By Greg Kefer
The pace of innovation in the global supply chain continues to increase and there are no signs it will slow down. The “Amazon Effect” is changing performance expectations not just in retail, but across all industries. Executives constantly ask operational teams why they are unable to operate at the speed of the ecommerce giant. While one or two-day delivery may not be realistic in manufacturing supply chains, weeks or months is no longer acceptable either.
New innovations are making hardware, software, and connectivity more accessible and cost effective than ever before. Technology has become fully embedded across functional areas in the global supply chain. Just go to any supply chain conference; the agenda will be filled with speakers focused on technology-related topics. Robots, self-driving vehicles, electric trucks, blockchain, the internet of things (IoT), and new mobile-enabled categories are all poised to explode onto the scene in one form or another. It is hard to predict what is a passing fad, but one thing is certain, innovation in the supply chain—even if it is just experimental—is no longer a luxury, but a necessity.
Supply Chain Trends
When thought leaders talk about what is next, a few themes dominate the agenda. While this is by no means an exhaustive list, the following themes will be played out in some form over the coming months and years, resulting in practical use cases for the industry to rally around.
Internet-connected devices will become more engrained in supply chains. Look no further than what is happening with home appliances: refrigerators, light switches and thermostats are now connected to the internet and controlled by mobile applications (apps). Whether it is a new factory line machine, a new truck, a new distribution center, or even a yard gate, the supply chain is not immune to the IoT phenomenon. New machines are already transmitting granular status and performance information to the central command centers that companies can use to monitor their supply chains. The constant flow of real-time, detailed information about what is really happening will give teams a level of clarity that should help them to adjust quickly and ensure inventory flows are as smooth as possible.
Blockchain continues to capture the imagination of the industry at large, and we should see some practical use cases emerge. Blockchain has promise, but it is still years away from mass adoption in the supply chain arena. Forrester predicts that we will not see commercially viable solutions until 2025. Regardless, CIOs will get excited, and some companies will engage with IT vendors on projects to prove where blockchain best benefits the supply chain. Expect to see a few viable blockchain concepts emerge because many existing companies and new startups will be trying.
Sharing economy solutions will keep disrupting logistics services. Companies like Airbnb have proven that a well-designed mobile app has immense potential. Uber and others are setting up driver networks to deliver packages to consumers by using their personal vehicles. As these move out of the planning stages and provide concrete evidence of success, expect to see this concept expanded to larger vehicles like personal vans and trucks, with the goal of taking on bigger loads. Advanced mobile apps and off-the-shelf sensors will provide better visibility and control than most shippers can get today.
Supply chain visibility will become a dedicated technology category covered by analysts. For the past two decades, visibility has been lumped in with other supply chain tech categories such as enterprise resource planning, transportation management systems, warehouse management systems, global trade management, supply chain planning, and sales and operations planning.
Gartner has been writing about Supply Chain Visibility (SCV) for the past few years as a “framework,” which means SCV is inching toward a dedicated technology category. Companies are even issuing RFPs for the capability, and mature implementations are demonstrating significant return on investment. Leaders in the supply chain management community discuss whether a Gartner Magic Quadrant for SCV could become possible in the near future.
Supply Chain Technology
If companies do not embrace change now, they could find themselves disrupted into bankruptcy. In some respects, supply chain excellence can protect established market leaders from highly innovative upstarts because the art of making and shipping products around the world still requires a degree of “old world” processes that are not going away. However, companies would be wise to invest or test the concepts above—and others—in order to build a level of innovation DNA to adapt with the changing times.
Amazon and Uber may be generating all the noise right now, but there could be many other, highly innovative companies that are gearing up to take on the established market leaders, based on a technology-first operational model. By utilizing some of the above technological capabilities, perhaps your company could become one of them. SW
Greg Kefer is the VP of marketing at Infor.
Mar2018, Software Magazine