Christian Titze
If you’re a supply chain leader responsible for technology transformation, you must prepare for the impact of disruptive technology trends on people, business and IT.
Supply chain technology is seen as a source of competitive advantage, even a competitive differentiator, with organisations investing in strategic technologies in support of new business and operating models.
Start by identifying where it’s best to innovate and invest in new processes and technologies to remain competitive in your market. Seek feedback and ideas from stakeholders who can suggest if and where these technologies could be applied to produce better business outcomes.
The top eight
Gartner has identified a list of top eight trends for supply chain technology with broad industry impact. Review the list and identify how these technology trends can help your organisation seize new business opportunities or solve existing business problems. Pilot small projects to determine whether the potential benefit of the technology trend is worth the risk and required investment in new skills, capabilities or services needed to apply the trend to your business.
With all the hype around disruptive technologies it can be tempting to start exploring a trend before validating whether it can address a current business challenge or opportunity. First assess your company’s risk culture together with maturity stage, to determine your readiness to explore and possibly adopt strategic offerings. Risk-tolerant or risk-exploiting firms should explore technologies on this list now, while risk avoiders should wait.
“Conversational systems will drive the next big paradigm shift in how humans interact with the digital world.”
So, in no particular order:
1) Artificial intelligence
Uses for artificial intelligence (AI) in the supply chain are emerging, particularly to identify potential risk exposure. The main goal is to offer people new insights, without being explicitly programmed, based on identified patterns in large datasets from the enterprise, customers, suppliers or even the business ecosystem. These solutions may also predict future risks.
While there’s still hurdles to overcome, early adopters report promising benefits from limited scope pilots across the supply chain. Adopting these technologies improves decision making through augmenting users’ abilities or by automating certain supply chain processes. It also enables users to dedicate more time and talent to strategic network design, capacity planning or other high-impact activities.
2) Advanced analytics
The impact of advanced analytics – which spans predictive and prescriptive – on supply chain is significant. Predictive analytics are a powerful competency that enable companies to be proactive and take advantage of a future opportunity or mitigate or avoid a future adverse event. Prescriptive analytics, on the other hand, can improve decision making in functional areas like supply chain planning, sourcing, logistics and transportation. More importantly, it can be deployed to improve end-to-end supply chain performance because a course of action can be recommended that best manages the trade-offs among conflicting functional goals.
Benefits of advanced analytics include better quality, cost savings, uninterrupted customer service or bigger market share. Adoption can drive supply chain process redesign, with processes that fully relied on human judgement that can now be heavily powered with predictive and prescriptive analytics.
3) Internet of Things
The Internet of Things (IoT) is the network of physical objects that contains embedded technology to communicate and sense or interact with their internal states or the external environment. Adoption is growing in select supply chain domains, but rarely as part of a complete end-to-end supply chain process for now. One exception is the air and defence industry, where planes have thousands of sensors and data is leveraged in the extended supply chain.
Potential uses are in sourcing, manufacturing, logistics, demand management and services. Some manufacturers for example, are assessing the business value of expanding beyond their current use of operational technology. Logistics groups already use sensors to track assets or containers, and are now examining the additional benefits of IoT opening them to an internet-based world.
4) Intelligent things
Gartner describes intelligent things as having the ability to operate unsupervised for a defined period to complete a task. Intelligent things — such as autonomous vehicles, drones and robotics — will make their initial impact across a wide spectrum of asset-centric, product-centric and service-centric industries, particularly for their ability to do physical work with greater reliability, lower costs, increased safety and higher productivity.
Companies will also be able to shift goods faster, which may then pose a challenge for restocking and supplying demand. The ability for organisations to assist, replace or redeploy their human workers in more value-adding activities creates potentially high — and occasionally transformational — business benefits.
5) Conversational systems
Conversational systems will drive the next big paradigm shift in how humans interact with the digital world. They’re most recognisably implemented today in virtual personal assistants (such as Siri, Google Assistant and Amazon Alexa), in chatbots and virtual customer assistants. These systems can handle discovery questions and offer solutions without any human involvement.
Conversational systems can go as far as enabling transactions, handling payments, ensuring delivery and providing customer service. In warehouse operations, for example, industrialised ‘transactional voice’ technologies support the structured activities of frontline workers using speech recognition and/or speech synthesis technology to drive transactional activities, such as order, carton or item picking.
6) Robotic process automation
Robotic process automation tools offer potential ways to automate all or some stages of manual rule-based processes that were previously not automated. If applied to the right supply chain processes, they can reduce costs, speed up various manual tasks, eliminate keying error and link applications.
The types of processes organisations have applied robotic process automation tools to include elements of business partner onboarding, claims handling and processing, or regulatory compliance reporting. With early adopters in the finance and insurance industry, we now see other industries including supply chain taking advantage. The tools have proven to be very effective in simple uses, mainly where a third party in the supply chain will not provide an API or other means for automated data integration.
7) Immersive technologies
Immersive technologies, such as virtual reality (VR) and augmented reality (AR), are part of a new wave of computing devices that transform the way individuals interact with one another and with software systems. Supply chain businesses can use this technology to enhance their customer and employee digital experiences.
Uses from a variety of industries exist, such as repair and maintenance in manufacturing, logistics and warehousing — assisting with visual recognition of faulty equipment and providing visual overlays of repair instructions. It’s also being used for new product introduction and collaboration in heavy industry, manufacturing or field services, particularly for equipment design planning and review; machine and vehicle route planning; long distance person-to-machine collaboration; or helping remote technicians in real-time when encountering unknown problems.
8) Blockchain
“Supply chain management is a ripe territory for blockchain because of the distributed, multi-enterprise nature of complex global value chains.”
Blockchain technology, better known as distributed ledger, is a shared, immutable ledger for recording the history of transactions. Supply chain management is a ripe territory for blockchain because of the distributed, multi-enterprise nature of complex global value chains that routinely conduct business among multiple parties. Certain highly decentralised functions are prime candidates, such as smart contracts or traceability and authentication.
Blockchain offers promising opportunities to address issues such as efficiency improvements in transactions and interactions. Some early pilot projects include Maersk Line, which is sharing shipping data on a blockchain to enable multiple parties to settle upon insurance terms in less time. Walmart is also using blockchain to track packages of mangoes from farm to store shelves in the US, enabling visibility into the multiple stakeholders in the supply chain and supporting food traceability.
Blockchain is far off being mature, however, with only experimental uses so far, so be careful with this much hyped technology.
Christian Titze is a research vice president at Gartner. He focuses on supply chain management (SCM), enterprise resource planning (ERP) and wider application of technology in supply chain. For more information, visit www.gartner.com/supplychain.