INOSSEM VIEW
An interactive summary of the 2020 Annual Commemorative Special Issue, exploring the frontiers of business excellence and technological advancement.
Build a World-Class Enterprise
Strategies for supply chain, finance, and digital transformation.
Meet RPA, Meet the Future
The impact of digital employees and intelligent automation.
Digitalize Your Supply Chain
Best practices for MRO, planning, resilience, and control.
Decoding "Dual Circulation"
An analysis of China's evolving economic strategy.
How to Build a World-Class Enterprise
This section explores the foundational pillars for achieving world-class status. It covers the critical capabilities needed in supply chain management, the evolution of the finance function into a value creator, and the strategic importance of a forward-looking digital transformation plan aligned with national and industrial shifts.
Five Capabilities of a World-Class Material Supply Chain
For asset-intensive industries, managing the material supply chain (for MRO) is distinct and critical. Research reveals five common capabilities essential for excellence:
- Rapid Demand Perception: Quickly determining material needs by categorizing materials and aligning demand with market conditions and equipment plans.
- Intelligent Supply-Demand Balancing: Using advanced analytics and AI for multi-modal material matching and optimized planning, moving beyond simple reorder points.
- Globalized Sourcing: Developing sourcing strategies adapted to diverse regional market characteristics, from mature markets like North America to import-heavy regions in Africa.
- Efficient Warehousing & Logistics: Designing networked warehouse systems and leveraging IoT to manage internal logistics and avoid issues like "off-book" inventory.
- Full-Chain Cost Control: Visualizing and managing the total cost of the supply chain, including procurement, financing, and potential obsolescence, to achieve a reasonable overall cost structure.
IT Spending as a Percentage of Revenue
Gartner data shows a post-2014 inflection point where organizations embraced digital, increasing IT investment. The report recommends SOEs maintain IT investment at 1-2% of revenue.
The "14th Five-Year" Digital Transformation
The plan is not merely an IT upgrade but a comprehensive fusion of digitalization, networking, and intelligentization. Success depends on navigating key challenges and capitalizing on breakthrough opportunities.
The Tri-Element World
Informatization exists at the intersection of the physical world, human society, and information space, driven by three key processes.
Key Challenges
- Supporting Strategic Change: IT must support and lead organizational restructuring and business model shifts.
- Innovating Technology Application: Selecting mature technologies for the right business scenarios to solve real pain points.
- Breaking Through to Business Value: Leveraging technology to upgrade core business and create new revenue streams.
- Matching Information Capabilities: Overcoming bottlenecks in core systems through data governance and modern architectures like "middle platforms".
Breakthrough Points
- Data-Driven: Treating data as a new production factor to be mined for value.
- Platform Services: Building new productivity on cloud-based infrastructure.
- Business Interconnection: Connecting internal and external links to enhance value chain management.
- Business Model Innovation: Using technology to drive transformation towards servitization and ecosystem development.
- Organizational Enhancement: Upgrading IT leadership and professional staffing to drive change.
Meet RPA, Meet the Future
This section explores the rise of Robotic Process Automation (RPA) and the concept of a "digital workforce." It charts the evolution from basic task automation to intelligent process automation (IPA) and outlines the strategic considerations for enterprises looking to successfully deploy and scale this transformative technology.
Global AI & RPA Market Spending (Forecast)
The RPA market is a fast-growing subset of the overall AI technology landscape, indicating a strong trend towards adopting automated and intelligent solutions in business processes.
From Automation to Intelligence
RPA technology has moved beyond proof-of-concept to become a core part of enterprise strategy. The journey involves several key stages and considerations:
- The Need for Automation: Enterprises are shifting away from using skilled human resources for repetitive, rule-based tasks. RPA offers a non-invasive way to automate these processes, reducing costs and risks while improving efficiency.
- Evolution to IPA: The fusion of RPA with cognitive technologies like Machine Learning (ML) and Natural Language Processing (NLP) is creating Intelligent Process Automation (IPA). This allows bots to handle unstructured data and make simple judgments, moving from "digital assistants" to "cognitive digital employees."
- Strategic Implementation: Successful RPA adoption is not about technology alone. It requires a strategic approach, including:
- Identifying the right processes to automate.
- Reconstructing processes to maximize Return on Improved Performance (ROIP).
- Elevating RPA from departmental pilots to enterprise-level solutions governed by a Center of Excellence (CoE).
The Reality of RPA Deployment
Despite the hype, many companies are still in the early stages of their automation journey. Understanding the landscape is key to planning a successful scaling strategy.
According to a Forrester report on global RPA service providers, a majority of clients have deployed a relatively small number of bots. This indicates that while adoption is widespread, deep, enterprise-wide integration is the next major hurdle. This underscores the need for strategic guidance and a move from small-scale pilots to a comprehensive automation strategy managed by a dedicated Center of Excellence (CoE).
Bot Distribution at RPA Clients
Data shows over half of deployments consist of 10 bots or fewer, highlighting the opportunity for enterprises to scale their automation initiatives.
Digitalize Your Supply Chain
This section provides a deep dive into modernizing the supply chain. It addresses the unique challenges of MRO, the necessity of agile planning in an era of "black swan" events, and the technologies and strategies required for building a resilient, efficient, and data-driven supply chain ecosystem.
The Way of Agile Supply Chain Planning
In a volatile world, traditional, rigid planning fails. Agile planning is a rapid response system built on "Seven Parts Management, Three Parts Technology."
Seven Parts Management
The foundation of agility lies in mature management systems.
- Planning System: High-level decision committees and agile response mechanisms.
- Organizational Goals: Aligned KPIs across departments to prevent silos.
- Employee Development: Cultivating execution culture and high-value talent.
- Link Structure: Continuous optimization of the supply chain structure (e.g., warehousing networks).
Three Parts Technology
The enabler that unlocks the potential of management systems.
- Foundation Building: Strong master data governance and comprehensive information visibility.
- Technology Selection: Choosing technology based on fitness for purpose, not just novelty, using a structured approach.
Technology Selection Framework
Choosing the right AI technology depends on the problem's computational complexity and the uncertainty of its underlying mechanism. This framework helps guide the selection of appropriate tools for different industrial domain challenges.
Deep Learning
For extremely complex problems where the mechanism is unknown and experience cannot be used for judgment.
Machine Learning
For problems with relatively complex mechanisms that don't require massive data or computation.
Knowledge Graphs
For problems with higher computational complexity where principles and relationships are relatively clear.
Expert Systems
For problems with low computational complexity and a clear, well-understood mechanism.
Decoding "Dual-Circulation" Strategy
This final section examines China's "dual-circulation" economic strategy. It breaks down the concepts of internal and external circulation, highlighting the roles of economic resilience, global value chain restructuring, and the critical technological foundation required for enterprises to thrive in this new development pattern.
Internal Circulation
This pillar focuses on strengthening the domestic economy. Key aspects include:
- Economic Resilience: Leveraging China's vast domestic market and production capabilities to ensure sustained recovery and growth.
- Boosting Domestic Demand: Unlocking the potential of internal consumption as a primary driver of the economy.
- Supply-Side Innovation: Improving the quality and level of domestic supply to meet and create new demand, reducing reliance on external markets for key goods and technologies.
External Circulation
This pillar involves rethinking China's role in the global economy. It's not about isolation, but strategic integration:
- Global Value Chain Restructuring: Adapting to shifts in global supply chains and finding new, higher-value positions within them.
- High-Level Opening-Up: Continuing to engage with the global economy, attracting foreign investment, and promoting international trade in strategic areas.
- Technological Foundation: The strategy's success hinges on technological innovation to "unblock" circulation, with digital platforms like Innossem's providing the foundation for enterprises to connect seamlessly into both domestic and international value chains.