Creating a Digital Supply Chain: Monsanto's Journey
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This presentation was delivered by Jim Kinnett, VP of Information Technology at Monsanto, at the 7th annual BCTIM Industry Conference.
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Creating a Digital Supply Chain: Monsanto's Journey
- 1. Creating a Digital Supply Chain: Monsanto’s Journey Jim Kinnett October 2015
- 2. Monsanto: A Sustainable Agriculture Company • Bringing a broad range of solutions to help nourish our growing world • Collaborating to help tackle some of the world’s biggest challenges • >20,000 employees in 67 countries • >50% employees based outside of the United States • Provider of seeds, traits and treatments on hundreds of millions of acres globally, serving farmers large and small • ~$15.8B Revenue and ~$8.5B gross profit (reported for fiscal 2014) • One of the 25 World’s Best Multinational Workplaces by Great Place to Work Institute
- 3. A History of Innovation DRooted in Chemistry Technology Transformed by Breeding & Genomics Positioned for Digital Agriculture Dr. William Knowles shared the Nobel prize in Chemistry in 2001 (with Ryoji Noyori) for his work at Monsanto on asymmetric hydrogenation reactions. + + Before 1996 1997-Today Future
- 4. Information-based digital farming: • Seeds • Weather and Water • Soil and fertilizer • Operation costAverageCornYield CornYieldPotential ~150 Average Bu/Acre ~300 Average Bu/Acre Produce More, Conserve More: On 1 Billion Acres
- 5. Beginners Conservatives Fashionistas Digital Masters Leadership Capability DigitalCapability Adapted from “The Digital Advantage: How Digital Leaders Outperform Their Peers in Every Industry” by George Westerman et al. Nov 2012 •Revenue: +6% •Profit: -11% •Revenue: +4% •Profit: -24% •Revenue: -10% •Profit: +9% •Revenue: +9% •Profit: +26% •Wait & See •Ask for certainty •Privacy as excuse •Regulation as excuse Technology leader Focus on speed •Lack governance •Lack integration Strong coordination Focus on efficiency •Governance trap •Lack of org mobilization Driven by senior leaders Results to inspire Govern towards outcome Integration with flexibility Learn from Digital Masters Technology Savvy with Operational Discipline 5
- 6. 6 R&D Pipeline Supply Chain Commercial Outreach Genomics & Molecular Breeding Field Capabilities Pipeline Logistics Customer Care (Order-to-Cash) Integrated Planning Advanced Production Customer (NPS) Go To Market Information Service & Products Partners Consumers Stakeholders Hundreds of internal decisions, many relevant to the farmer’s decisions Digitizing Our Business: To Better Serve Our Customers Acquire Collaborate Invent Sensors on combine to collect real-time, in-field data Sensors on truck for real-time data from field to factory
- 7. Digitization from Lab to Customers Superior Product, Superior Customer Experiences Pipeline •Billions of data points •Millions of testing plots Supply Chain •199 locations •47 countries Commercial •Millions of customers •>60 countries Seed Identify and Genomics 7 Perfect Customer Order: Real Time Feedback Real Time Harvest Progress & Yield Data Real Time Temperature & Moisture During Transportation Digital Supply Chain: Real Time Decision
- 8. 8 Expand Our Agriculture Leadership: Secure for Business, Open to All Collaborators A Cloud-Based Digital Infrastructure Expand Product Leadership Serve All Customers • Bimodal IT: Systems of Engagements & Systems of Records • IoT & data streaming • Pervasive analytics • Scalability & agility: Microservice, SOA & DevOp • Seamless authentication • Open and secure collaboration: APIs
- 9. Digital Supply Chain 9 •COGs Savings Driven by Operational Efficiencies • Customer Experience Step Change Leading to Improved NPS • Supply Chain End-to-End Modernization Unlocking Real-Time Decisions PLAN (Planning) SOURCE (Procurement) MAKE (Production) DELIVER (Customer Care) Technology, Breedingand Chemistry Supply Chain Operations: Global Coordination and Local Execution Customers Demand & Supply Mgmt Supply Chain Analytics Procurement Mgmt Field & Plant Optimization Transportation & Customer Service
- 10. Monsanto Company Confidential – Internal Only | 2015 Top Supply Chains Differentiate Themselves 10 35. Monsanto 1. Amazon® “Bimodal Strategies” “Customer Intimacy” “Digital Business Models” 2. McDonald’s® 3. Unilever® 4. Intel® 5. Inditex® - - - - - * Gartner 2015 Top 25 Supply Chain Rankings Monsanto moved up from 100+ in anticipation of transformation
- 11. Monsanto Company Confidential – Internal Only | Transforming Our Supply Chain to Delight Our Customers 11 Customer Indifference (Economic gain only) Customer Satisfaction (Economic gain + responsive service) Customer Delight (Economic gain + inventive service) Seed Production, Network Design, Transportation Management Planning Customer Care – “Ease of Doing Business” Customer Service Perfect Order Loyalty/Stickiness Supply/Demand Accuracy Substitution Reduction “If I asked people want they wanted, they would have said faster horses.” -- Henry Ford ReliabilityEfficiency Internal Value External Value
- 12. 12 Digital Supply Chain is an intelligent, value driven network (Digital Supply Network - DSN) that leverages new approaches with technology and analytics to create new forms of revenue and business value.
- 13. Digital Supply Chain Lighting up our digital supply network & unlocking the digitized information • Rich sensors capture data • In-season optimizations • Yield prediction • Global lab integration • Improved test methods • Rich shop floor integration • Smart equipment • Network utilization • Truck optimization • Quick-ship • Inventory visibility • Fleet monitoring • Delivery validation • Customer360 • Improved Perfect Order & Net Promoter Data Aggregators Digital Capabilities Data Foundation Analytics Transactions Warehouse Appliance Imagery Social Geospatial IoT Sensor Collector API Gateway Data Historian Dashboard Optimization Machine Learning
- 14. Digital Supply Chain Lighting up our digital supply network & unlocking the digitized information • Rich sensors capture data • In-season optimizations • Yield prediction • Improved test methods • Rich shop floor integration • Smart equipment • Network utilization • Truck optimization • Quick-ship • Inventory visibility • Fleet monitoring • Delivery validation • Customer360 • Improved Net Promoter Data Aggregators Digital Capabilities Data Foundation Analytics Transactions Warehouse Appliance Imagery Social Geospatial IoT Sensor Collector API Gateway Data Historian Dashboard Optimization Machine Learning Measure of Success • # of metrics / KPIs exposed • # of decisions automated Measure of Success • % of enterprise supply chain information accessible & reused • # of data sources retired – regional databases & local files Measure of Success • # of IOT sensors connected • # of business capabilities exposed by APIs • # of facilities connected into the enterprise data footprint Measure of Success • Reduced COGs through digital platforms that infuse analytics & data to optimize the business • Improved customer experiences through digital markets • Improve speed to value through the adoption of disruptive technology – decision accuracy, perfect order, E2E visibility, etc.
- 15. Digitization: Convergence of Transformations 15 Supply Chain IT CONVERGENCE • Business harmonization • COGs / inventory efficiency • Customer engagement • Decrease injury severity • People / talent • Agile mind-set • Customer centric • Analytics infusion • Advanced technologies • People / talentDigital SC Platform that: • Creates insights • Shapes outcomes • Leverages new technology • Unlocks new business opportunities
- 16. Thank You 16
Editor's Notes
- We would like to share with you three examples of how digitization are linked to better products and better customer experience: Example 1: Partnering with breeding to digitize the workflows and bring decision science to all aspects of breeding operation Molecular breeding and genomicsiss one of our competitive advantage, the big data technologies enables us to make advancement decisions based on markers that are located across the genome (genome wide selection). Genome wide marker analysis used to take days, now it can be done in minutes. By syncing up the innovation between R&D and IT, we formed a project code named “Breeding 3.0”. We are excited about the opportunity to improve the pace of genetic gains by 30-40% while provide fully traited products to farmers without delaying product launch. The project has an estimated total NPV over $2B and IT is an integral part of this strategic initiative. Example 2: We are part of supply chain transformation. The example here is about real time decision for field harvest and transportation: a). FieldDrive: An in-house invention to stream harvest progress and yield data back to analytics team real time; b). Cargo View: Off the shelf device adapted for realtime monitoring of temp and moisture to ensure seed quality Example 3: We developed capabilities to monitor our deliveries in real time so our customers know when the order will come and can provide real time feedback at the point of delivery
- We wanted to start our transformation update by looking externally first. For the last 11 years, Gartner has ranked the top Supply Chains. Monsanto has been in the 100’s, but in 2015, we showed up as #35 primarily in anticipation of our Supply Chain Transformation. The top companies, as you can see here, differentiate themselves in 3 areas: 1. Bimodal Strategies – Meaning that top companies not only leverage supply chains for tradition cost efficiency opportunity, but see supply chains as an enabler of revenue. 2. Customer intimacy – Top companies go beyond improving the sales experience, but they anticipate the sensibilites of their customers. They deliver service to them before they even ask. 3. Digital Business Models – Finally, top companies use extensive digital platforms to engage with their customers. Our transformation is in fact focused in these areas as well.
- Following the customer intimacy comment made on the previous slides, we wanted to review our areas of focus against this expectation. Our vision for transformation begins with internal efficiencies but reaches out to ultimately delight our customers. You can see on the left the areas where we are focused. Some of these areas are in fact about efficiency, accuracy, and reliability. But the work we want to do in customer care goes past simply internally efficiencies and satisfying our customer, we are focused on delighting our customers. Providing them a level of service that they may not know they want until they get it. The quote at the bottom is a good one to illustrate why we want to focus not just on satisfaction but delight.
- Take a minute… We started our research & dialog around this topic by asking ourselves - prior to doing any readings / dialog / etc. - what is a digital supply chain ? And to quicken our path to a dialog three choices were offered: Enterprise Supply Chain solutions are in place End-to-end visibility of supply chain information Event driven insights that shape outcomes In the end… We adopted all three but not directly. We honed in on #3 as the competitive advantage that would enable #2 and require #1 What do you think ?
- Vision: Unlocking digital yield > Unlocking digital "supply chain” Strategy: Pivot our traditional supply chain as a digital supply network, a network of networks, through analytics and technology that shape positive outcomes Focus areas: Adopting digital platform capability & operating model Maximize existing investments across IT to unlock new capabilities Accelerating time to value by plugging in innovative solutions into our digital foundation Drive unification / rationalization of process and information nomenclature