A supply chain is rarely a fixed system. Rather, it’s an ever-evolving ecosystem of decisions. A good supply chain innovates often and pivots on a dime. Especially now that supply chain management (SCM) technology is a major factor - supply chains these days are almost never static. Something in the chain is always being improved, improvised, or interchanged.
So the moral of the story here today will be: keep up or fade away.
You’re well aware by now of the immediate and ubiquitous effects that modern technology has on supply chain performance in recent years. Well, buckle up because it’s only going to get better.
Manufacturing processes inherently desire the next innovation in tech, and we’re quite certain the supply chain management technology trends you’re about to read will satiate that desire while bettering your bottom line.
Before we dive into the trends, let’s make sure we’re all on the same page when discussing supply chain management.
Supply chain management is the handling of the lifecycle of a product, from procurement of the workforce, sourcing raw material, to production, all the way until the final product reaches the consumer or retailer, and every little nook and cranny in between. Every employee, every truck, every robotic arm, every delivery of lumber, every uniform, every maintenance expense, every warehouse - everything that is necessary in the process of producing a product - it’s included in the supply chain.
When you analyze your own company’s supply chain, we encourage you to visualize your strengths and understand your weaknesses. Because with a bevy of new tech ready to rapidly innovate your procedures, there’s absolutely an option to streamline your supply chain. You may just not know it yet.
If you want to stay relevant and ensure you’re maximizing margins, adopting SCM technology is a must.
“Big data will have a major impact on logistics in the years ahead because it will create safer supply chains around the world,” Joseph Giranda, Director of Commercial Relations at CFR Rinkens, said. “This will give [businesses] the opportunity to communicate more efficiently with suppliers all over the world as well as automate certain responsibilities in order to reduce human error.”
Mr. Giranda touched a crucial point there. Notice he said, “...automate certain responsibilities” not “automate everything in your entire business.” The supply chain tech trends you want to adopt are the ones that fit your business in the right way. Implementing brand new 5G-capable technology means nothing if you don’t have the connectivity infrastructure in your area. Investing in robotic processes means nothing if you don’t have the skilled employees to operate them.
Technology is especially crucial with the advent of advanced manufacturing. Automation and integration in the bleeding-edge operations of advanced manufacturing are rapidly improving as every new wave of technology is implemented.
The Impact of Technology on Supply Chain Management
The supply chain of today is wildly different from the supply chain of 30 years ago.
Think about it: a couple of decades ago, when you wanted to know where the truck with your raw materials was, you had to check the time log and just hope it shows up on time. Today, you can see specifically where it is on the road, and find out that it’s going to show up at 8:54 a.m. and not the 9:15 a.m. that’s on the time log.
That’s a generalized example, but it holds true as an allegory for so many facets of the supply chain. We have the technology today to assess the actual state of our supply chains, down to the minute and the ounce. No guessing - all knowledge. And that technology is only getting better.
“In the digital world, demand has only gone up and these are the perfect conditions for a smaller and more flexible business to grow.” Dimitris Tsapis, a Supply Chain Manager at Coara, said.
“That is the most important asset – a unique competitive advantage. Being ahead of the curve in some special way, like tech-wise, conceptually, or simply by a measure of productivity is always vital for any business, especially in crisis situations like this.” he said.
The following benefits are some key takeaways from the power of technology in our supply chains:
- Greater Efficiency in Supply Chain Processes - Well right out of the gate, it’s easy to understand that any automated system is more efficient than a manual one. But these mobile methodologies also allow for more complete data capture as well, which then results in an improved process by storing and analyzing the data for targeted areas of improvement. A working example is a handheld mobile device that provides wireless and instantaneous proof of delivery or real-time monitoring of transportation status. This helps managers understand operational anomalies, which creates a maximally efficient supply chain.
- Improved Supply Chain Communication - When everyone is on the same page, business is just better. Improved technology in the supply chain allows for a tighter communication stream between high-level decision-makers and the factory floor workers, and everyone in between. As supply chain processes become more advanced, making sure the entire team is on the same page is a priority. This collaborative effort results in better morale, efficient business processes, and ultimately, higher customer success.
- Adhere to Government Requirements Easier - The Department of Transportation requires electronic logging devices for all drivers and fleets, as of 2017. Fleets are facing regulation crackdowns on multiple fronts - meaning they need to turn to more advanced routing software and better logistical management software to recoup time and money that may be spent adhering to government regulations. This is a great example of how to build supply chain resilience.
- Small, But Mobile, Carriers Stand A Chance - One of the best outcomes of the technological advancements, is that a more accessible playing field is now the norm. If you’ve got the smarts, but not the brawn, you can still play and earn customer demand. Especially during and after the value chain was re-imagined because of the pandemic, small organizations with fewer investments into their systems will be able to easily integrate new supply chain tech into their operations. They won’t be burdened with massive payments to overhaul a system just to reach a point of profitability. Mobile resource management is no longer a pay-to-play type of game.
Future Trends in Supply Chain Management Technology
In the fourth Industrial Revolution - the one built around the internet and massive technological innovations - the pace of business changes almost daily. As a supply chain manager, you need to know how the industry is adapting to new technology, as well as which ones are serious players and which ones are just hype. How to build strength in your supply chain? You’ve got to understand your own system completely because these trends are not one-size-fits-all. What works for one business might be a complete waste of money for another business.
We have spent the last few weeks gathering intel from trusted names in the industry to better inform this list. Some of the top supply chain, logistical, and manufacturing minds in the world lent us their time to discuss the future of supply chain management and the trends you should be paying attention to. Some of these trends are well underway and implemented widely, some of these trends are on the cusp of a boom, and some of these trends have yet to show any valuable ROI. But make no mistake - all of these worldwide supply chain trends are here to stay. This is what the future of supply chain management looks like.
Supply Chain Trend 1: Paperless Warehouses
Information is only as good as what you do with it. With data capturing and analysis at an all-time high, how do SCM leaders leverage that data? One way to ensure you don’t leverage all your data properly is continuing to engage in the use of an antiquated tool: paper.
In the global supply chain, nearly 3,000 parcels are shipped every second. Read that again, and by the time you’ve done so - another 10,000 parcels are out the door. There’s no way this type of big data can be leveraged properly by paper. Inventory management software (inventory automation software) is available and will revolutionize your business operations.
Supply Chain Trend 2: Hyper Automation
This type of technology is all about other technology. What we mean by that is: hyperautomation is a way to mix and match the best of a wide variety of technology’s offerings. It's kind of like enterprise resource planning (ERP). Hyperautomation can take your legacy platforms and implement recently developed tools that will allow you to use some of what you’ve already invested in, while also accessing the world of now.
Single-use or disparate functions now have the chance at a new life given the power of hyperautomation. But buyer beware: hyperautomation is a generalized word. It means different things to different people. You must truly understand every nook and cranny of your supply chain and operations management before diving into hyperautomation.
Supply Chain Trend 3: Artificial Intelligence/Machine Learning
Don’t think of AI in supply chains as taking over your processes. Don’t picture robots doing tasks, or computers running storefronts. The realistic use, and the one that’s trending majorly upwards, is the use of AI platforms to analyze your current processes. Introducing an AI platform into your business will allow you to gather loads of old data that is still relevant, as well as incorporating real-time metrics.
Farming all the numbers of your business past and present will highlight your dark spaces of inefficiency and show you where to focus your time and money. The time of relying on the actual product to differentiate the company is over. Transforming demand planning, demand management, and maximizing your supply chain is a way to differentiate yourself from competitors that will create a margin you’ve never seen before.
“Senior leaders are starting to look at their supply chain not as a back-office operation that kept their business going but as a strategic advantage over competitors.” Iliya Rybchin, a partner at Elixirr, said.
“Companies that exploit [tech trends] can generate enterprise value from their supply chain. Everyone points to Amazon as the cliché example. Amazon’s strength is not amazing products or even good prices. Their strength is unquestionable mastery of bleeding-edge technology to deploy the world’s best supply chain. Other companies simply cannot compete – even though they may source better products at better prices.”
Supply Chain Trend 4: Autonomous Trucking
This one is tricky. Forecasting the autonomous trucking industry has proven to be a risky business. The ROI will be monstrous. But it’s a slippery slope to invest in because there really is no due date involved with this new supply chain technology. Once it's here though, the flow of goods and workflows of employees relying on logistics will never have been more profitable. Investments have poured in since 2015 or so, and while the technology is there - driverless trucks already exist and have completed road tests as early as 2019 - there are still a lot of hoops to jump through.
Extensive testing, pre-planned routes, and safety verification are all roadblocks for autonomous trucking. Companies like Starsky Robotics invested heavily into the trend but were too early, and their money dried up. But rest assured, when the time is right - autonomous trucking will dominate the industry. The ROI and sustainability are just too alluring to not succeed.
Supply Chain Trend 5: 5G
Although this is one of the most widely-known entities of new tech in the world, it’s not truly operational yet. The infrastructure is still being built, and the 5G wireless technology that promises wildly fast connectivity relies on devices that can handle the millimeter wavelengths (Example: if you have an iPhone 10 or older, your status bar will read ‘5G’ but that device is not compatible with 5G wavelengths).
While the benefits are obvious for the individual consumer - fast downloads, videos on demand, streaming anything anywhere - the benefits for manufacturing are not as clear-cut yet. This fifth generation of cellular connectivity is predicated on the ability to meet every device right where they are. The Internet of Things (IoT) has revolutionized information systems. IoT connects your freight to your warehousing to your data center to your CEO and everywhere in between. 5G is necessary to allow all devices in the supply chain to communicate in real-time. But the fact of the matter is - it’s not here yet. But it’s on deck.
Supply Chain Trend 6: Digital Supply Chain Twin
What if you could have every step in your supply chain measured, monitored, and duplicated onto a digital version - viewable from one source, where you can see the flow of capital from start to finish and alter anything you need in that chain? What if you could evaluate your supply chain with your own two eyes, all at once? Enter: digital supply chain twin. This trend is reliant on the workforce. Not anyone can build a digital model of your supply chain, and not anyone can operate that model.
But if you find the right person for the job, your entire mode of operation can be whittled down into a digital model by which you can manipulate, run tests, and maximize efficiencies. It optimizes supply chain strategies and cuts down on unwanted products, wasteful spots in the chain, and poor ROI. It’s one of the great trends in modern manufacturing that is currently being implemented worldwide. If this sounds right for you, talk to us. This is a supply chain technology you want to jump on immediately.
Supply Chain Trend 7: Blockchain in Supply Chain Optimization
Blockchain is a technological innovation that has been touted for years, but with no measurable impact to share. It’s just too far off, still. The idea behind blockchain is to improve transparency and traceability amongst vendors, and provide linked payments for partners after their role in the chain is complete. Its strength is that it’s viewable to everyone on the blockchain, and removes shady dealers. But it simply hasn’t found many suitors yet. It’s been described - in Forbes list of supply chain technology trends - as a “service in search of a solution.” But that’s not to say it isn’t being used at all - those who find a way to incorporate blockchain, have good results.
“[Blockchain] enables real-time transparency and sharing of one ledger of trusted facts. The magic is in the power of having one set of trusted facts and the removal of the expensive and time-consuming checking and reconciliation,” Louden Owen, an industry CEO, said.
Supply Chain Trend 8: Supply Chain Security & Governance
Track-and-trace solutions, advanced RFID capabilities, and smart packaging are emerging tech trends that will have major impacts on security, governance, and risk management for supply chain leaders and supply chain partners. This is a global trend that has its toes in the water but will dive head-first in the coming year-plus. Furthermore, accounting is an area of business that will soon be automated - allowing for less oversight, proper allocation of resources, and optimal governance of your supply chain. Supply chain risk just got a lot less risky, thanks to these emerging technologies.
Using Supply Chain Analysis to Incorporate Trends
Like we said earlier, information means nothing if you don’t know how to use it. You can aggregate all the data in the world, but if you can’t make sense of it - then it’s just numbers. A supply chain management analysis will take your current operating procedures and highlight strengths, weaknesses, and opportunities to incorporate new trends in the supply chain. It's the best way to get started on your supply chain planning journey.
These supply chain improvement initiatives are the key to turning your good business into a great one. It’s make-or-break time in the industry right now, and the companies that integrate the latest tech into their operations are the ones that will grab hold of market share and differentiate themselves from competitors. To learn more about the specifics of supply chain analysis, we offer a webinar on "How to Evaluate and Build Supply Chain Strength Today".
The Future of Supply Chain Management (SCM) Technology
The outlook of the supply chain’s future is digital. This digital transformation of the entire industry is imminent, and underway. Sure, the processes will always be physical. Consumers will always be carbon-based beings. The direction decided on by the leaders themselves. But the management of the supply chain? Technological innovations are currently revolutionizing the industry.
Hunches, gut feelings, and good thoughts are being paved over by accurate analysis, data-based decisions, and high tech.
Iliya Rybchin, of Elixirr, sums it up pretty perfectly by saying, “Deploying these technologies in a highly strategic way and weaponizing them against the competition is how companies, particularly in manufacturing, will win. I have seen smaller firms take significant market share from larger players simply through more effective supply chain solutions.”