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1、2023 EXECUTIVE COMPASSSUPPLY CHAIN&MANUFACTURINGNo nonsenseInsights for Executives The double whammy of the pandemic and the war has disrupted supply chains,increased inflationary pressures and lowered expectations for output and trade growth.1.Impact of-War on Global Supply ChainRussia UkraineShift
2、ing Dynamics at Global ScaleThe Headline Global PMI(53.0)remained above the threshold value of 50 in March,suggesting that manufacturing output may still be expanding but at a reduced pace.12023 Executive Compass FOR supply chain&MANUFACTURINGJan-19Apr-19Jul-19Oct-19Jan-20Apr-20Jul-20Oct-20Jan-21Apr
3、-21Jul-21Oct-21Jan-222530354045505560Headline Global PMINew Export Orders I1Source:WTO1Index,base=502023 Executive Compass FOR supply chain&MANUFACTURINGJan-19Apr-19Jul-19Oct-19Jan-20Apr-20Jul-20Oct-20Jan-21Apr-21Jul-21Oct-21Jan-223035404550556065707585A rise in input and output prices and an uptick
4、 in delivery times in March 2023 suggests continued supply-demand imbalances that could contribute to inflation in the coming months.1Note:Values greater than 50 indicate expansion while values less than 50 denote contraction1Source:WTO2Input Price IndexOutput Price IndexStocks Finished Goods IndexS
5、uppliers Delivery Times IndexLooking at the graph,while most of the manufacturing industry is recovering,supplier delivery times are still struggling and are significantly underperforming.2023 Executive Compass FOR supply chain&MANUFACTURING3Source:Outlook12.Wars Influence on Shortage of Raw Materia
6、ls Russia-Ukraine war has caused a supply chain shortage ofacross the Black sea region,which poses a threat to the global semiconductor industry.1PdPalladium46NeNeon10HeHELIUM2UkraineSanctions imposed on Russia is hampering the supply of palladium and copper for manufacturing automobiles and electro
7、nics.1PdPalladium46CuCopper29RussiaAs the raw material shortages increase and prices rise,companies can integrate supplier and secondary suppliers data to create their performance overview to evaluate the existing vendors,check the current contracts and develop new long-term agreements with better p
8、rice terms.2023 Executive Compass FOR supply chain&MANUFACTURING4Source:BBC13.Sanctions on Russia&Impact on Energy SectorRussian Contribution to EnergyRussia provides 30%to 40%of Europes oil,gas and coal.Russias exports supply 4%to 5%of the worlds energy.European countries importing Russian oil1Perc
9、entage of countrys total oil imports coming from RussiaLithuania83%Finland80%Slovakia74%Poland58%Hungary43%Estonia34%Germany30%Greece29%Norway25%Latvia24%Netherlands23%Belgium23%Czech Republic21%Denmark15%Italy13%France13%UK11%Spain11%Portugal10%Sweden9%Ireland6%Austria3%War Sanctions Against Russia
10、European Union sanctions will put a stop on around 90%of Russian oil imports into EU by the end of 2022 constraining global crude oil supply.Biden administration is altogether banning the import of Russian oil and other petroleum products,its about 8%of U.S.-bound crude shipments.The UK is to phase
11、out Russian oil imports by the end of the year.Energy giants such as Shell,BP and Exxon all pulled out of Russian energy deals.2023 Executive Compass FOR supply chain&MANUFACTURING5Source:weforumbusiness-standardindiatodayeconomictimesBloomberg123454.Rising Oil Prices GloballyReasons for Soaring Oil
12、 Prices:31 Dec 202110 Jun 2022020406080.78122.01OPEC(Organisation of Petroleum Exporting Countries)members+oil cartel are producing less oil than pre-covid.U.S.companies slowed production at the start of the pandemic and havent returned to previous levels of production.European&Asian buye
13、rs got into bidding wars over boatloads of LNG,driving up the prices due to natural gas shortages.Energy providers started burning oil to generate electricity,which drained oil supplies further.1122344Increase in petroleum demand than supply as pandemic restrictions reduced.Renewed tensions between
14、Saudi Arabia&Yemen following a drone attack on three oil tankers in Abu Dhabi.Loss of russian oil exports.The covid years reduced investments in the expansion of refining capacity&production.12%jump is expected in Chinas consumption in Q3 2022.Prices likely to cross$120 a barrel due to increased dem
15、and&reduced supply.Crude oil prices5Brent crude($/barrel)2023 Executive Compass FOR supply chain&MANUFACTURING6Source:economictimesIIFL Securities 12Effect of Oil Price Hike on the IndustryIn 2020,the breakdown in the use of petroleum was:1Climbing oil prices translate directly to higher diesel pric
16、es.These costs are passed down to shippers,making international shipping more expensive.Crude oil being a necessary raw material,its prices directly affect the cost of producing goods.$10/barrel increase in crude oil prices could raise inflation by 10 basis points(0.1%).11Oil prices might create a m
17、arket for renewables as people seek climate-friendly alternatives.2High oil prices improve the economics of electric vehicles(EVs)and other alternatives like hydrogen and other potential solutions for mobility.266%Transportation28%Industrial3%Residential2%Commercial1%Electric Power2023 Executive Com
18、pass FOR supply chain&MANUFACTURING7Source:indiatodayeconomictimesWikimckinseyMoneycontrol12345Measures Taken to Tackle the SurgePresident Joe Biden announced in November 2021 that the U.S.and other nations would release oil from their strategic petroleum reserves to reduce prices.barrels(approx.)of
19、 oil in all will be released by these countries in a coordinated fashion over six months,which would translate into 400,000 barrels a day.1U.S.A.-50 million barrelsU.K.-1.5 million barrelsIndia-5 million barrelsChina&Japan-Not disclosed75 M5.Global Semi Conductor Chip ShortageLess availability of se
20、mi conductor chips is causing delays in everything from automotive to medical devices to technology and networking equipment.Industry leaders expect this shortage to continue into FY2024.2Cost of FAB went from$1 billion to$10 billion or$15 billion.4Toyota cut its July 22 global production plan by 50
21、,000 vehicles,citing semiconductor shortages and parts supply disruption.3Chip lead time rose to 21 weeks in August,from 6 weeks in July.5Top FAB manufacturing companies for chips reduced from 20 to 3 today that include:42023 Executive Compass FOR supply chain&MANUFACTURING8Source:capgemini-engineer
22、ing1Reasons for Chip Shortage1Early pandemic fears triggered additional OEM stockpiling due to additional supply chain unbalance&transportation cutbacks.Over-Ordering and Stockpiling In 2020,due to economic conflict,US imposed restrictions on Chinas SMIC,making it harder for them to sell to companie
23、s with American ties.ChinaUnited States Trade WarIn 2021,Taiwan experienced its worst drought leading to problems among chip manufacturers that use large amounts of water to clean their factories and wafers.Drought in TaiwanWhen automakers cut 2020 orders due to drop in demand,suppliers reallocated
24、chips to other industries.Supply Reallocation After Automotive ShutdownsMigration to at-home working,schooling,and quarantine activities drove dramatic shifts in product demands.COVID Triggered Changes in Consumption Severe winter storm in 2021 forced the closure of two plants in Austin,Texas owned
25、by Samsung and NXP Semiconductors,due to loss of electricity thus effecting supply.Severe WeatherMany FABs slowed and shut down production of some manufacturing processes during covid.FAB CapacityThe no.of ICs used per component system increased by 25%from 2016 to 2021 consuming inventories faster.G
26、rowth of Content per Product/SystemFAB manufacturers and semiconductor companies need a better way to predict demand utilizing the latest AI/ML algorithms that consider market dynamics,demand,previous sales history,current sales orders,seasonality,and other factors,as they cannot afford to lose this
27、 lucrative market opportunity.Companies that depend on chips need to plan their chip requirements in advance and get the right contracts in place to ensure deliverability from FAB manufacturers.2023 Executive Compass FOR supply chain&MANUFACTURING9Source:moneycontrol1New Investments to Curb Shortage
28、:1Biden administration to subsidize construction of new U.S.semiconductor manufacturing plants.Two new fabrication plants in the U.S.:$50 Binvestment package for infrastructureTSMC fab in ArizonaTexas Instruments in Texas$251 Binvestment,the South Korean government has announced to help companies bo
29、ost the production of semiconductors.$206 B(240 T Won),Samsung will invest in the next 3 years to expand footprint in bio-pharmaceuticals,AI,semiconductors,and robotics.Intel announced plans to build 2 leading-edge logic fabs in Ohio at a cost of$20 billion with construction set to start in 2022,and
30、 production expected to begin in 2025.Taiwan Semiconductor Manufacturing Company(TSMC),increased its 2021 capital spending budget to$28 billion.In 2021,Samsung announced it is investing in a new fab facility in Texas.2023 Executive Compass FOR supply chain&MANUFACTURING10Source:china-blogs.imf.org12
31、6.Impact of Chinas Zero-COVID Policy on Logisticsrise in the number of global containers waiting outside Chinese ports as lockdowns continue.Ningbo port&port of Shanghai,worlds most important ports are still suffering from logjams caused by the pandemic.1At Ningbo port only 38%of trucks received mov
32、ement pass.The two-month lockdown in Shanghai has significantly impacted exports.Shipping giant Maersk estimates lead times of trucking services in Shanghai will be“severely impacted by 30%”.Cargo crunch2Shipping costs(indexes;March1,2020=100)Baltic Dry IndexMar-20020040060080010001200Mar-21Mar-22Fr
33、eightos Global Container Freight IndexWith increased shipping lead times and costs,logistics companies need to identify opportunities to optimize their supply chain network:1.Companies must assume and try to predict delays at key logistics nodes,and put a process in place to proactively address exce
34、ptions and even re-route shipments with near real-time monitoring.2.Companies should also start visualizing and analyzing their supply chain network(both level 1 and level 2 suppliers)for single point of failures,near-shore suppliers and best supply routes.28%2023 Executive Compass FOR supply chain&
35、MANUFACTURING11Source:blogs.imf.org17.Increase in Raw Material Prices(Pre&Post Covid)Raw material prices have skyrocketed throughout 2021 as lockdowns eased and industries started back up again.This is due to their limited availability,increased demand post covid,low production from closed factories
36、,and transport restrictions due to lockdowns.With industries looking to recover from 2020s disruption,companies have added pressure to stock back up on raw material stores they may have let dwindle during 2020.Below is a graph that shows how the raw material prices have fluctuated.Metals prices are
37、at a nine-year high,outperforming agricultural and energy commodities during the pandemic.000800180Indurstrial MetalsEnergyArgicultural CommoditiesP122023 Executive Compass FOR supply chain&MANUFACTURINGSource:outlookCNBClivemint1238.Challenges
38、for Industriesreduction in sales of passenger vehicles during Q1,2022.1Rising aluminum,crude oil,and steel prices will likely swell automobile prices globally.Delayed&reduced production of automobiles due to delay in supply of raw materials.8%Automobile Manufacturingincrease in sales value of home a
39、ppliances&electronic gadgets as prices rise.2Semiconductor shortfall is expected to put a strain on the supply of electronics goods.37%rise in demand of consumer durable products during covid due to lockdowns.20%Consumer Goods Industryrise in shipping cost due to the pandemic,as borders&ports were c
40、losed globally.3$120 per barrel increase in fuel costs indicate rise in logistical costs.As scarcity of new containers is rising,shipping costs continue to elevate.98%Transportation Industry Christopher Tse,CEO of Musical Electronics Ltd.We cant get enough components,we cant get containers,costs hav
41、e been driven up tremendously.“2023 Executive Compass FOR supply chain&MANUFACTURING13Source:Bloombergbusinessfacilitiesglobenewswire1239.Focus Area:Reshoring3000+FirmsIncrease in cost of transporting a container from Asia to Europe since 2020.Current transportation costs make nearshoring or onshori
42、ng more competitive globally.Half of all global sector companies in North America declared an intent to“reshore.”Companies in semiconductors and autos planned to shift parts of their SC from current locations.10 xFindings of a Survey1Examples of ReshoringSchneider Electric decided to build 3 new man
43、ufacturing facilities in North America.1lectricit de France signed an agreement to purchase part of GEs nuclear power business exemplifying globalization to localization.1AirBorn Inc.,electronics parts manufacturer(aerospace industry),to invest$3.7 million to expand its assembly plant in Erie,PA USA
44、.2Shawmut Corp.manufacturing advanced materials for automotive,medical,industrial and military applications,is including 50 new assembly lines,and 300 new jobs.3With reshoring,companies can now evaluate vendors that are close to them vs.vendors that are far.Companies can start leveraging supply chai
45、n analytics to validate the performance of vendors,quality of products,check who is the closest vendor,who provides the best prices,and others across multiple vendors.2023 Executive Compass FOR supply chain&MANUFACTURING1.Building a Resilient Workforce110.Emerging Trends2.1 MMestimated unfilled manu
46、facturing jobs in U.S.by 2030.20%women to be in factory workforce,according to the Daimler Indias newly launched initiative.Post pandemic,manufacturing companies are looking to:Solutions Adopted:2Diversifying the WorkforceDiversity is often focused on women in manufacturing because it has been male-
47、dominated.To encourage more women in workforce,companies are including flexible work arrangements and trying to ensure work/life balance.Government Policies Government policies are being aimed at capacitating academic institutions with training programmes and certifications to upskill the workforce
48、in rendering them digitally fit.Source:14Build resilient operations to survive supply chain disruptionsAdjust to the labor shortageBridge the skills gap2023 Executive Compass FOR supply chain&MANUFACTURING15Source:beekeeper.io1In 2021,Washington USA,passed the Economic Strength Through Manufacturing
49、 Act which seeks to double the number of women-owned and minority-owned manufacturing firms.As companies try to adjust to labor shortages,they can also implement digital solutions that will improve efficiency and productivity.Companies can invest in automating repetitive and manual processes.They an
50、alyze the existing processes&identify time-consuming tasks which,when digitized,reduce redundancy and improve productivity.1.Companies should consider using predictive intelligence that can help them make better and faster decisions,explore potential scenarios and plan in advance for shortages,delay
51、s and their impacts.2.2.Redefining Manufacturing Roles Using Automation and Robotics1will be the worth of Global agricultural robotics market by 2032.Due to labour shortages,agriculture companies are turning to automation and robotics to tackle tasks like weeding,seeding,and harvesting.Robotics agri
52、 startups are receiving funding boosts.8%$27Mfunding was raised by Carbon Robotics for their autonomous weeding robot.$20Mwas raised by Tortuga,a harvest automation startup.Reskilling Workforce on Digital TechnologiesCompanies are crafting talent strategies that develop employees critical digital an
53、d cognitive capabilities.They are training them in new digital skills as they repurposed their processes to digital operations during the pandemic.2023 Executive Compass FOR supply chain&MANUFACTURING3.Smart Factory Initiatives120%CAGR is the expected growth rate of investment in AI by 2025.More and
54、 more organizations are making progress and seeing results from increasingly connected,reliable,efficient,and predictive processes at the plant.45%of executives aim to increase investment in IIoT to improve operational efficiency.Companies should identify the opportunities in assembly lines and work
55、 centers where they can use automation.They should start using IoT to measure the real time performance of work centers and also predict and address potential maintenance failures proactively.Digital supply networks&data analytics are powerful enablers for multi-tiered responses to supply chain disr
56、uptions.4.Rethinking Supply Chains1Lack of supply chain integration is predicted to stall smart factory initiatives for 3 in 5 manufacturers by 2025.Supply chain networks have been complex,and organizations do not seem to have clear visibility of the entire network.Thus,many market leaders are inves
57、ting in creating a digital twin of their physical networks,allowing them to identify and analyze the networks for mitigating risks while optimizing performance and reducing 16Source:faistgroup12023 Executive Compass FOR supply chain&MANUFACTURING17Manufacturing companies are adopting digital platfor
58、ms that reduce paper and costs,thus embracing sustainable solutions.of the revenue was earned from renewable energy and reduced carbon emissions by 47%.rsted is transitioning to renewable energy and decarbonizing its supply chain.262.2%per year has been saved by working on 5,700 sustainable projects
59、 since 2010.Honeywell has committed to reaching carbon neutrality by 2035.2$100 M5.More Focus on Sustainability1Government policies will require manufacturing to transform end-to-end operations digitally,from designing and delivering products to factory models.Companies can deploy cloud and IoT solu
60、tions to monitor their existing metrics on sustainability.Additionally,companies can leverage digital twins technology to use their resources better.It is driving companies to rethink their operating models and shift towards low-carbon manufacturing systems.of global greenhouse emissions caused due
61、to manufacturing.Companies should start initiatives that will allow them to measure their carbon footprint across their supply chain network and production processes.They should proactively reduce their carbon footprint by favoring sustainable suppliers,using renewable sources,and automating process
62、es.Digital twin can actually help companies to start tracing their carbon scores.It can provide them with the necessary visibility to act on sustainable initiatives.Source:beekeeper.iosustainability-times122023 Executive Compass FOR supply chain&MANUFACTURING18Source:faistgroup16.Cybersecurity for S
63、mart Factories1Investments in Cybersecurity Solutions by Manufacturing Companies Cybersecurity investments are increasing due to an expanding attack surface,coming from the connection of-Operational technology(OT)Information technology(IT)Remote work vulnerabilitiesExternal Network85%Prevention of a
64、ttacks 56%Detection of attacks 29%Response to attacks Companies need to consider evaluating their existing cybersecurity practices,potential impact of attacks and start making necessary investments to strengthen their ability to prevent,detect and mitigate the emerging threats across their cloud and
65、 IoT infrastructure.2023 Executive Compass FOR supply chain&MANUFACTURING19Monetize your digital opportunities in manufacturing.Technology and new shifts in the world have unleashed a decade worth of digital transformation on manufacturers in less than a couple of years.There is a dire need to start
66、 digitizing and automating the supply chains&business processes.As a digital&data innovation partner,helps manufacturers unlock the following opportunities to solve current problems,improve supply chains and automate the processes.Our customers realize significant ROI in a matter of weeks,not months
67、 or years.RapidopsDigital Twin&AIDigital TransformationDigital Platforms2023 Executive Compass FOR supply chain&MANUFACTURING20Digital TransformationManufacturing is dynamic and complex,with many players,processes,and human dependencies.While the executives are bought into the vision and want to dig
68、itize the businesses,these initiatives are not yielding the expected ROI because of the lack of sufficient talent,technology,and time.Rapidops is helping global brands to rethink and reshape their businesses with next-gen digital strategy,innovation,and automation.We help our customers create platfo
69、rms and solutions that digitize processes,offer personalized experiences,and deliver operational efficiencies at all levels in a matter of weeks,not months.Digitize ProcessesImprove efficiencies by replacing old,paper-based,and human-driven processes with automated operations.Unlock new opportunitie
70、s by re-imaging existing legacy systems&interfaces.Legacy ModernizationCIO at A Large Printer CompanyI have brought Rapidops in for massive digital transformation projects at my last three companies(all different industries)and will continue to do so.I am impressed with the exceptional quality,exper
71、tise,and speed they brought to the table.Cloud EnablementEmbrace the power of Cloud platforms and DevOps automation to deliver faster,reliable,and more scalable products in record time.Robotic Process AutomationsUpgrade operations and reduce costs by automating manual processes with Robotic Process
72、Automation(RPA)and AI.Digital Transformation StrategyCreate a future-proof strategy,roadmap,and working MVP that delivers the tangible impact that you need in less than 6 weeks.2023 Executive Compass FOR supply chain&MANUFACTURING21Ready to Deploy Platforms&SolutionsWith the rise of eCommerce,direct
73、-to-consumer(D2C),and connected experiences,the executives are under pressure to start creating value by quickly launching new digital initiatives.Rapidops advanced platforms and ready-to-implement solutions are helping manufacturing companies to address their digital opportunities in record time an
74、d costs.Each of the following platforms is meticulously designed,scaled,and secured to fit each customers unique needs.Leverage the power of IoT and AI to monitor your operations,detect exceptions and automate timely responses.rapid IIOTIndustrial IOT Platform Powered by AIDeliver personalized sales
75、 and marketing experiences to your customers with an award-winning customer management and engagement platform.salesmate CRMSales and Marketing Automation Platformrapid DELIVERYSeamlessly deliver products at your customers doorstep with an end-to-end fulfillment and delivery solution.Multi-Channel L
76、ast-Mile Delivery Platformrapid COMMERCEMaximize ROI by creating the right platforms and digital products to enhance customer experiences.Direct-To-Customer eCommerce for B2C&B2B22Digital&Resilient Supply ChainsTechnology is disrupting manufacturing.Creating a“digital”twin of the“physical”supply cha
77、in can enable companies to analyze,optimize,and transform their entire value chain.Such capability is non-negotiable for executives to survive and thrive in the competitive market.Rapidops is uniquely positioned to not only help our customers through this entire journey but also solve the many techn
78、ology and business challenges along the way.Together with our customers,we integrate the data and use analytics&ML to unlock ROI worth millions with the following immediate opportunities:Inventory OptimizationReduce costs by monitoring,optimizing,and re-ordering the inventory stock level based on th
79、e consumption patterns and actual demand.Supplier IntelligenceGenerate recommendations to improve supplier performance and reliability by monitoring dimensions such as costs,quality,and risks.Supply Chain OptimizationIdentify new opportunities to make better sourcing decisions,improve services,reduc
80、e costs,and minimize the time required to deliver finished products.IIOT Exception HandlingProactively track the status of your assets,vehicles,and finished products to detect exceptions and issues using IoT data.Production OptimizationMonitor the status of plants&assembly lines in real-time and use
81、 prescriptive recommendations to avoid production disruptions.S43536Low Water Level!S83461High Temperature!2023 Executive Compass FOR supply chain&MANUFACTURINGRapidops Inc.is one of the fastest-growing digital products and services companies in the USA.We partner with leading companies of all shape
82、s and sizes to transform their businesses and industries with our advanced digital products,software,and services.Rapidops offers digital solutions to turn global challenges into innovation-led opportunities-from rethinking business models to optimizing operations and enabling modernization.We impac
83、t millions of lives daily,solve tough problems,and empower businesses to thrive in the digital age.To know more about Rapidops services for manufacturing and supply chain industry,please visit or contact us at.https:/ Tryon Street,Suite 1600,Charlotte,NC 28202-0213Phone:+1 704-761-4007United States Headquarters397 Bedford Highway,Suite 323 Halifax NS B3M 2L3Phone:+1 782-400-5242Canada Headquarters501,Satyamev Eminence,Science City Rd,Ahmedabad 380060Phone:+91-70434 70009India HeadquartersRapidops Inc 2023About Rapidops