What’s the Future of Supply Chain Management?

By: on September 20, 2016

Do you remember the old episodes of The Jetsons, where one of the characters would order something on their proto-computer, and in an instant, a package would be delivered via tube to their home?

That’s the dream—for consumers and supply chain professionals alike. And that dream is not too far off: Amazon, for example, offers one-hour delivery for tens of thousands of products in select cities.

What was once considered science fiction—near instant delivery times—is practically here already.

Of course, shortened delivery times are just one component of the supply chain of the immediate future. Here’s what else is on the horizon—and what you should be paying attention to.

The ‘Algorithmic’ Business: Finding Meaning in Big Data

The success of a business and its supply chain is increasingly determined by the business’s ability to react quickly to market forces and make smart decisions based on hard data. That’s obvious—what’s less obvious is how to do this.

In a report titled “Supply Chain 2025: Planning Today for Tomorrow,” by Michael Burkett and John Johnson, research advisory firm Gartner recommends that businesses “[embrace] the technology and analytics that will fuel algorithmic business, and build capabilities to apply the knowledge encapsulated in algorithms to data stream at speed and scale and shift thinking from ‘big data’ to ‘big answers.’” (This content is available to Gartner clients.)

For the past decade or so, large businesses have been obsessed with collecting and storing data about their customers, their own internal processes, external market information and so on. The problem is that many businesses have found themselves paralyzed by the amount of data they have collected.

And, it’s not enough to simply collect data—it’s important to formulate questions the data can solve.

To do that, these businesses need to invest in analysis. That means hiring data scientists and investing in advanced business intelligence tools, so they can gain a competitive edge.

The Internet of Things Makes Its Way Into the Supply Chain

We’ve written before about how internet of things (IoT) technologies are being used extensively in the realm of fleet management. These tools assist with everything from fuel monitoring to tracking driver behavior and vehicle maintenance.

The applications for IoT in the broader world of supply chain management are practically limitless.

“This dramatic increase in connectivity will have major implications for businesses and the supply chains that support them. The IoT is already providing value for companies,” says research advisory firm Gartner in the report mentioned above.

“In manufacturing, IoT is used to predict asset maintenance needs, while sensors allow logistics service providers to monitor the environment of sensitive packages in order to predict potential supply issues while still in transit,” the report continues.

Other applications for IoT in the supply chain include:

  • Enhanced traceability. Businesses will have greater insight into where their shipments are, where they came from and when they will get to their destination. This is vital for regulatory compliance, improved customer service and better visibility overall.
  • Loss protection. When everything is tracked with internet-connected sensors, it’s much more difficult for products to go “missing” while in transit. When loss does occur, it’s easier for the business to determine when and where it happened.

Smaller World Means Bigger Opportunities

As developing countries, such as India and China, grow richer there are more opportunities for businesses to source and sell their products to these emerging markets. But while there are more opportunities, there is also more competition.

Businesses seeking to expand into new markets will have to consider not only how those potential customers differ from existing customers, but also the limitations of the physical infrastructure and local bureaucracies when it comes to importing and exporting their products.

To maintain a competitive supply chain in the future, businesses will need to do their due diligence and market research to determine the most cost-effective ways of getting their products in front of new customers.

Destination: Automation

Driverless vehicles are slowly creeping their way onto our roads and highways, and will no doubt have a tremendous impact on supply chains as they become more prevalent. Automation doesn’t stop there, however. Consider Amazon’s automated warehouse robots:

Amazon’s automated warehouse robots


While having a fully automated warehouse system costs a pretty penny, we will likely see this technology become more accessible for small and midsize firms.

Software vendors that specialize in warehouse management systems (WMS) are also making greater strides to integrate their platforms with newer hardware systems that assist in automating warehouse processes.

For example, some WMS platforms integrate with warehouse racking systems, such as Mecalux.

The end goal of all these advancements in warehouse technology is to reduce human labor costs while making the picking and packing process more efficient. Warehouse automation is no doubt an area where we will see considerable advancements in the next decade.

Key Takeaways

Supply chain management is changing rapidly. For growing small and midsize businesses, the key is to recognize these big trends and consider which ones you can feasibly implement.

  • Invest in analytical infrastructure. As the supply chain becomes more digitized, you’ll need trained data scientists versed in supply chain management, as well as advanced business intelligence tools, to help you make informed decisions.
  • Look for ways to automate. While you might not be able to afford a sprawling automated warehouse operation like Amazon’s, you might be able to find cheaper automation solutions (e.g., less advanced warehouse management systems). These systems can reduce labor costs and make your supply chain more efficient and profitable.

What do you think the future of supply chain management will look like? Email me your thoughts at forrest@softwareadvice.com.

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