufacturing – in today’s digital world, organizations must ensure that they have near real-time visibility into production lines, and that every element related to them is enabled through the cloud. Working this way will help unlock operational efficiencies, such as maintenance timing or workforce planning, as well as the ability to cut costs through more precise demand forecasting or inventory awareness capabilities.
• Connected control tower – the most crucial aspect of modernizing the supply chain is enabling a 360-degree view of the supply value network, including internal operations and external variables. This forward-looking function is both predictive and proactive – helping the organization anticipate issues and opportunities, while also generating ways to respond to them.

It’s an approach that provides the six pillars we have identified as necessary to support an intelligent supply chain.

• The six pillars of the independent supply chain:
  1. Intelligent network design and risk management
  2. Smart forecasting and integrated business planning
  3. 360° sourcing analysis and supplier collaboration
  4. Touchless and agile order to delivery
  5. Supply chain as a service
  6. Supply chain control tower and end-to-end performance management

Evolution towards a supply value network

As consumer product organizations reinvent the traditional supply chain as a networked ecosystem, it is worth remembering what an ecosystem is. As in nature, the supply value network is complex and connected; responsive and adaptive; evolving and ongoing. It is also potentially fragile – requiring a delicate balance between serving the needs of the consumer, engaging the right third-parties to deliver, and maintaining profitability.

For this reason, the modern consumer product company is much more than its core business. It is an orchestrator, overseeing multiple channels, interconnected supply systems, and a deep and varied network of partners. In embracing this new role, organizations might come to think of the creation of a supply value network not as the end of the supply chain, but as its latest evolution.

Innovation Nation: Hello Luis, Sreekanth. Thank you for joining me to talk how Capgemini’s technology partnerships with Ivalua and Kinaxis drive value into our clients’ supply chain operations. Luis, let’s start with you. What role does Ivalua play in helping our clients implement intelligent supply chain operations?

Luis Rios: Ivalua is a market-leading provider of cloud-based spend management solutions, and provides a single platform where businesses can address all their spending and transformation needs.

Ivalua empowers organizations to transform faster and achieve quick wins, through supporting spend and supplier management in ways that businesses can build from the ground up. In the face of increasingly complex marketplaces, controlling spend during supply chain transformations is critical, as many organizations are currently looking for ways to improve profitability, and give their employees the consumer-like purchasing experience they expect. Therefore, how companies allocate spending and resources can transform their businesses quickly and easily – enabling them to thrive, despite the challenges in the market today.

Capgemini has been one of Ivalua’s main partners for over 20 years. This means that we have experts with extensive experience in implementing intelligent supply chains and procurement solutions across a variety of industries, without any of the business disruptions that come with this.

How is Ivalua enabling our clients to efficiently manage their supplier relationships and expand?

Luis Rios: Recognized by the analysts as a leader in its field, Ivalua brings all spend under management a single, comprehensive source-to-pay platform. This gives organizations more rapid time-to-value capabilities and flexibility – enabling them to turn small projects into big ones through the additional modules and packages Ivalua offers.

Ivalua also provides rapid supplier enablement, which enables businesses to offer modern, unified user experiences to their customers with quick returns of investment. All this ensures Ivalua’s partners remain agile enough to handle any unique market requirements – resulting in some of the highest levels of supply enablement in the industry.

Finally, how does Ivalua engage our suppliers and drive better insights to help our clients make better, faster decisions?

Luis Rios: One of the key advantages of Ivalua’s source-to-pay solution is its ability to provide a 360-view of all supplier information and activity, which gives business complete control and visibility into their entire relationship lifecycle with any supplier. This helps better inform processes, addresses issues and risk quickly, drives innovation, and enables businesses to access quality data at speed.

From onboarding to registering on its portal for free, Ivalua provides organizations with the relevant qualifications, certifications, financials they need to better manage or engage with potential suppliers. This takes the guesswork out of choosing suppliers at this critical time in the market – enabling companies to choose the suppliers that suit their needs, while keeping supply chain technology front-and-center at every stage of the procurement process.

Sreekanth, now over to you and Kinaxis. How does Kinaxis drive intelligent supply chain operations for our clients?

Sreekanth Patcha: Kinaxis is a market-leading planning tool that provides crucial global supply chain information, all in one place. This gives organizations end-to-end visibility into their supply chains in real time, helping them to make informed, data-driven decisions that drives significant time and cost savings. This really enable organizations to “Know Sooner, Act Faster.”

Capgemini and Kinaxis’ relationship started over five years ago. In this role, Capgemini partnered with Kinaxis to broaden the solution offering by including complementary process and data integration technology elements. This approach enables Capgemini and Kinaxis to go to market together along with their core products and extensions.

How does Kinaxis combine human intelligence and technology to produce tangible value for our clients?

Sreekanth Patcha: Kinaxis revolutionizes supply chain operations for organizations by delivering the agility needed to make quick decisions in today’s fast-paced market. It combines human intelligence with AI, and its unique concurrent planning technique so that businesses can focus more on business-critical tasks – with minimal effort on their part. Kinaxis also provides easy collaboration between different experts in the process and so enables all the relevant human intelligence inputs into the process.

As a recognized Leader by Gartner over the last seven years, Kinaxis can get any organization’s intelligent supply chain operations up-and-running with advanced planning in as little as 12 weeks with proven results that truly make the supply chain frictionless.

Finally, how does Kinaxis engage our suppliers and drive better insights to help our clients make better, faster decisions?

Sreekanth Patcha: Like Capgemini, Kinaxis sees the value in helping organizations transition to the Frictionless Enterprise, as this eliminates redundancies and cultivates trust by giving businesses end-to-end visibility and transparency across their supply chain network.

In addition, Kinaxis helps build up resiliency before the next big, inevitable market disruption, while enabling organizations to seize any opportunity, as it also offers them the agility they need to adapt to any circumstance at any time.

Finally, Kinaxis leverages AI, machine learning, and prescriptive automation to maximize efficiency – ensuring every resource and employee is focusing on business-critical tasks that will increase revenue and effectiveness, 24/7.

In short, Kinaxis and Capgemini’s joint efforts towards building any business into a Frictionless Enterprise enables departments and team to work to better more efficiently and effectively, leading to better insights and decision making across the board.

Luis, Sreekanth, thank you both so much. It’s been a very insightful conversation.

As has already been written, there are six main pillars that support a smart, efficient, flexible, and customer-focused supply chain.

One of those pillars is intelligent network and operations design and risk management. This entails segmenting end-markets and channels, differentiating service offerings, and designing intelligent supply chain networks (including locations, inventories, and flows) across the product life cycle, while monitoring systemic risks over time.

• The six pillars of the independent supply chain:
  1. Intelligent network design and risk management
  2. Smart forecasting and integrated business planning
  3. 360° sourcing analysis and supplier collaboration
  4. Touchless and agile order to delivery
  5. Supply chain as a service
  6. Supply chain control tower and end-to-end performance management.

The aim is to create an intelligent design that doesn’t just achieve a balance between resilience and performance, but that also delivers on sustainability – which is as important a business imperative as any other.

Improving sustainability performance

How can organizations improve their sustainability performance? There are three main ways.

The first requires transformation of the network design. It’s all pretty obvious, really – but that doesn’t make it any less necessary. We’re talking here about reducing transportation distance, frequency, and risks, and selecting the most appropriate transportation mode. It also means making the best possible use of transportation and warehousing assets, while minimizing their environmental footprint – for example, green and shared warehouses.

The second one focuses on the last mile. Changes might include multi-modal delivery solutions in urban environments, and partnering with sustainable last-mile delivery players. An efficient collect-and-reverse flow will also enable end-of-life treatment and refurbishment for products, which is yet another good thing.

The third main way in which organizations can improve their sustainability performance concerns the improvement of end-to-end planning and orchestration. When visibility is improved throughout the supply chain, organizations can optimize resource consumption, waste, and stock levels.

This is particularly important in the food industry, where nearly one-third of all the food produced in the world is never eaten. Indeed, most industry segments share this same pattern: too much waste, not enough re-usage and re-cycling.
Advanced analytics, combined with data sharing through digital platforms, and including customers, suppliers, and subcontractors, can help organizations limit the impact of their waste along the chain.

Transparency and traceability

Let’s look in more detail at the visibility issue, and in particular at transparency and traceability.

I said earlier that sustainability is as important a business issue as any other, and transparency plays a big part in it. According to NielsenIQ, 73% of consumers are willing to pay more for a product that offers complete transparency. People want to know where things come from, because there is a growing awareness that there are different ways in which we can all improve on the CO2 footprint.

Transparency in this respect means supply chain intensive corporations need to measure their footprint – either with appropriate tools, or the support of a partner – and to do so continuously, not just a few times a year. This, in turn, means businesses need to make the products and materials in their supply chains traceable.

It provides tangible proof of sustainability claims, and it also supports a more agile and efficient supply chain – including suppliers upstream – with lower levels of waste and resource consumption.

There are four main challenges to overcome when implementing a traceability program:

• Tracing back through the initial raw materials channel and collecting information on origin, composition, manufacturing process and flow at each step of the value chain
• Ensuring the collection of data, its authenticity and consistency, while guaranteeing suppliers’ independence and data protection when setting up a connectivity platform
• In a large ecosystem, collecting sustainability proofs and guarantees and making them transparent to customers with an end-to-end data platform
• Reconciling available data in a clean way, even if it comes from poorly managed or non-harmonized databases.

Sharing best practice in sustainability

How are those desired sustainability improvements to be achieved, and how can these traceability challenges be addressed?

Collaboration with a committed partner can be a big part of it. For instance, here at Capgemini, we have a dual ambition: to become carbon neutral by 2025 and net zero by 2030, and to help clients save 10 million tons of CO2 by 2030, including making supply chains more sustainable.

When they work with us, the operations of client organizations benefit by the back door, as it were, from our own sustainability efforts. Incidentally, the same principle can be applied to the whole supply chain ecosystem. Some potential partners will have their own commitments to the green agenda – for example, those who provide more sustainable warehouse or transportation operations – and choosing to work with them will add impetus to the organization’s own environmental momentum.

Another big part of it is sharing and understanding both best practice and the latest thinking. Capgemini recently launched Climate Circles, in which business leaders come together to redefine what it means to be a responsible business, and in particular, to share ideas on sustainability transformation for positive change,

Leaders were presented with two choices for discussion:

• The race to net-zero – key topics around the global climate emergency, fore fronting the science and facts around climate change. The discussion focused on each person’s own beliefs about climate change to lay the groundwork for a review on the role of businesses in this equation
• Breakthrough and innovation for a sustainable future – the role of industry in the face of climate change, focusing on technology and innovative solutions to address the global climate crisis. There was an evaluation of Capgemini’s business capabilities to understand how it can enable global development for a sustainable future

It’s not just about what organizations can learn about themselves. It’s also about us, here at Capgemini, learning about how we can help.

Our aim as a business is to bring together a range of assets and experience in optimizing supply chain networks that can help our clients realize their performance, new business opportunity, and sustainability goals. For instance, we’ve helped businesses achieve a 15% decrease in the CO2 footprint of the entire value chain.

Supply chains are important not just for businesses, but for the people they serve – and for the planet we all share.

The article that leads this series of articles identifies the six main pillars necessary for a smart, efficient, flexible, and customer-focused supply chain. One of those pillars is 360° sourcing analysis and supplier collaboration, and that’s the area we’ll address here.

• The six pillars of the intelligent supply chain:
  1. Intelligent network design and risk management
  2. Smart forecasting and integrated business planning
  3. 360° sourcing analysis and supplier collaboration
  4. Touchless and agile order to delivery
  5. Supply chain as a service
  6. Supply chain control tower and end-to-end performance management.

Procurement is evolving more rapidly than ever before. The challenges around supply chains, risk managing including sustainability, technology advancement in areas such as artificial intelligence, and the inability of procurement in many organizations to react to changing business environments, is seeing this pace accelerate.

As part of this, strong supplier collaboration is becoming key to driving an effective supply chain that enables 360° visibility both internally and externally.

Sourcing analysis…

For many organizations, procurement remains focused on a small number of criteria to make sourcing decisions. For a given specification, price is the determining factor – sometimes total cost of ownership (TCO) and rarely return on investment (ROI). For items where short lead times are important, delivery dates may be taken into account. But many miss the tools or data to make decisions beyond these few factors.

Let’s look at the data required to undertake further analysis within the purchasing process:

• For supplier performance, we need to look at past data such as delivery times, returns, and failure rates
• For risk, we should look at sustainability and diversity measure metrics, financial risk, and social indicators for areas such as modern slavery.

But it is impossible for organizations to track this data against every one of their suppliers. Right?

Take supplier performance. Most organizations have much of this data available to them, be it invoice data, purchasing data, delivery dates, refunds, and credits. If they have a procurement lifecycle management (PLM) system in place, or MRO (maintenance, repair, and operations), they might even have data to link this to their production systems to understand the impact on production failures. Creating predictive models from this data and feeding this information back to the organization’s procurement system will ensure this data is available for sourcing decisions.

For risk management, there are terabytes of data available in the public domain, not to mention the myriad of private services that can be leveraged. While mining this is beyond most organizations, there are many services that can provide this service across the supplier base.

There are also sourcing platforms that will analyze spend data and automate the supplier selection process based on an organization’s own supplier base, together with their own supplier performance data and external risk management factors based on the criteria defined for sourcing. Intelligent online searches can aggregate information to build a detailed picture of the supplier landscape, bringing together analyst reports, other third-party assessments, media coverage, social media comments, and more.

From this analysis, conducted in the open market, organizations will develop a better understanding of their current and potential future suppliers, and their resilience, performance, and sustainability.

But it doesn’t need to be an all or nothing approach. While organizations work towards getting their data perfect, incremental improvements in visibility will drive much better sourcing decisions and improve supply chain resiliency.

… and supplier collaboration

Comprehensive analysis of the kind we’ve just summarized enables organizations to be confident in the suppliers from whom they source products, materials, and services.

Which, of course, is highly desirable. But all of this is largely a tactical benefit. What a thorough analysis can also provide is an understanding not just of practicalities, but of character. The better a business truly knows its suppliers, the better it will be able to form lasting and productive relationships with them. Collaboration of this kind goes beyond tactical gains to deliver genuine strategic advantage.

When organizations and their suppliers know and trust one another well enough, the boundaries between them can become fluid. They can share responsibilities in order to achieve outcomes in planning, in quality, and in delivery that benefit all parties.

The collaboration can go further still. Supplier input can lead to positive changes in product design that organizations may not otherwise have been able to envisage.

When relationships reach this level, they’ve left the basics of fulfilment far behind. They’ve become genuinely innovative – so much so that perhaps the term intelligent supply chain doesn’t do them full justice.

Innovation and intelligence

It’s time, perhaps, to recognize that supply chain innovation needs to – more than ever – include procurement. Rather than being reactive, it needs to be more intelligent – and even creative – to be able to add more value to the organization.

Touchless and agile order-to-delivery is one of the six pillars that underpin the intelligent supply chain. Everyone remotely linked to supply chain management understands how important this can be. Every “touch” you remove adds more accuracy and speed to the process.

• The six pillars of the independent supply chain:
  1. Intelligent network design and risk management
  2. Smart forecasting and integrated business planning
  3. 360° sourcing analysis and supplier collaboration
  4. Touchless and agile order to delivery
  5. Supply chain as a service
  6. Supply chain control tower and end-to-end performance management

In fact, in the last couple of years, the word “touchless” has become the most used adjective to describe a supply chain. The only other word that comes close to competing with it is that other word in our pillar descriptor – “agile.”

The agility of a supply chain is complicated: it depends on multiple factors cutting across internal and external functions, which everybody understands. By contrast, though, isn’t touchlessness supposed to be a simple goal to achieve? That’s why I’d like to focus here on order management, where we see a lot of manual work and interventions.

In recent years, I’ve worked with client supply chain teams across multiple industries to make their order management touchless. In our first meetings, the general consensus was to implement electronic data interchange (EDI) and to develop and deploy robotic process automation (RPA) platforms as a shortcut solution to achieve “touchless” order management.

I wish the answer were this simple – but even after making these changes, the desired result for our clients was not achieved. And no, it wasn’t because the implementation was poor, either.

Where does touch happen…?

To gain a better understanding, we need to go a little deeper into this topic. At what stages typically does “touch” happen in order management?

The first stage is order entry. Orders are created manually: they are received from customers in an unstructured email, or in purchase order copies, or by phone or fax (yes, fax is still not obsolete). Any errors or corrections in these sales orders as notified by EDI or by RPA routines are also fixed manually – adjustments to replenishment orders, for example.

The next stage is stock allocation. Quantities are confirmed manually in the system before outbound deliveries are handed over to the warehouse for dispatch, and allocated stock is adjusted based on channel and customer priorities.

The third stage of manual intervention is outbound delivery. Adjustments sometimes need to be made in confirmed quantities due to stock constraints, wrong batch selections, and limited availability of credit, for example.

… and why?

But what are the root causes of “touches” – even though tools, systems, and automation are already in place?

• Missing automated processes and/or systems – especially those that capture customer orders and stock allocation. As a result, purchase order copies are processed manually by an operator to make a sales order in the system. There is often also a lack of integration between CRM and ERP systems, as a result of which orders are manually created. The list can be endless
• Master data issues – not having the right supply chain masters is one of the biggest culprits, which can cancel out attempts to achieve full touchless order management. Let’s say an organization has established EDI connections or implemented RPA for order entry, but the product mapping is not adequately maintained, resulting in exceptions rather than a sales order. Customers may send orders using an old SKU code which no longer exists, or which causes a price mismatch. If master data boundaries such as minimum order quantity (MOQ) and lot size are not set, what ought to be automated processes are liable to require manual intervention
• Ad hoc adjustments – when stock levels are limited, how do organizations allocate inventory to sales orders? If the available credit limit does not cover the entire sales order value, which SKUs can be trimmed? All these scenarios need managing with ad hoc adjustments rather than with clear rule sets.

Solving the problem – intelligent order management

We’ve seen that missing systems, master data management (MDM) issues, and a lack of business rules are among the root causes of manual interventions in order management. What can be done? Here are some steps to consider.

• Introduce tools and platforms to automate manual steps
  • Implement replenishment orders for your distributors based on stock norms. Give them a platform for confirmation with a defined tolerance
  • Implement EDI with customers wherever possible for direct integration for sales order entry in your system
  • Implement an automated stock allocation system.

• Fix MDM
  • Fix master data, remembering it’s not a one-time exercise but a continuous adjustment throughout the product life cycle.
  • Communicate changes in your product, promotions, price list, etc., to customers to avoid issues in automated sales order creation.

• Business-rule-driven operations
  • Define the sales order validation rules, and implement and automate them
  • Review and revise credit control policies regularly, rather than once or twice a year. A growing business frequently renders existing credit limits inadequate, and can block delivery
  • Define business rules for stock allocation. Find what suits your business needs: is it proportionate, or a fair share allocation if stock levels are constrained? Define prioritization based on channels and customers to avoid manual adjustments every time.

Order management is a living process. It requires constant monitoring to pre-empt and fix potential causes of touch.

At Capgemini, we assist organizations in their pursuit of “touchless” order management, helping them find root causes in the value chain, and introducing intelligent technology to fill the gaps.

Delivering rule based, automated order fulfilment process and quick turnaround for one of the world’s largest CPG companies

This consumer packaged goods company and global supply chain leader needed was running decentralized order management operations and warehouse-based order processing that was creating a number of challenges, including:

• A lack of standardized processes
• Significant manual intervention and processing
• A lack of information on non-allocation of stocks
• No capture of fill rates due to missing pristine orders
• No information flows on slow moving and non-moving stock

Capgemini deployed its propriety order management system to automate the process from order entry to out bound delivery, centralized the client’s entire operations, and created standard operating procedures to drive rule-based order validation and stock allocation.

This led to a range of business outcomes, including the elimination of incorrect order generation, priority allocation of stock over channels and for segmented customers within channels, increased warehouse efficiency, increased transparency on order vs. allocation and non-allocation, and a highly responsive and robust query handling process.

In turn, this unlocked enhanced business outcomes:

• 10% increase in order fill rate
• 7% increase in service level
• Increased speed to market
• Material availability raised from 50% to 90%.

For many years, multi-national enterprises have had to deal with disruptions caused by climatic, political, economic, and biological events; with regulatory changes; with sudden demand fluctuations; and with stockouts and high inventories. In recent years, though, they’ve been joined by other challenges. For instance, it’s a given that nowadays, customers are more connected, and they expect greater and more instantaneous choice, and a more personalized service offer.

What’s more, lockdown has altered buying behavior and hence sales channels. With the growth of direct-to-consumer channels and of subscription services, fulfilment models have often had to morph into something that is certainly new, and probably more complex. It has been disruption on a scale that has not been seen before.

If organizations are to meet and manage these challenges, they need fundamental and sustainable transformation – a shift to a supply chain planning model that is comprehensive, smart, and frictionless.

The characteristics of touchless planning

The defining principles of touchless supply chain planning include:

• Reducing manual touchpoints, and both reducing and improving individual decisions through advanced analytics, automation and business rules
• Using the system to create plans that are executable and optimized – enabled by complete and accurate data, optimized parameters, user needs at the center of the system design and set-up, and a focus on building user capabilities and understanding of the system
• End-to-end supply chain visibility, powered by predictive intelligence and digital twins (supply chain control tower and end-to-end performance management)
• A tiered organizational model with a well-defined, consolidated hub, and local responsibilities (supply chain as a service)
• Short planning cycles enabled by concurrent processes (smart forecasting and integrated business planning)
• An ecosystem of partners, with known and quantified capabilities to support and enhance the quality of plans generated.

• The six pillars of the independent supply chain:
  1. Intelligent network design and risk management
  2. Smart forecasting and integrated business planning
  3. 360° sourcing analysis and supplier collaboration
  4. Touchless and agile order to delivery
  5. Supply chain as a service
  6. Supply chain control tower and end-to-end performance management

Operational and customer benefits

A frictionless planning model with these characteristics provides competitive advantage. Operationally, it enables organizations to work seamlessly with multiple providers and partners at an optimum cost, and to make the most of the best resources on a global scale. Information and physical inventory flow seamlessly between them, and their interactions are augmented by artificial intelligence.

The workforce is digitally augmented too: the majority of processes can be run concurrently without manual touch points, leaving planners to focus on exceptions, where their own direct input adds most value . For example, they can take advantage of predictive analytics to identify and act upon risks and opportunities, harnessing data that can now be drawn from across the extended enterprise.

But that’s not all. While the operational benefits are both considerable and welcome, the real differentiator in touchless supply chain planning is the effect it can have on customer relationships. When processes are seamless, and when information drawn from across the supply chain is shared, interpreted, and actioned, organizations can work with their customers to create personalized experiences that meet their individual needs and expectations, and fulfilment models can flex around customer requirements to make things happen.

Traditional vs. frictionless

Frictionless planning models make it possible to work in a radically different way. Let’s make some comparisons.

Traditionally, processes are siloed, focus is mostly on the here-and-now and if things go wrong, the firefighting can be considerable. But with frictionless planning, most of the time-consuming processes are touchless and continuous, allowing the focus to switch to the medium to long term. Also, because data can be drawn from across the business, insights can deliver long-term value, and assist strategic decision-making.

In contrast to traditional approach, touchless planning is driven by an AI-augmented workforce, where the planning architecture takes charge of managing the end-to-end workflow, and where people are assigned to tasks not by transaction volumes, but by exception – because most, if not all, the heavy lifting is done in a touchless manner.

• The benefits of touchless supply chain planning aren’t just possible in theory – they’re already happening:
  • After transforming its supply chain model, a global CPG manufacturer achieved identified 40–50% of its product portfolio as candidates for touchless demand planning using machine learning forecasting
  • A European beverage manufacturer achieved 25–30% relative reduction in forecast error, 10–14% inventory reduction, and 20% planners’ time release from demand sensing
  • A global CPG enterprise achieved 72% no touch purchase order (NTPO) compliance from a starting point of 39%, by improving master data, planning system parameter tuning, and loss tree analysis
  • A global industrial leader had too many processes, systems, and long-lead times in responding to customer needs (over 8 months). The business carried too much inventory ($5 billion), which led to much waste through product obsolescence. The company saved 25% in inventory costs within the first year of adopting an integrated solution.

Deployment model

Now that we understand what touchless planning is, how do we deploy these capabilities across an extended enterprise?

What’s needed is a target operating model that can take advantage of the organization’s worldwide resources and capabilities, connecting them to achieve a truly frictionless process. It’s a model that has three building blocks.

• #1: Plan – a consolidated planning hub, built on an optimized and dynamic technology platform, can develop these plans from end to end, globally, and in a touchless manner
• #2: Connect – the next key part of the model is a team within the market that is focused on business partnering, collaboration with stakeholders to drive adoption, and incorporating feedback to improve the quality of plans create by the hub. Its members harness local and global knowledge and skills in order to create demand, to put plans into action, and to ensure there is flexibility in the response
• #3: Sustain – making a success of supply chain planning isn’t a one-time fix. The third building block is the creation and maintenance of a culture of innovation, to drive continuous improvement. This includes rapid proofs-of-concept to test new ideas, the development of collaborative ideas with industry and academia, a strong governance structure to manage innovations, and establishing a principle of innovation-as-a-service.

A frictionless approach to supply chain planning can make a competitive difference to major businesses – a difference that isn’t just real and immediate, but one that will also scale and flex to meet new challenges, including those we can’t yet even imagine. After all, this is the way it’s always been in the supply chain.

Throughout this series of articles, we’ve referred to the six pillars we’ve identified that underpin the intelligent supply chain.

• The six pillars of the independent supply chain:
  1. Intelligent network design and risk management
  2. Smart forecasting and integrated business planning
  3. 360° sourcing analysis and supplier collaboration
  4. Touchless and agile order to delivery
  5. Supply chain as a service
  6. Supply chain control tower and end-to-end performance management

Technology is integral to all these elements. Indeed, it’s present in just about every area of our lives. It’s effected changes in our ways of working that we couldn’t have imagined even a few years ago – and with the global pandemic, it has become even more important. In many instances, it was absolutely necessary to embed technology in all our processes to ensure business as usual.

Two broad process types

It’s important, though, to remember that it’s not all about the tech. The technology serves the process, and the process serves the organization and its customers. With supply chains, this principle is demonstrated by the building blocks necessary for effective operations, which are:

• Visibility – to make decisions in real time
• Agility – to manage deviations from planned outcomes
• Connectivity – across a widespread partner ecosystem of suppliers, customers, and service providers.

We can broadly categorize supply chain processes into:

• Enterprise-centric processes – to manage processes within the enterprise, be it planning, forecasting, or transaction management
• Ecosystem management processes – to manage interaction, communication, and collaboration with supply chain partners in the ecosystem.

While the positive impact of technological advances has created huge efficiencies in enterprise-centric processes, significant challenges remain in managing the ecosystem management processes.

This is because of distributed supply chain environments across the ecosystem partners, disparate standards used in processes and communication interfaces across the ecosystem, and multiple technologies used across the ecosystem, creating challenges in data collaboration.

Intelligent supply chain technology

The technology needed to address this challenge should be able to integrate varying data, process, and technology standards used in various nodes of the supply chain ecosystem.

While in the enterprise space, technology seeks to generate efficiency through process standardization and harmonization of data standards, the technology used in managing the supply chain ecosystem seeks to address the disparity in processes and data standards.

Specialist technology types used across the supply chain ecosystem comprise:

• Macro-services – monolithic applications such as an ERP, which streamline and digitalize not only supply chain operations, but also enterprise services
• Micro-services – smaller applications that deliver specialized functionality for individual operations such as order fulfillment or planning
• Nano-services – applications that tackle individual pain points within macro- or microservices functions, such as order validation.

My colleague Jörg Junghanns has written more on this topic in his article in this series.

“Value tech” tools

At Capgemini, we understand the very real challenges our clients face in managing their supply chain ecosystems to deliver visibility, agility, and connectivity.

Insights obtained over the years in managing supply chain processes for our clients in varied industries and geographies have enabled us to develop a portfolio of “value tech” products that seek to address this specific challenge of our clients. These act as a bridge between the supply chain ecosystem partners of our clients and their enterprise systems.

Our “value tech” tools deliver value by enabling efficient and frictionless process flow management and partner collaboration, and by providing process visibility. Since these are meant to address the specific challenge of disparities in the ecosystem, they do not need any significant change management efforts for deployment. They are designed to adapt to changes in the supply chain ecosystem such as additions of partners to the ecosystem, making it agile and scalable.

Areas in which we have developed value tech tools include:

End-to-end planning

• Demand baseline forecast generation tool – a sophisticated statistical modeling tool to run a “best fit” forecasting model
• Cloud-based demand planning collaboration tool

Fulfilment

• Sales order generation tool – converting client data in any format into ready input for the organization’s ERP system
• Stock norm generation – scientific stock norm generation for the organization’s replenishment orders
• Customer collaboration tool – web-based tool to collaborate on replenishment order generation
• Stock allocation tool – using defined business rules eg. proportionate, fair share, this tool can allocate constrained stocks to sales orders by defined channels or by customer priority
• Inter-company inventory planning tool – supply planning and collaboration tool for inter-company goods movement
• Return order management system – web-based platform for managing requests, approvals, and documentation for all types of returns.

Master data management

• Request management system – business workflow and ticketing solution
• Inspect +/- MDM data quality monitoring tool

Value from experience

All these tools were developed to fill the gaps in our clients’ technology landscape and to meet specific needs – and they’ve proved to be highly useful.

They are versatile and easy to install, and are the products of the insights we have gained managing the supply chain operations of our clients over the last 15 years. They have made our clients’ supply chains frictionless, predictable, intelligent, and agile in response to ever-changing scenarios.

The supply chain has always been an important function, but nowadays, it’s much more front and center.

There are several reasons for this. For a start, business is more global than ever, but relocations will still happen. In addition, its increasingly online nature has changed expectations – not just those that consumers have of brands and retailers, but those that companies have of their suppliers.

Then there are long-term factors, such as the implications of climate change, pandemics, and geo-political crises – and then there are market forces, including not just competition, which is a constant, but less expected influences such as the global pandemic.

The forces acting upon supply chain models can perhaps be summarized under four headers:

• Customer experience – post-Covid, the already rapid growth in online transactions has accelerated. More people expect products and services to be customized, and order fulfilment times to be shorter
• Global supply chain – global end-to-end models can comprise thousands of suppliers across all tiers and geographies, with widely varying stock replenishment cycles – all of which needs monitoring and managing
• Resilience – the pandemic and the war in Ukraine have shown how impactful supply chain disruptions can be, and highlighted the need to build resilience into the system
• Sustainability – most, if not all, major enterprises rightly have sustainability targets – and addressing the supply chain is one of the most important factors in reducing CO2 emissions.

How can supply chains be reshaped to address these new or growing challenges?

At Capgemini, we’ve identified what we believe are the six main pillars needed to develop an efficient, agile, resilient, and sustainable supply chain for augmented customer centricity. These pillars leverage assets across the Capgemini Group to drive business outcomes that include enhanced resilience, performance, customer centricity, and sustainability.

Intelligent network design and systemic risk management

This involves segmenting end-markets and channels, and differentiating service offerings and design intelligent supply chain networks (including locations, inventories, and flows) right through the product lifecycle, while monitoring systemic risks over time.

The aim is to create a supply chain network that balances resilience, performance, and sustainability all along the value chain.

Smart forecasting and integrated business planning

This means designing, building, and deploying intelligent forecasting and integrated business planning systems that can better anticipate customer demand, while optimizing services, stock levels, and enterprise performance management.

In this case, the aim is to achieve a sense of the enterprise-wide ecosystem, which can be used to improve granular forecast accuracy and constantly ensure relevant and consistent planning across all tiers of the business. In turn, this means they can better serve customers while improving company performance.

360° sourcing analysis and supplier collaboration

By designing, building, and deploying supplier scorecards – with resilience, performance, and sustainability as key metrics – and by also building collaborative platforms, overall supplier effectiveness can be constantly monitored and improved, from product design and sourcing all the way through to delivery.

Touchless and agile order to delivery

Organizations need to optimize their operations, while providing a seamless, rewarding, and efficient omnichannel customer experience, from order intake to product and services delivery, all along the product lifecycle.

They can do this by architecting and deploying and integrating best-of-breed   solutions and automation (RPA, IPA), from smart order management to agile warehousing and transportation – and by ensuring that supply chain functions are integrated from end to end.

Supply chain as a service

When everything is both integrated and visible, it’s easier to think of the strategy and the execution of supply chain operations as separate functions.

This means organizations can digitize and automate supply chain processes, and then outsource the operation to a trusted partner who can apply and maintain best practices.

In the meantime, they themselves can focus on higher levels of decision-making, as well as innovation and the occasional need for arbitration.

Supply chain control tower and end-to-end performance management

If organizations design, integrate and deploy cloud–based supply chain platforms, they can progressively provide end-to-end visibility, traceability, and advanced event monitoring capabilities, while deploying a consistent performance management system that addresses every participant in the supply chain.

Put these six pillars together, and work with a trusted partner that has relevant expertise in consulting, integration, operations, and data and cloud management, and you’ll have an intelligent supply chain that can flex to meet the needs of your organization – delivering new levels of resilience, performance, customer centricity, and sustainability to your customers.

Artificial intelligence (AI) is becoming more prevalent in our lives – both at work and at home. While many traditional job roles within organizations have already been automated, more sophisticated AI and machines are supplementing human intelligence and helping the human workforce to evolve their skills and roles.

One example of this is how AI can also be used to make our workforces more emotionally aware. Potential applications could include:

• What is the best new role for an individual based on their experience?
• How can we ensure the most efficient and slick retraining programs?
• How can we provide a more personalized experienced for our people and customers?

How do we make AI emotionally aware?

Given increasing customer demand for more meaningful and personalized experiences, we can easily see how customer and agent emotions could impact these experiences – considering not only what customers want, but also understanding how they feel in that moment and modify the customer journey based on their feelings.

When we provide a recommendation based on a customer query, we anticipate a set of feelings and thoughts that govern that behavior and the actions we take. And behind these actions are thousands of emotionally aware judgments we make.

Currently, there are two ways we can learn in AI:

• The first is using known outcomes to train a model that finds patterns and data trends to give the best result (method 1).
• The second involves observing our environment and making decisions accordingly. The outcomes of these decisions teach us how to make better decisions and so on (method 2). This is the way humans learn, and it’s this flexibility that enables us to respond to new stimuli and make new decisions.

If we use method 1, the AI agent doesn’t understand the emotion of the customer and act accordingly, but applies the emotional intelligence of previous human agents to a similar problem – and, therefore, isn’t emotionally aware. Even if we train the AI to recognize emotions such as anger or happiness, the machine learns our interpretations of these emotions based on our labeling of the emotions and not on the data it is receiving. If we use method 2, until the AI agent has had enough experience to have learnt effectively, it would be like talking to a child.

A better approach is to combine methods 1 and 2 – build an AI agent to use current outcomes and labeled examples, and then as more data is collected, allow the AI agent to learn new patterns on its own. The AI doesn’t need to know which responses are from angry people, it will associate all similar responses together and call it whatever it likes. The AI then offers bespoke solutions based on similar behavior within the profile, learns from the responses, and records feedback to improve the outcomes each time.

How is an emotionally aware AI engine better than what we have today?

AI brings universal benefits such as consistency, repeatability, and scale – but it also enables us to understand empirically the role of emotions in customer interactions.

We can quickly change the offer to the customer if they change their emotion mid correspondence, and we can try out completely novel solutions and observe the emotional response to them. We have built a flexible and stable agent that can handle complex customers and understand how they feel.

Going back to the impact of AI on the workplace, what does a human agent do when replaced by a non-human agent? They can either retrain to manage the AI, spend more time innovating solutions for the business, or be available if the customer wishes to speak to a human agent – all of which are higher-value activities.

Indeed, perhaps the most important part of an AI agent is the ability to know when to revert to a human agent based on how the correspondence is progressing. After all, if the context is highly emotional, people prefer to talk to a human agent.

As a closing thought, perhaps we are simply living through a transition period, which will end when we can no longer discriminate between AI and human agents?

Innovation Nation: Hello Sandip, Gaurav – thanks for joining me today. I’d like to start by asking you about the current state of the supply chain sector. What are the main challenges supply chain organizations are facing today?

Sandip Sharma: Thanks for having us. There are four main challenges that supply chain companies are having to deal with today – customer service, cost, resilience, and sustainability.

Customers now expect more personalized experiences and customized product services. This is putting pressure on supply chains to provide a unique, some would say, bespoke experience to their customers, which is driving up complexity and cost.

To counter this, supply chain leaders are looking for ways to lower costs, while remaining efficient, in order to stay competitive in today’s market. And with disruptions such as the recent global pandemic becoming more frequent, they need to deploy integrated planning and operations that drives a more resilient supply chain. This has now become critical if they want to increase transparency and hyper-personalization.

Gaurav Karker: On top of this, the adoption of new ways of working continues to be a big challenge and concern for supply chain leaders, and the future will see innovative solutions which are fit for purpose and can be easily adopted by organizations to drive value.

Further, supply chain leaders need to put sustainability front-and-center in their operations by consistently creating new sustainable solutions within a net-zero context that helps them adapt to market changes when they occur.

That’s very clear. How is Capgemini addressing these challenges?

Sandip Sharma: At Capgemini, we put touchless operations at the heart of everything we do in intelligent supply chain. This means we’re injecting more intelligent automation and artificial intelligence (AI) into these operations to deliver a truly frictionless way of working. This improves cost, efficiency, and our clients’ overall responsiveness to challenges as they occur. And by automating repetitive tasks, we give our clients the ability to focus on more business-critical tasks.

In addition, our Digital Global Enterprise Model (D-GEM) transformation platform enables us to deliver more efficient intelligent supply chain services to our clients by enabling them to choose the right technology, location, and services that work for their organization. We also answer the challenges posed by sustainability through our ability to deliver tangible sustainable business outcomes.

There is a need to rethink supply chain processes across plan, source, make, deliver and collect with sustainability as a goal. This could mean launching more sustainable products, making processes more efficient to reduce waste, and creating a dashboard to track progress against sustainability goals. All of this will ultimately result in reduction of carbon footprint, reduction of business waste, better logistics capacity utilization, and sustainable promotions.

Gaurav Karker: To add to this, leveraging our partnerships help our clients run their supply chains much more efficiently. These partnerships are based on expertise gained from working with some of the largest supply chains in the world, which enables us to bring industry best-practices and proven operating models into our clients’ way of working.

We also provide a set of tech solutions that breakdown silos and enable supply chain managers to see their supply chain operations from end to end. This provides a 360-degree data-informed view of their organization’s operations that helps them better plan how to distribute their products.

Finally, return on investment lies at the core of all our partnerships. We marry pain points to outcomes to ensure every problem our clients face is addressed – enabling these weaknesses to become strengths.

What solutions do you deploy to overcome these challenges and deliver frictionless, customer-centric, and intelligent supply chain operations?

Sandip Sharma: Our end-to-end Touchless Supply Chain Planning solution helps our clients generate more smart forecasting and better integrates business planning into their operations. While our Touchless Order Management and Logistics Control Tower solutions make the order-to-delivery process much easier and more efficient – underpinned by a Supply Chain as-a-Service (SCaaS) model.

In addition, our One Operations unlocks value across the enterprise by delivering end-to-end business integration at speed and scale, while our Cognitive Procurement Services solution helps you design, implement, and operate an AI-enabled procurement operating model.

We also handle supply chain data management in a unique way that guarantees data is kept to the highest quality possible and significantly increases the interoperability of this data.

What part does technology play in delivering touchless, data-driven supply chain operations?

Gaurav Karker: Technology plays a big role in driving frictionless supply chain operations. We leverage intelligent automation and AI into our clients’ supply chain operations to break down silos within their current setup. This can be truly achieved by moving to cloud-native solutions, leveraging platforms to run best-in-class supply chain operations, and using hyperscale automation to fill the whitespaces that cannot be addressed by standard platforms. In addition, it will be critical to harness the power of data through advanced analytics to drive automated decision making.

At Capgemini, our touchless supply chain approach has three layers. Human-out-of-the-Loop handles repetitive tasks, while Human-on-the-Loop handles higher supply chain tasks such as checking weekly planning processes. Finally, Human-in-the-Loop involves tasks where team members are needed to complete them such as handling investments.

We have expertise in both big tech and small tech to keep abreast of the latest and greatest technology solutions out there to fuel customer ‘s supply chain operations, addressing a given problem in the best possible way.

What outcomes does Capgemini’s intelligent supply chain approach deliver to our clients?

Sandip Sharma: We offer our clients a true outcomes-based approach to supply chain management by taking joint responsibility for achieving the business outcomes they need. There are four main outcome areas our intelligent supply chain approach covers:

• Service – improving fill rates, on-time-in-full performance, revenues, delivery lead times, and customer satisfaction (NPR) score across traditional and online channels
• Cost – reducing cost around inventory, operations, storage, transportation and business waste
• Cash – decreasing the amount of working capital investment by increasing efficiency
• Sustainability – minimizing CO₂ levels, reducing warehouse space, and generating more energy savings across our clients’ supply chains.

Finally, what do you see as the future of supply chain management?

Gaurav Karker: The focus on customer-centricity and hyper-personalization will grow, and supply chains will become truly frictionless – the days of supply chain silos are numbered. There will be greater focus on driving a more sustainable, net-zero approach to supply chain operations, which will transform supply chains to become more agile and adaptive.

Sandip Sharma: We will also see greater reliance on the AI-augmented workforce, with the human workforce only handling critical supply chain decisions – this will be critical to establishing and maintaining this more agile and adaptive supply chain.

Sandip, Gaurav, thank you both for taking the time to talk to us today.