Optimizing the supply chain with analytics and IoT (2023)

Georgia-Pacific relies on SAS® Viya® on Amazon Web Services to improve equipment efficiency, reduce downtime, optimize shipping logistics and predict customer churn

Early in the COVID-19 pandemic, when people started stockpiling toilet paper and other consumer goods, manufacturers faced a barrage of unique challenges. Beyond grappling with how to protect employees from an invisible and mysterious virus, manufacturers had to work out how to meet surging demand while parts of the supply chain crumbled around them.

As one of the world’s leading makers of tissue, pulp, packaging, building products and related chemicals, Georgia-Pacific found itself at the center of this supply chain breakdown. With 73% of US grocery stores reporting empty shelves in April 2020, the company saw demand for toilet paper and many other of its products increase sharply during the height of the pandemic.

Because manufacturers can’t build new plants overnight to cope with surging demand, the Atlanta-based company with around 150 manufacturing facilities turned to its tried-and-true optimization mechanism – analytics.

“We used advanced analytics to help increase the productivity of our facilities,” says Steven Bakalar, Vice President of IT Digital Transformation at Georgia-Pacific. “During the pandemic, we used analytics to improve our overall equipment efficiency by 10%, which helped us get more products in stores.”

For Georgia-Pacific, boosting productivity is only part of its optimization story. As household demand for paper products and cleaning supplies rose during the pandemic, demand for these products dropped at hotels and businesses, which suddenly saw less foot traffic. Again, the company turned to analytics to optimize shipping logistics.

Indeed, Georgia-Pacific’s analytics capability was essential during the pandemic. But before the world even heard of COVID-19, the manufacturer had become an expert at using data and analytics to digitally transform its business. This is their analytics story.

Our facilities that use these tools have experienced a 30% reduction in unplanned downtime.Optimizing the supply chain with analytics and IoT (1)Steven BakalarVice President of IT Digital TransformationGeorgia-Pacific

Optimizing processes

Georgia-Pacific relies on SAS advanced analytics and artificial intelligence (AI) solutions powered by SAS Viya on Amazon Web Services (AWS).

Roshan Shah, Vice President of Collaboration and Support Center Operations, oversees manufacturing analytics at Georgia-Pacific. He and his team of more than 70 employees scrutinize manufacturing data to look for efficiencies, as even small improvements can translate to millions of dollars in savings.

According to Shah, data volumes at Georgia-Pacific grew by five times over the past year. “Every day we generate about a terabyte of data. All of it goes through ourmachine learningmodels to tell us how we can operate better.”

One major output of this analysis is optimizing processes. From plywood to corrugated boxes to paper napkins, Shah and his team run more than 15,000 machine learning models to calculate the optimal production settings based on current business needs.

“The advanced analytics enabled by SAS allows us to find the optimal balance of speed and quality to maximize profitability,” Shah says. “We’re constantly pushing the envelope of what’s possible with analytics.”

Process optimization doesn’t stop there for the manufacturer. With highly complex facilities, complications can arise. Say, for example, step four of a 10-step manufacturing process is disrupted due to wet materials. Machine learning models will recalculate the next-best production process to save products from being downgraded or scrapped altogether.

Elsewhere in facilities, cameras are used on production lines, allowing employees to watch for problems. With SAS, Georgia-Pacific recently began applyingcomputer vision, a form of AI, to these cameras. This technology automatically detects problems, allowing for corrective action to be taken.

(Video) Georgia-Pacific | Optimizing the Supply Chain with Analytics and IoT | SAS Customers
The advanced analytics enabled by SAS allows us to find the optimal balance of speed and quality to maximize profitability. We’re constantly pushing the envelope of what’s possible with analytics.Optimizing the supply chain with analytics and IoT (2)Roshan ShahVice President of Collaboration and Support Center OperationsGeorgia-Pacific

Preventing downtime

Pandemic or not, downtime plagues manufacturers. Georgia-Pacific also has a solution to reduce downtime, thanks to SAS.

Using real-time data from 85,000 vibration sensors, Shah and his team can intervene early when their calculations predict an increased likelihood of part failure or electrical problems. By combining this information with historical data on asset performance, they can inform machine operators what to change to optimize the life of the asset.

Automation capabilities of the SAS platform also help reduce downtime. The company receives alerts when something like a bearing, motor or valve is likely to fail, allowing it to bundle those repairs into a planned maintenance event. Repairing machinery in a controlled environment also allows technicians to operate more safely and efficiently.

“Before we began using these tools, our technicians spent a majority of their time looking for assets that were either failing or about to fail. Now they spend that time fixing problems instead of searching for them,” Bakalar says. “It’s a dramatic change in how they work.”

The efficiency gains the manufacturer has seen are impressive. “Our facilities that use these tools have experienced a 30% reduction in unplanned downtime,” Bakalar says.

Additionally, building analytic models using today’s experienced engineers helps to share knowledge with tomorrow’s new hires. “With SAS, we can essentially codify the knowledge that employees would acquire over their careers and use it to get new employees up to speed quickly,” Bakalar says.

(Video) Supply Chain Optimization

Because SAS makes it easy for people to do their own modeling, it’s translated into millions of dollars in value for us.Optimizing the supply chain with analytics and IoT (3)Tim BerrymanHead of Decision AnalyticsGeorgia-Pacific

Delivering products on time and in full

As a data-driven organization, Georgia-Pacific applies analytics across a wide spectrum of use cases – not just manufacturing. On the commercial side, the company uses analytics to recommend pricing, determine the best day of the week to ship a certain item, and predict customer churn.

One area that particularly excites Tim Berryman, Vice President of Decision Analytics, is the Internet of Things (IoT). Many Georgia-Pacific manufacturing facilities are in remote locations, where high-speed connectivity often isn’t reliable or cost-effective. As such, the company uses SAS for edge computing – processing that takes place at or near the “edge” of a network, where IoT data is generated or collected – which speeds up decisioning.

IoT also plays a role in creating value for our customers. For example, by putting IoT sensors in smart dispensers, Georgia-Pacific can predict stockouts of items like soap and paper towels before they occur, which improves the customer experience and reduces the cost to inspect restrooms to see if they are out of stock.

On-time and in-full (OTIF) delivery is another key focus area for the Decision Analytics group. Supplying some of the world’s biggest retailers with consumer packaged goods brings huge commercial opportunities, but also stiff penalties for late or incomplete deliveries.

Yet again, analytics drives this capability at Georgia-Pacific. To ensure OTIF deliveries, Berryman’s team uses SAS to detect if an order is likely to be delivered late. When this happens, analysts can develop algorithms to quickly find a solution, and automate the flow of insights back to key stakeholders so the company can deliver on its contracts.

“These tools allow us to catch supply chain issues early and calculate the best course of corrective action to ensure deliveries arrive on time and in full,” Berryman says.

Empowering frontline employees and saving millions of dollars

Accessibility is a core reason why Georgia-Pacific selectedSAS Viya. Not only does this manifest in data scientists being able to code in multiple languages, it also means people who aren’t necessarily analytics experts can benefit from the powerful technology as well.

With infinite analytics projects and finite resources, Georgia-Pacific believes strongly in empowering citizen data scientists – people who create analytical models but whose primary job functions are outside the field of analytics. Georgia-Pacific has many employees with deep domain knowledge but little analytics experience. With the simple user interface and automated AI of Viya, anyone with a curious mind can be trained to make faster, better decisions.

(Video) Analytics to optimize enterprise and IoT applications

“The Viya platform enables us to easily train employees on how to use machine learning models,” Berryman says. “They can quickly crunch billions of records and start making more valuable business decisions.”

“We also have a strategic partnership with AWS, and the combination of SAS with AWS provides us the necessary flexibility and scalability to put analytic capabilities in the hands of users across the organization,” Bakalar adds.

“Previously, these projects would have involved a large data science effort within Georgia-Pacific or handing it off to outside partners,” Berryman says. “Because SAS makes it easy for people to do their own modeling, it’s translated into millions of dollars in value for us.”

Partnering with the SAS Education team, Georgia-Pacific has trained more than 150 citizen data scientists, a number that is expected to grow as the company continues to integrate analytics into its operations. For Bakalar, this uplift benefits the company and consumers alike.

“For us, ticking up productivity translates into tremendous value,” Bakalar concludes. “And for consumers, whether it’s lumber going through a kiln or paper towels coming off a production line, the manufacturing quality is better and there’s more supply. Ultimately, SAS helps us make better products and get them to market faster.”

Photos courtesy of Georgia-Pacific.

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The results illustrated in this article are specific to the particular situations, business models, data input, and computing environments described herein. Each SAS customer’s experience is unique based on business and technical variables and all statements must be considered non-typical. Actual savings, results, and performance characteristics will vary depending on individual customer configurations and conditions. SAS does not guarantee or represent that every customer will achieve similar results. The only warranties for SAS products and services are those that are set forth in the express warranty statements in the written agreement for such products and services. Nothing herein should be construed as constituting an additional warranty. Customers have shared their successes with SAS as part of an agreed-upon contractual exchange or project success summarization following a successful implementation of SAS software. Brand and product names are trademarks of their respective companies.

(Video) An IIoT Use Case - Supply Chain Optimization

FAQs

How IoT can improve the overall supply chain process? ›

Leveraging IoT in supply chain management makes it much easier to locate your goods, track their movement, identify where and when they are delayed in transit and plan alternative routes, monitor their storage conditions (temperature, humidity etc.), and estimate when they will arrive at a specific location.

How analytics can improve supply chain? ›

By analyzing customer data, supply chain analytics can help a business better predict future demand. It helps an organization decide what products can be minimized when they become less profitable or understand what customer needs will be after the initial order.

How do you optimize a supply chain process? ›

10 Tips for Optimizing Your Supply Chain Process
  1. Outsource Business Activities. ...
  2. Establish Communication Between Suppliers and Retailers. ...
  3. Use Mobile and Internet Technology. ...
  4. Use Centralized Management Software. ...
  5. Use a Multichannel Approach for Demand and Supply. ...
  6. Ensure High-Quality Products. ...
  7. Plan Ahead.
13 Jan 2020

What is optimization approach in supply chain analytics? ›

Supply chain optimization is the adjustment of a supply chain's operations to ensure it is at its peak of efficiency. Such optimization is based on certain key performance indicators that include overall operating expenses and returns on the company's inventory.

How IoT can help supply chain in resolving problems in the business industry? ›

Supply Chain Management with IoT: A Huge Leap Toward Resilience
  • Improve supply chain visibility and transparency.
  • Increase adaptability to changes in demand or supply.
  • Master your data by leveraging AI and Big Data.
  • Achieve new levels of risk management.

How is Internet useful in efficient management of supply chain management? ›

The Internet enables the connection of Supply Chain partners through Web technologies and allows SCM networks achieve new capabilities: real time information sharing for collaborative planning, forecasting and replenishment, visibility and management of SC event in real time, SC integration, and collaborative ...

What is the role of analytics in improving a supply chain explain with an example? ›

An example of predictive supply chain analytics is to use historical inventory data to determine a pre-set time to reorder more inventory while keeping inventory levels and holding costs optimized.

What is supply chain analytics and why is it so important to businesses? ›

Supply chain analytics refers to gaining insight and extracting value from the large amounts of data associated with the procurement, processing, and distribution of goods. Supply chain analytics are important for companies to fully digitalize, build an autonomous supply chain and enable real-time decision making.

What are the benefits of supply chain optimization? ›

Optimize Your Supply Chain
  • It improves the lines of communication. ...
  • It increases access to information. ...
  • It ensures that those rules that dictate the management of your business are firm and present. ...
  • It reduces costs. ...
  • It increases everyone's sense of control. ...
  • It streamlines points of contact.
30 Jun 2009

What are the four steps of optimization? ›

Luckily, those changes don't need to be terribly time consuming, and you don't have to improve too much at once.
...
Verify - Make your your results are statistically significant.
  • Step One: Examine. ...
  • Step Two: Implement. ...
  • Step Three: Test. ...
  • Step Four: Verify.

What factors are important for improving supply chain? ›

The major factors identified as supply chain structure, inventory control policy, information sharing, customer demand, forecasting method, lead time and review period length. The optimum selection of parameters of these factors improves the supply chain performance.

What are the four major goals of process optimization? ›

Define: The first step to is define the processes that require optimization. Measure: The second step is to measure and identify how the process performs. Analyze: The third step is to analyze how you can optimize the process. Improve: The fourth step is to improve the process.

What is optimization analysis with example? ›

Optimization analysis is a method of optimizing the subject under a variety of predefined physical constraints, for example: frequency, weight, strength, thermal etc.

What is analytics and optimization? ›

The Data Analytics and Optimization track focuses on using large data sets, computer models, and optimization methods to support data-driven decision-making.

What are the three components of supply chain analytics? ›

The three types of supply chain analytics are “descriptive”, “predictive”, and “prescriptive.” Each plays a different role in helping you manage your inventory. Modern supply chain software lets you exploit all three.

What is Internet of Things IoT and how the IoT could improve the supply chain? ›

In the supply chain, Internet of Things devices are an effective way to track and authenticate products and shipments using GPS and other technologies. They can also monitor the storage conditions of products which enhances quality management throughout the supply chain.

How can we use IoT to provide better products and services? ›

By gathering all their data in one place, manufacturers can make intelligent decisions and design more efficient processes. This allows them to meet the rising demand for high-quality, customised goods at a lower cost, with faster turn-around times. IoT isn't simply about gathering data.

What are the top 3 benefits your company aims to achieve by implementing an IoT solution? ›

What are the advantages of IoT in business?
  • Lower operating costs. A fleet of IoT devices can be cost-effective because it helps businesses optimize their workflows and lower operating costs by providing real-time information. ...
  • Increased productivity and workplace safety. ...
  • Better customer experiences. ...
  • More business insights.
29 Mar 2022

Why is IoT important in supply chain? ›

Benefits IoT brings to supply chain management and logistics

The data helps them increase actual output, improve the quality of raw materials, decrease energy consumption, and ensure profitability. Manufacturers introduce IoT solutions to monitor manufacturing operations and equipment condition in real-time.

How can technology improve supply chain management? ›

Quickly Note Warning Signals, Solve Issues and Forecast Problems. Used to measure world events in real time, machine learning and big data tools can forecast supply chain issues and provide early warning signals as things start to go wrong, such as weather negatively impacting logistics in some regions.

What are the benefits of using information technology in a supply chain? ›

Value of Information Technology in Supply Chain Management
  • Increased Control Over Production. ...
  • Better Inventory Management. ...
  • Increased Collaboration Between Supply Chain Partners. ...
  • More Effective Order Tracking and Delivery.
12 Aug 2014

How can analytics improve performance? ›

How can data analytics improve business management?
  1. Optimize workflows to improve employee productivity and engagement. ...
  2. Monitor data to enhance cybersecurity. ...
  3. Streamline operations to be more efficient. ...
  4. Track consumer behaviors to enrich customer experiences. ...
  5. Monitor market trends to launch new products and services.
2 Jun 2022

How do you overcome the supply chain challenges with big data analytics? ›

Prioritizing the development of a big data analytics strategy will help your organization overcome these supply chain challenges:
  1. Better Predict Customer Needs and Wishes. ...
  2. Improve Supply Chain Efficiency. ...
  3. Better Assess Supply Chain Risk. ...
  4. Improve Supply Chain Traceability.
19 Feb 2016

What tools are used in supply chain analytics? ›

Top Supply Chain Analytics: 50 Useful Software Solutions and Data Analysis Tools to Gain Valuable Supply Chain Insights
  • Intellestra by Voxware. ...
  • KPMG Spectrum Third Party Intelligence. ...
  • PeopleSoft Supply Chain Analytics. ...
  • Birst Supply Chain Analytics. ...
  • Halo Supply Chain Analytics and Business Intelligence Software.
1 Mar 2022

How big data analytics improve the efficiency of supply chain management? ›

Big data systems can also help to prevent potential disruptions based on variable data, such as weather changes or traffic delays. This creates a comprehensive control system for effective supply management from start to finish while reducing waste and preventing product issues.

What is the importance of optimizing? ›

The purpose of optimization is to achieve the “best” design relative to a set of prioritized criteria or constraints. These include maximizing factors such as productivity, strength, reliability, longevity, efficiency, and utilization.

What is the importance of process optimization? ›

Process optimization leads to working more efficiently. You eliminate unnecessary steps and automate steps in the process to save time, reduce errors and avoid duplicate work.

What is the importance of supply chain performance? ›

Supply chain management is important because it can help achieve several business objectives. For instance, controlling manufacturing processes can improve product quality, reducing the risk of recalls and lawsuits while helping to build a strong consumer brand.

Which optimization method is best? ›

Top Optimisation Methods In Machine Learning
  • Gradient Descent. The gradient descent method is the most popular optimisation method. ...
  • Stochastic Gradient Descent. ...
  • Adaptive Learning Rate Method. ...
  • Conjugate Gradient Method. ...
  • Derivative-Free Optimisation. ...
  • Zeroth Order Optimisation. ...
  • For Meta Learning.
15 Jul 2020

Which technique is used for optimization? ›

Newton method and sequential quadratic programming are examples of local optimization methods. Global optimization methods are heuristic-based methods.

What are optimization strategies? ›

Optimization strategy is used to search and optimize the transform parameters for the maximization of the similarity value between the warped source image and the target image.

What is the key to a successful supply chain? ›

Focus on consumer needs, flexibility and digitalization

A successful supply chain should be focused on customer needs and add value to the customer's business. It should be adaptable and able to change as the customer's business model changes.

What is the most important step of a supply chain? ›

#1: PLANNING

The first step in every supply chain management process is planning. To come up with the best possible way to fulfill the end requirement is the first strategic aim of the process.

Why optimization is important in business? ›

The optimization plays very important roles especially in business because it helps to reduce costs that can lead to higher profits and to success in the competitive fight. There are various optimization methods used: classical ones and methods using soft computing.

What are the three elements of optimization? ›

Every optimization problem has three components: an objective function, decision variables, and constraints.

What is optimization in your own words? ›

: an act, process, or methodology of making something (such as a design, system, or decision) as fully perfect, functional, or effective as possible specifically : the mathematical procedures (such as finding the maximum of a function) involved in this.

What are the two types of optimization? ›

Optimization is divided into different categories. The first is a statistical technique, while the second is a probabilistic method. A mathematical algorithm is used to evaluate a set of data models and choose the best solution.

What are the five steps in solving optimization problems? ›

Five Steps to Solve Optimization Problems

It is: visualize the problem, define the problem, write an equation for it, find the minimum or maximum for the problem (usually the derivatives or end-points) and answer the question.

What is the purpose of analytics? ›

Analytics defined

Quite simply, analytics helps us see insights and meaningful data that we might not otherwise detect. Business analytics focuses on using insights derived from data to make more informed decisions that will help organizations increase sales, reduce costs, and make other business improvements.

What are the 4 steps of data analytics? ›

That's why it's important to understand the four levels of analytics: descriptive, diagnostic, predictive and prescriptive.
  • Descriptive analytics.
  • Diagnostic analytics.
  • Predictive analytics.
  • Prescriptive analytics.

What are the 3 primary types of analytics? ›

Descriptive, predictive and prescriptive analytics.

What do you mean by supply chain analytics? ›

Supply chain analytics is the analysis of information companies draw from a number of applications tied to their supply chain, including supply chain execution systems for procurement, inventory management, order management, warehouse management and fulfillment, and transportation management (including shipping).

What are the key issues in supply chain analytics? ›

Challenges in Supply Chain Analytics
  • Time, Cost and Effort. Analytical software tools are expensive to acquire and maintain; it takes a long time to realize return on a huge investment in software and resources. ...
  • Experts Needed. ...
  • Isolation / Silos.

What are the four 4 main elements of a supply chain? ›

Integration, operations, purchasing and distribution are the four elements of the supply chain that work together to establish a path to competition that is both cost-effective and competitive.

How can technology improve supply chain? ›

Quickly Note Warning Signals, Solve Issues and Forecast Problems. Used to measure world events in real time, machine learning and big data tools can forecast supply chain issues and provide early warning signals as things start to go wrong, such as weather negatively impacting logistics in some regions.

How has technology improved supply chain management? ›

Because technology and automation for the supply chain utilize real or near real-time data, companies have greater visibility and can track activities better. This helps improve collaboration and communication with key vendors and reduces cost through better vendor contract management.

How technology can help supply chain operations? ›

By harnessing a combination of technologies like AI, machine learning, and predictive analytics, companies can automate warehouse operations, improve delivery times, proactively manage inventory, optimize strategic sourcing relationships, and create new customer experiences that increase satisfaction and boost sales.

How is IoT used in manufacturing to make the process more efficient and effective? ›

IoT makes it possible for manufacturers to reduce operational costs and create new sources of revenue by: Optimizing asset management and inventory management, Reducing machine downtime and. Enabling more agile operations and more efficient energy use.

What is the impact of digital technologies on supply chain management? ›

Digital supply chain and supplier management automation can be leveraged to collect and process real-time information automatically, thereby eliminating the slow, time-consuming effort of manually gathering, entering, and updating data.

What are the three most important technologies in supply chain currently? ›

Let's take a look at the technologies that are making the biggest impact on supply chains around the world: Cloud technology and cloud-based commerce networks. Internet of Things. Artificial Intelligence & Machine Learning.

What are the goals of supply chain technology? ›

The main goal of supply chain management is to manufacture products and deliver them to the end consumers. However, providing the product is not the only goal; the quality of that product also matters. You should provide consumers with a product that offers the best value possible.

Which technology will enhance the efficiency of supply chains? ›

The Internet of Things (IoT)

As a result, more and more aspects of manufacturing will become connected and integrated to deliver insights and inform supply chain management.

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