05 Dec Supply Chain Technology Top 10
So what is the Supply Chain Technology Top 10? What is on the agenda for 2020? The supply chain planning market is changing rapidly. According to Gartner (2019a), it is even in the process of redefining itself. And as we already noted in our previous post on the Supply Chain Challenges 2020, companies are facing a wave of changes, such as ongoing digitization, globalization, market volatility and disruption and a range of new technologies. In this contribution we present our Supply Chain Technology Top 10.
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Three key areas of innovation
How to get a grip on these trends in technology and enablers in the supply chain? Supply chain leaders need to test and pilot these new technologies and consider how their technology tools and organizations need to evolve, as they make their plans for the coming year. A great tool to monitor and prioritize technology that supply chain leaders can use is Gartner’s Hype Cycle for Supply Chain planning (2019) that presents the next-generation Supply chain technologies Gartner (2019a, 2019b). We definitely recommend this to keep track of the emerging technologies. In addition we used the excellent research by Furr&Shipilov (2019), Butner, K, (2018), McCrea, B., (2019) to compose a list of technologies and cases that we used in our interviews with our clients. Basically to get an idea on which initiatives are being adopted and tested given the maturity of the company. Roughly speaking we identified three important areas that companies are focusing on:
- Digitization of the supply chain and hereby enabling a platform for collaboration with internal partners, suppliers and customers.
- Visibility, real-time information and demand sensing
- Advanced Analytics and BI capability
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By no means are we trying to duplicate the hype cycle but we do see distinct difference in technologies that are already being used and tested, and technologies that are still nascent. In the figure below the output of our survey is presented. Number one in our ranking is the process of digitization of the supply chain and hereby enabling collaboration within the company but also with suppliers and customers. Advanced Analytics, Machine Learning & AI, Demand Sensing and Advanced Planning & Optimization seems to be well established. Then there are five technologies that are winning importance but still seem to be emerging: NLG, Digital Twin, RPA, Block Chain and IOT.
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Supply Chain Digitization (1)
There is an ongoing digital transformation that will dominate the supply chain the coming year. This digitization brings new opportunities for innovative business models and is already impacting production systems and supply chains. Combined and connected, these technologies will result in new opportunities to create value across multiple dimensions. As supply chain leaders set their objectives and strategies for 2020, digitization should be a priority. As it will fundamentally change supply chains and enable the new technologies on the horizon.
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Advanced analytics (2)
Another driving force in supply chain technology is the adoption and deployment of advanced analytics. Augmented, real time or near-real time in areas such as dynamic pricing, product quality testing and dynamic replenishment is becoming more and more important. The availability of supply chain data provides the ability to extrapolate the current environment to better understand future scenarios and make profitable recommendations.
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Adopt ML&AI (3)
Machine Learning (ML) based Artificial Intelligence (AI) can support an organization’s desire for supply chain automation. The level of automation could be semiautomated, fully automated or a mix, depending on the circumstances. Through self-learning and natural language, AI solutions can help automate various supply chain processes such as demand forecasting, production planning or predictive maintenance. Along with automation comes augmented human decision making, because the human is then no longer involved in the decision making [Gartner, 2019a]
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Demand Sensing (4)
Demand sensing provides real-time visibility and insights into channel demand and is enabled by advanced technologies that incorporates channel data into a set of strong foundation planning, modeling and analysis practices. Pattern recognition, performance analytics, simulation and optimization, and scenario management support short-term and midterm demand and account management.
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Advanced Planning & Optimization (5)
Gartner describes this design as the creation of a supply chain representation to understand as-is performance, simulate alternate options and optimize the network for chosen strategic objectives. Objectives include creating a network that is highly responsive to customer needs, cost efficient, flexible to handle demand variability, rationalized after an acquisition, or one that is resilient. Cloud-based platforms offer scalable and collaborative solutions that can cut the solution time for large and complex models.
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NLG (6)
Natural language generation (NLG) automatically creates linguistically rich description of insights found in data and combines natural language processing with machine learning and artificial intelligence to dynamically identify the most relevant insights and context in data (trends, relationships, correlations) (Gartner, 2019a, 2019b). NLG is considered by Gartner as one of the most promising applications to support data-driven decision making. With NLG, users can interact with these technologies in more intuitive ways.
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Digital twin (7)
A digital twin is basically a digital representation of the real-world system. Therefor, a digital supply chain twin is the digital representation of the relationships between all entities of an the supply chain. In terms of products, customers, markets, distribution centers/warehouses, plants. It is in sync with the real-world supply chain and increases the quality and speed of decisions.
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Robotics (RPA) and Autonomous things (8)
These two tools basically will speed up processes, cut costs, eliminate errors, speed and link applications. The rapid explosion in the number of connected, intelligent things has given this trend a huge boost. Robots, drones or autonomous vehicles enable new business scenarios and optimize existing ones.
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Blockchain (9)
Although supply-chain-related blockchain initiatives are nascent, with solutions in early stages of development, interest has accelerated significantly during the past year, making blockchain a top trend for supply chain leaders to watch in 2019 and also in 2020. Blockchain is aligned to potentially fulfill critical and long-standing challenges presented across dynamic and complex global supply chains that traditionally have held centralized governance models. Current capabilities offered by blockchain solutions for supply chain include a loose portfolio of technologies and processes that spans middleware, database, verification, security, analytics, and contractual and identity management concepts.
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Internet of Things (IoT) (10)
IoT adoption is growing in select supply chain domains, but rarely as part of a complete end-to-end supply chain process. Some manufacturers are assessing the business value of expanding beyond their current use of operational technology. The IoT could well have a broad and serious impact on the supply chain (like improved asset utilization, service increase, end-to-end performance, or visibility and reliability).
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