Supply chain management has come down a long road.
Supply chain management is a multifaceted undertaking that extends beyond the scope of a single organisation. What was historically viewed as a cost centre with the main purpose of moving stock from A to B, has today evolved into a critical enabler of business. In the past supply chain management key objectives revolved around reducing operational costs within certain areas of but not viewing it as a collective set of activities aimed at delivering value to the end customer – which today is the holistic take on the sector.
But where is it headed?
As with all sectors of commerce, in the age of digital transformation and disruption, technology is the driver of change. New digital technologies that have the potential to take over supply chain management entirely are already disrupting traditional ways of working.
Research guru Gartner* notes that supply chain leaders today must examine how emerging technologies such as AI, robotics and blockchain will affect their business, and decide where and how to invest. Companies are scrambling to put digital foundations in place that can capture, analyse, integrate, access, and interpret high quality data. This refers to the real-time data that fuels process automation, predictive analytics, artificial intelligence, and robotics with the capacity to not only change the entire shape and face of the supply chain industry but are the technologies that are predicted to soon take over the sector.
An article in Select Hub** suggest that robots may become the biggest co-worker in the warehouse of the not too distant future. These new robots will be nothing like the industrial robot of the past but are autonomous mobile robots which are intelligent and can follow humans through a complex warehouse as the employee selects items for an order (called picking in the trade) and can also be used to deliver goods to and from people. They are, as such, collaborative robots that interestingly support, but do not replace, humans.
However, other sources suggest that within five to ten years, the supply chain function may be obsolete, replaced by a smoothly running, self-regulating utility that optimally manages end-to-end work flows and requires very little human intervention***.
This is hardly the stuff of science fiction movies – it is already well underway. However, great advances often bring bigger challenges and these developments are no exception to that fact. So while technology has been a crucial enabler of collaboration within the supply chain these advances will inevitably be accompanied by risks – one of the biggest being the predicted increase in cybercrime as new technologies such as AI and IoT are integrated into the arena.
The shape of the Supply Chain of the future
Therefore, the supply chain of tomorrow will look quite different with increased: visibility; automation and sharing of information, across partners up and down stream. The focus will be on how to use gathered data to improve operational performance. In the past this was a retrospective procedure with companies examining collected data and based on what the findings revealed, decisions taken to address any issues. However, this approach often led to time delays and loss of business with obvious negative financial impact.
Today there is a shift to introduce artificial intelligence (AI) and machine learning into the supply chain which allows companies to be more proactive and change strategies for the future in real time, and in so doing, capitalise on opportunities that may arise. Automation and advanced manufacturing are already having significant impact on supply chains and will continue to do so by reshape countries that have traditionally been the engines of global supply chains. Moreover, labour force and the total cost of sourcing, especially in industries that are suited to automation, will also be affected.
In conclusion data is becoming a key asset that drives organisational strategy. Going forward increasing emphasis will be placed on how organisations process data and how it can be used to predict and mitigate future risks to the operational success of the business.
By Shaun O’Brien, CEO of CQuential WMS