-50%
Global Strategic Supply Chain Project
Solution
Selected Title: Supply Chain Automation by leverage on Industry 4.0 technologies including AI, ML to streamline operations and value for money in Wood PLC Company
Executive Summary
The purpose of this project is to evaluate supply chain automation by leveraging Industry 4.0 technologies. The identified technologies include Artificial Intelligence (AI) and Machine Learning (ML) noted as critical for streamlining operations and obtaining value-for-money outcomes. This has been pursued by focusing on Wood Plc. To conclude, the generated findings of this report evidence WPC is today adopting the application of iSourcing in their procurement and supply management (PS&M). In the current project, through an evaluation of options for automation of the organization PS&M, the findings evidence the existence of different limitations hindering the success of their system. The issues of cost overruns, lack of collaboration, and inefficient supply chain as the organization is expanding its current operations have been noted to include limitations of their current sourcing. Success in the automation of their supply chain has been identified to lead to the following outcomes;
- Organisation achievement owing to automation of their supply chain, increased confidence and capability, talent management, and employee competency
- Improved stakeholders relations (a later section of stakeholders analysis) easing the change process. Through the iSourcing improvement, WPC would be in a position of harnessing technical and commercial evaluation processes.
- Increased and robust systems and policies which mitigate overall gaps in sourcing system transformation
- Today, only lower than 10% of the entire WPC resources are used to prioritize automation and IT integration successfully. Automation would improve the use of resources in their operations
Also, in this project, different tools and techniques have been referenced relevant for generating appropriate findings of the need for automation in WPC. Success in this project, would be tracked using a Gantt Chart with a detailed implementation plan established and recommended for PS&M in the WPC organisation.
From the identified gaps in this project, various recommendations can be suggested for WPC to improve the automation process of their supply chain. These recommendations include;
- Involve their IT and finance departments to ensure within a period of 6 months they
- WPC needs to consider embracing sustainable practices as part of investing in their Industry 4.0 technologies
- Through the adoption of automation, better communication systems backed by AI and ML would be introduced to achieve 70% increased communication effectiveness.
- It is important to increase this through increasing collaboration and alignment of all their interests holistically
- Partnering with institutions for the provision of capacity development opportunities for the PS&M teams and other organizations for the success of the automation process
- Expanding their sourcing of Industry 4.0 technologies. This is to involve highly reputable global companies hence efficient operations and integration of AI
- Source of support from the government to ensure that they are facilitated in terms of policies and appropriate regulations to guide the automation process.
Table of Contents
1.1 Project Title (Key Terms) 5
2.2 Rationale of Project; Objectives. 12
2.2.1 WPC Procurement Supply Chain Management Structure. 15
2.2.2 WPC Category Management 18
3.1 WPC Oracle iSourcing as current strategy. 20
3.2 Automation of Supply Chain in WPC.. 22
3.2.1 Situational Analysis. 24
3.2.3 Options to Modernise/automate WPC supply chain. 27
3.3 Risks and Mitigation Strategies. 29
4.2 Findings in this Project. 32
4.2.1 Stakeholders Management 32
4.2.2 Implementation of Automation in WPC Supply Chain by use of AI and ML. 34
4.2.3 Value for Money Outcomes and Demand Forecasting in Project Implementation. 36
4.2.4 Sustainability of PS&M Automation of Supply Chain in WPC.. 38
4.2.5 Barriers of Automation of WPC Supply Chain Network through AI and MLA. 40
5.0 Interpretation of the Analysis and also Conclusion. 41
5.1 Mapping of Stakeholders. 41
5.2 Value for Money Outcomes and Demand Forecasting in Project Implementation. 44
5.3 Sustainability of PS&M Automation of Supply Chain in WPC.. 46
5.4 Barriers of Automation of WPC Supply Chain Network through AI and MLA. 47
5.5 Implementing Automation of Supply Chain in Industry 4.0 Technologies such as AI and ML. 49
7.0 Conclusion and Recommendations. 54
Appendix 1: Research Questionnaire. 60
Appendix 2: Interviews Script 64
Figure 1:Summary of WPC Current Procurement. 7
Figure 2:Determinants of the change strategy. 11
Figure 3:Balogun and Hope Model 12
Figure 4:Summary of 5 Rights Procurement. 13
Figure 5:Matrix Structure in WPC Organisation.. 14
Figure 6:Contract Management Model. 15
Figure 8:A Summary of the product Lifecycle.. 18
Figure 9:Factors in BSG Matrix Considered.. 20
Figure 10:A Summary of Industry 4.0 Applicable in PS&M.. 22
Figure 11:A Summary of the Kraljic Matrix Analysis Summary. 23
Figure 12:Summary of categories of evolving nature of development in Management 24
Figure 13:A Summary of the GE/McKinsey Matrix Analysis. 25
Figure 14:Summary of the Risks and Mitigation Strategies. 27
Figure 15:Summary of issues hindering a successful sourcing in WPC.. 30
Figure 16:Accessing AI and ML Technology for Automation of WPC Supply Chain. 32
Figure 17:Engineering and Consultants as end-users satisfaction with the automation.. 33
Figure 18:WPC PS&M Value for Money Outcomes and Efficiency. 34
Figure 19:Sustainability of the PS&M Automation of Supply Chain.. 35
Figure 20:Benefits of WPC Supply Chain Network Automation Successfully. 36
Figure 21:Summary of the Barriers to Implementing the Automation Process in WPC Organisation 37
Figure 22:Barriers of Implementation of Automation in WPC Mitigation Strategies. 38
Figure 23:Technique for Stakeholder Mapping Analysis. 39
Figure 24:Stakeholders Analysis Summary of the WPC Automation of Supply Chain.. 40
Figure 25:Summary of the Complexity Analysis. 44
Figure 26:Summary of implementation of Kotter’s 8 Phases of Change. 45
Figure 27:Phases of Team Development in the Project. 46
Figure 28:Belbin Team Role Summary. 48
Table 1:Background of the different respondents. 30
Table 2:STEEPLE Analysis Summary. 42
Table 3:Summary of PESTLE Analysis. 43
Table 5:A summary of the Implementation Plan Phases. 49
1.0 Introduction
1.1 Project Title (Key Terms)
In the highly competitive business environment, improving the supply chain management and procurement (SCM) is essential for enhancing efficiencies, costs reduction and effectiveness. In CIPS (2021) report, this is identified as essential for ensuring appropriate positioning of an organisation to dominate their market of operation and also achieve competitive advantage. In specific, current economic recession and past disruptions occasioned by COVID-19 pandemic, supply chain disruptions inform the need for organisations re-strategising. In the Energy and Materials industry in United Arab Emirates, comparative with the other sectors, it has not effectively automated their supply chains. This has been the case prior and after the COVID-19 pandemic. In Waqar et al. (2023) report which focused on evaluating the scope of digital maturity in the Energy and Materials industry, it hypothesised that the sector is non-competitive with other sectors in terms of embracing full digitisation as an approach of modernising their entire operations. With costs overruns being an issue in Energy and Materials industry, players put efforts towards maintaining competitiveness and efficient operations.
Taking into account of Wood Plc Company (WPC), albeit of operating Oracle iSourcing which is a development from their past traditional-based sourcing, they are yet to successfully automate their supply chain. This guide the need for investment on the popular Industry 4.0 technologies (Mastos et al., 2021). Supply chain automation would imply that WPC organisation has leveraged on competitive advantage and improving their positioning in UAE Energy and Materials sector. This is through a successful streamlined operations and value for money. The current sourcing strategy adopted by WPC supply chain is as illustrated in figure 1;
Figure 1:Summary of WPC Current Procurement
Source: CIPS Module notes
Considering the different stages in figure 1, as a best practice, automation of their supply chain would have a positive impact to categorise and manage spend categories. This is particularly in the application of artificial intelligence (AI) and Machine Learning (ML) and different customised tools in the Energy and Materials sector. Further, the automation of the entire supply chain would mean that approximately 60% of their costs would be saved and leverage on engaging international suppliers.
The process map which would be used in the implementation of the project is as illustrated in the following;
Figure 2: Process Map in Automation process
This implementation would involve several phases. The first step in the process is to conduct a comprehensive assessment of WPC’s current supply chain. This involves evaluating existing processes, identifying inefficiencies and bottlenecks, and comparing the current state with Industry 4.0 standards. A gap analysis will help highlight areas where technology can be leveraged to improve operations. By referencing the CIPS Module notes and the report by (Waqar et al. 2023), WPC can gain insights into their current standing and the necessary steps to advance towards full digitization.
The second phase is the Planning Phase. In this phase, WPC needs to align its automation goals with overall organizational objectives. Engaging stakeholders early ensures buy-in and support throughout the project. Resources, including budget and personnel from IT and finance departments, should be allocated to support the automation efforts. According to (Wanasinghe et al. 2020), proper planning and strategic alignment are crucial for the successful implementation of Industry 4.0 technologies.
The third phase is the design phase. During the design phase, WPC should identify and select suitable AI and ML tools that align with their automation goals. This involves evaluating various Industry 4.0 technologies to determine the best fit for their supply chain needs. Additionally, the necessary infrastructure for automation must be designed, ensuring seamless data integration and system interoperability. The insights from Wanasinghe et al. (2020) can guide the selection and design process to optimize the supply chain effectively.
The implementation phase begins with pilot testing of the selected technologies to monitor performance and make necessary adjustments. Once the pilot tests are successful, WPC can proceed with full deployment, ensuring that the new technologies integrate seamlessly with existing systems. This phase requires careful management to avoid disruptions and to achieve the desired improvements in efficiency and cost savings. After implementation, it is essential to establish key performance indicators (KPIs) to track the success of the automation (Wanasinghe et al., 2020). Regularly reviewing and analyzing performance data helps ensure that the automation efforts are meeting their goals. Continuous improvement should be based on stakeholder feedback and performance data. This phase helps in maintaining the effectiveness of the automated systems and making necessary adjustments over time, as outlined in the CIPS Module notes.
Finally, WPC should focus on incorporating sustainable practices into their automation strategies to ensure long-term success. Compliance with industry regulations and adopting environmentally friendly practices are crucial. Additionally, partnering with institutions for training and development will enhance the competencies of the PS&M teams, enabling them to handle new technologies effectively. Wanasinghe et al. (2020) emphasize the importance of capacity building and sustainability in the successful adoption of Industry 4.0 technologies.
By following these phases, WPC can strategically implement supply chain automation, leading to significant improvements in efficiency, cost reduction, and competitive advantage. The comprehensive approach ensures that the transition is smooth and sustainable, positioning WPC for success in the highly competitive UAE Energy and Materials sector.
To optimise their operations, the identified technologies such as AI and ML would aid in initiating an appropriate infrastructure and their usability. The rationale of this is ensuring they are remodelling their practices. Through a successful integration of the different industry 4.0 technologies in the different stages of procurement cycle, challenge of resources currently hindering efficiency of their supply chain would be solved. Further, for management teams, CIO and executive directors could be appropriately positioned in working in collaboration therefore reducing entire resources required.
The popular technologies such as predictive maintenance, cloud technologies, and big data analytics are relevant in the Energy and Materials industry for vital data management, hence improving the entire operational efficiencies. All these technologies have been available in the market despite of their popularity increasing in the recent past.
Hence, it is essential considering the extent of supply chain automation which can contribute to success of WPC in their operations. This would be successfully integrated in their procurement strategy particularly in regard to contracts and performance measurement strategy.
1.2 Project Scope
As supported by Gartner (2022) report, being a past best strategy, technology investment was intended to harness costs overruns management and reduction of risks. Nevertheless, the rise in popularity of automation with new emerging technologies such as cloud services improving business units with new responsibilities assigned. This is with technologies adoption being more of tactical strategy. It is used in serving strategic roles and capacity for being distinguished from other competitors.
In the past, WPC has been attempting and implementing multiple techniques and models which could or could not be noted as most appropriate option informed by various indicators and assessment. In a broad perspective, multiple entities, partnerships and employees are influenced in distinct manner by incapacity for holistically prioritising on fundamental aspects, efficiencies, quality and capacity development. For instance, by introducing iSourcing, the organisation is noted to have improved on their procurement and supply process assuming a reactive approach as opposed to proactive and sustainable vision implementation in iSourcing. Hence, different organisations, departments and people are influenced in distinct dimensions inclusive of the capacity for holistically prioritising on efficiencies, excellence, capacity development, patterns and economy, partnership and distributors and more. By following the process map (see figure 2), the automation would be as illustrated in the following;
Figure 2: Automated Supply Chain Project in Wood Plc
Source: Summarised by the study
In line with figure 2 process of automation, by successfully automating the supply chain in WPC, this would play the role of an e-gateway for a successful supply chain and business operations by engaging bidders, interacting actively and responding to WPC issued tenders (Relationship automation). This is at the same time enhancing security, simplification, pre-governed and efficiencies in managing tenders posted online in their platforms (control and supervision automation). The entire automated system would imply that WPC and their entire stakeholders are protected from challenges linked with accessibility, on-time delivery, documenting their operations and approaches which include costs overruns management (material flow automation and information automation).
Based on this background information, this report will focus on investigating and recommending initiatives and techniques for supply chain automation in WPC organisation. This is intended to improve their operations, standards and optimized operations and achieve added value for being prepared. The rationale of this is that management of the SCM is complex undertaking demanding a holistic approach with risks managed. The value accrued and appropriate costs development emerge form an increased integrated central process. The outcome of this research would include demonstrating how the supply chain automation is not only an active approach but classic with value added in enhancing the supply chain operations. All the technologies would be instrumental for harnessing end-to-end efficiencies, transparent in operations with real-time costs management and value accrued in organisation operations.
1.3 External Environment
The importance of focusing on the external environment is to assess how these factors influence on the supply chain automation in WPC. According to CIPS (2022), procurement and supply chain professionals are supposed to take a long-term view for risks in prioritising on their operations in the highly Volatile, Uncertain, Complex and Ambiguous business environment (see figure 3).
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