Jan Roodenburg is vice president for EMEA of supply chain and operations at Hewlett Packard Enterprise (HPE). Volker Heinle is director for EMEA of supply chain strategy and new product introduction at HPE. The two executives will be co-presenting at Internet of Supply Chain EMEA, to be held in Amsterdam in May. Here, they give us a sneak preview into some of the achievements that HPE has notched up so far, in terms of streamlining a complex supply chain using IoT and other recent technologies.
HPE has been using IoT in its supply chain for some years already. Could you tell us the story of how this came about?
For much of the last fifteen years, HPE has outsourced the vast majority of its operations to suppliers, manufacturing partners and logistics. This drove the majority of transactional data outside of our enterprise. In addition, many other data elements are kept in silos, either in structured formats within bespoke applications, or unstructured formats on shared drives, which are not easily accessible. The need to access these data elements and to make them available to drive decisions in our operations was the main driver for HPE to invest in IoT – or Industry 4.0, as we call it in Europe.
In 2014, HPE’s EMEA supply chain group started to drive the cross-company data integration necessary to enable big data applications based on an internal big data platform, which includes technologies from SAP HANA, Hortonworks, Qlikview and Tableau. This innovation led to the formation of a worldwide supply chain analytics team, which is now creating applications on this platform for worldwide usage. IT research company Gartner has recognized our innovation here in its supply chain ranking for high-tech industry companies.
Based on the positive experience we had, we then went on to create an EMEA supply chain-led Industry 4.0 initiative in 2016, under the leadership of Volker Heinle. His team implemented different proof of concepts (POCs) for our manufacturing and logistics processes, using a range of technologies including 3D printing, cloud computing, data visualization, augmented reality and, of course, IoT. The initial plan was to verify the feasibility of the technologies and their respective use cases, but successful pilots then get scaled if they can reasonably be expected to drive business value.
Looking back at these projects, what sort of benefits did they deliver?
The implementation of the big data-based applications – with the goal of empowering our operational teams – enabled us to reduce our cycle times by 50 percent over the last two years. An additional and initially unexpected benefit is that we saw a significant increase in employee engagement, at all levels of the organization, among those who participated in the Industry 4.0 improvements. For example, engineers within operations have been able to focus on innovation, a daily topic in the media, rather than the day-to-day operational aspects of their work. Also, we provided these innovation teams with a framework to get time and funding to verify their ideas and hypotheses.
What was the biggest challenges you faced during the implementation of the technology – and how were these tackled?
The technology side of things was not the biggest hurdle to overcome. What was key to our success was changing from a traditional ‘waterfall’ project approach with high price tags and upfront, senior manager sign-off to an approach focusing on proof of concepts. We created small, agile teams who received a limited budget to verify their hypotheses within a short timeframe. The budget was only approved if the technical teams could identify potential business value.
As mentioned previously, HPE operates a highly outsourced supply chain, and our advice to organizations in a similar position is that they will need to include their business partners early to ensure they participate in the journey and so that value is created for them as well as you.
What’s next for HPE’s supply chain?
I’ve spoken a lot about data, but so far, we have mainly used structured data, which is sourced from our own HPE systems and those of our supply chain partners. We are now planning to tap into unstructured data (from, for example, surveillance, share points, cameras and so on) and to overcome some of the cloud computing challenges (such as response times and the volume of data travelling across the network) by using IoT edge devices. During our 2017 financial year, we expect to identify some ways on how to use unstructured data better in our business processes – looking, for example, at photos stored in share points and whether video analytics might be utilized for quality control at assembly stations.
You’ll be presenting at the Internet of Supply Chain in Amsterdam this coming May? What are the main points that you hope attendees will take away from your presentation?
We plan to provide an overview of our digital supply chain transformation and the learnings we gained on that journey. One of our main interests in attending is to engage with other supply chain thought-leaders to get inputs that might stimulate further innovation at HPE.