A Manufacturing Leader’s view of digital transformation
As digital transformation sweeps the manufacturing industry, traditional planning approaches are being put to the test, and they are failing to keep up with the new pace of business. To account for this, and an increasingly complex supply chain, o9 Solutions, an industry leader in business planning and operations management, has developed a comprehensive end-to-end supply chain planning solution Built on Microsoft Cloud technology. We sat down with o9 Solutions’ co-founder, Sanjiv Sidhu, to get a sense of what digital transformation means for manufacturers.
Q: Can you give us a brief overview of your background and what drove you to found o9 Solutions?
Two of my interests have always been artificial intelligence (AI) and reducing unnecessary waste. Large organizations can be very wasteful. If a company runs inefficiently, it uses excessive energy, scarce resources, extra space, and time that employees could otherwise spend with family or contributing to a better world.
When I worked at Texas Instruments in the AI laboratory, the company was dealing with a lot of demand variability and uncertainty, resulting in inefficiency across the supply chain. The company produced very sophisticated semi-conductor chips, but they couldn’t predict changes in demand. We were asked to fix these problems by improving operational efficiency with AI, inspiring me to start i2.
i2 provided great business value by helping streamline supply chain planning, but many supply chain problems have roots in other departments. If you introduce a new product without coordinating across the organization, it might not sell, or you might end up stuck with raw material from a discontinued product that now can’t be used. We realized that to eliminate these inefficiencies, sales planning, marketing planning, supply planning, and supplier planning all had to be combined on a single platform—so that’s what we did with o9.
Q: Why is it so vital for manufacturers to look towards digital transformation in the supply chain today?
There are three important questions manufacturers must ask when managing their supply chains—we call them the three W’s. First, manufacturers must ask what is happening and why. This question requires manufacturers to leverage their business intelligence to analyze data and form an understanding of the state of their business. The second question asks what’s going to happen, which comes down to predictive analysis—being able to look at the current state of business and predict how it will change. Finally, manufacturers must ask themselves what they should do to respond to these changes. This is the most important question as manufacturers must make an effective decision to drive positive business results, and that’s what planning is all about.
With traditional planning methods, manufacturers rely on Excel spreadsheets to track and analyze quantitative data, PowerPoint presentations to collect insights and drive decision-making, and email to enable communication. It takes a long time to answer the three questions outlined above. Nowadays, manufacturers have access to so much data that this approach is no longer feasible. They need amazing amounts of computational power to quickly and intelligently analyze huge volumes of data, and that’s why digital transformation is so important.
Q: Where do o9 and its solutions fit into the broader scope of operations planning today?
Manufacturers are inundated with thousands of pieces of information which often end up siloed within departments, limiting visibility and an organization’s ability to plan. That’s where AI and o9 come in. It all starts with our AI platform, the Enterprise Knowledge Graph, which takes all the information from across the organization and combines it with the knowledge of the people at the organization. We then use AI to sift through large volumes of data to find the important information and propagate that data to the people at the company who can use it to make better decisions.
On top of that, our team at o9 has extensive experience, which allows us to go into organizations and help answer key planning questions like how is this product sold, how is it marketed, how was it made, and how was it developed? Our team looks at these questions in a sophisticated way and combines our market knowledge with data insights from the Enterprise Knowledge Graph to answer them quickly and easily.
Q: How is o9 making a difference for customers? What are some of the results they’re seeing?
With Dell, for instance, we’re not just helping them forecast correctly, we’re helping them shape demand. If Dell is forecasted to send 100 computers to a certain distributor but now only has 70 available, we can help them figure out the sales moves that must be made to match the forecast. If there is a shortage of a given disk drive, we help them quickly and accurately answer questions like which computers will be impacted, how much will it cost to increase supply, and whether it’s worth it to do so or not. We provide the market context required to make these sorts of decisions.
Bridgestone is also one of our oldest clients and one that I work with personally. They are a premier tire manufacturer and sell to many distribution points, in addition to running over 2,000 of their own retail stores. With Bridgestone, we are working to make decision-making easier through more cross-enterprise collaboration. If there’s a shortage of tires, Bridgestone needs to be able to figure out how the remaining tires should be allocated. We provide the platform for the central sales organization, account teams, and marketing teams to work together, and the market context required to answer that question intelligently.
It’s our tool’s ability to allocate and analyze data instantly that enables this collaboration. Whereas traditional approaches require upwards of two days for a supply chain planner to figure out the effect of a change and decide what should be done, our tool enables business leaders to identify business challenges and opportunities, run what-if scenarios, and make key decisions in a single meeting. Looking at Bridgestone, we feel we are saving them at least 10 times what they are investing in us. We’re seeing similar results with other customers like Dell and Caterpillar.
Q: You’ve been working with AI since your days at Texas Instruments. What advances are you watching most closely today, and how do you see AI further influencing business planning?
In terms of business planning, we’re interested in the development of natural language functionalities, machine learning, and the development of data-cleansing technology. We’re especially interested in the technology coming from Microsoft because we are so aligned to technologies like Cortana and Azure. Eventually, we want users to be able to talk to our software – to tell the software what is happening and ask it what to do and who to inform. We are already doing some research in these fields and are starting to see exciting results.
Q: In May of last year, o9 solutions debuted on the Gartner Magic Quadrant for S&OP as highest in execution and furthest in vision within the Visionaries Quadrant. How did that achievement feel?
We’re really honored and are of course very happy to be placed on there, even if our goal is to keep moving up in their rankings. Right now, even though we are super excited and honored to be recognized, we feel the true recognition of our solution comes from our customers who are usually quite wowed by the capabilities we provide.
o9 Solutions’ Integrated Business Planning solution, Built on Microsoft Cloud technology, is available now on Microsoft AppSource. Learn more about o9’s powerful, agile, and expandable solution by trying the demo today.