The Next Generation Supply Chain

Author PhotoBlueGrace Logistics - May 11, 2017

The demands of today’s marketplace are shifting, growing, and evolving more rapidly than ever. Shippers have increasing expectations of carriers and their supply chain as a whole, requiring not only increased efficiency, but also flexibility and adaptability to respond to the events and obstacles that regularly occur in the ever shifting marketplace.

Shippers have increasing expectations of carriers and their supply chain as a whole

The next generation model of the supply chain is the combination of adopting automation and infusing it with digital technology for enhanced performance. While these new technologies are creating flourishes in innovation and creating opportunities to cut costs along the supply chain, it is also driving the rate of change, creating both disruption and pressure to remain competitive.

These new technologies are creating flourishes in innovation and creating opportunities

MHI has just released it’s 2017 Annual Industry Report which had 1,100 respondents from both supply chain leaders and manufacturers alike.  The focus of this report is to identify which technologies will have the most transformative potential on the future of the supply chain.

The Top Nine Technologies according to the MHI report are:

  • Cloud Computing and Storage
  • Robotics and Automation
  • Sensors and Automatic Identification
  • Predictive Analytics
  • Wearable and Mobile Technology
  • 3D Printing
  • Driverless Vehicles and Drones
  • Inventory and Network Optimization Tools
  • Internet of Things (IoT)

The Role of Big Data

Without a doubt, one of the largest focal points of new technology is data, whether it be the ability to access large amounts of data or to pinpoint certain factors that can affect the supply chain. The Internet of Things (IoT) was among the top five of the nine transformative technologies. While a number various technologies are essential to the collection and utilization of this data, the overall culmination from the IoT is becoming the lynchpin in technology growth. While 24% of the respondents currently use the IoT, 55% have plans to adopt it in the near future and within the next two years growing to 92% by 2023.

The Internet of Things (IoT) was among the top five of the nine transformative technologies

“On Demand” and “Always On” Supply Chain Models

In addition to the emergence of new technology, the industry is also looking at a different way of perceiving the supply chain. Service on demand, for example, is reflective of customers being more comfortable with technology and online transactions. Additionally, this spurs the increasing demands that customers are placing on businesses in terms of shorter service cycles, lower costs, increased transparency, as well as corporate responsibility. Even logistical feats such as next day delivery are losing their lustre as customers are now looking for an even shorter turnaround time. The only way to maintain such fluidity and flexibility in the supply chain will be by embracing new technology.

The only way to maintain such fluidity and flexibility in the supply chain will be by embracing new technology.

If the on-demand supply chain model wasn’t enough, those same growing expectations for customer service and quick turnaround are establishing the need for a supply chain to be “always on.” Order confirmations, updates, tracking information, order fulfillment, and proof of delivery are just a few of the expectations that are now being placed on shippers and carriers alike. In order to meet these requirements the supply chain must be efficient, transparent and, for lack of a better word, flawless. To that end, the concept of the ‘always-on’ supply chain can run around the clock in order to keep ahead of the daily challenges that face any supply network.

Robotics to Lead the Charge 

While data and information are important to predictive and reactive supply chain models alike, robotics will be setting the pace for the rest of the industry according to the report. The industry is currently looking at a 37% adoption rate for automation and robotics. However, that figure is expected to grow to 54% over the next two years, up to 71% within the next five years. Given that the cost of robotics is dropping while the implementation is getting easier, the rise in industry adoption rates is understandable. As menial and repetitive tasks are being doled out to the robotic workforce, human employees are given the flexibility to implement operational changes that allow a business to become more efficient while simultaneously cutting down costs on redundant labor.

The industry is currently looking at a 37% adoption rate for automation and robotics

As the technology continues to change and evolve at a rapid pace it will be up to logistics decision makers to keep ahead of the curve and stay competitive. While different manufacturers, shippers, and carriers each have an opinion as to which of the emerging technologies will be the most vital, it will undoubtedly be a combination of all of them that will provide the key to success.

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