A Call to Arms for the Supply Chain Revolution

Stephen DeAngelis

May 9, 2017

One of our mottos at Enterra Solutions® is “Revolution not Evolution.” Bill DuBois, Director of Marketing Content at Kinaxis, appears to agree with that motto as it pertains to the supply chain. “The time has come to adopt new operating models that make data visible across functional and organizational boundaries,” he writes. “The time has come for a revolution.”[1] Revolutions generally result from a confluence of factors creating conditions that allow for a break from the past. DuBois notes, “The world is changing — new technology, globalization, shifting markets, changing demographics, global warming — you get the idea.” Although supply chains have been around for millennia, Lora Cecere (@lcecere), founder and CEO of Supply Chain Insights, notes they are not timeless.[2] She explains the adjective “timeless” means “not affected by the passage of time or changes in fashion” and she concludes, “Supply chains are anything but timeless.”

 

Conditions are Ripe for a Supply Chain Revolution

 

The coming supply chain revolution is being driven by new technologies — most of which have been labeled revolutionary on their own. They include: cognitive computing; Internet of Things (IoT); blockchain; predictive analytics; robotics; additive manufacturing and self-driving vehicles. Edwin Lopez (@EdwinLopezT37) and Jennifer McKevitt (@mckvt), assert, “Supply chains are ripe for disruption.”[3] Lengthy articles could be written about each of the technologies mentioned above; however, a brief description of how each of them could impact the supply chain should provide ample evidence that a revolution is coming.

 

Cognitive Computing

Today’s cognitive computing platforms leverage state-of-the-art technologies to help industrial age supply chains transform into digital supply chains. Deloitte analysts insist digital supply networks must “integrate information from many different sources to drive production and distribution.”[4] Cognitive computing platforms are excellent data integrators because they can handle both structured and unstructured data. Data integration is important because decision makers across an enterprise need to be working from a single version of the facts. Cognitive computing systems can help automate data gathering processes across the network and leverage advanced analytics to both monitor and improve business processes. Cognitive computing platforms can also provide alerts to decision makers when anomalies occur and serve up actionable insights in a number of areas to help improve both efficiency and effectiveness.

 

Internet of Things

The IoT is a network of networks primarily fostering machine-to-machine communications. The combination of IoT and cognitive computing will enhance the following types of activities: Predictive Maintenance; Self-Optimizing Production; Automated Inventory Management; Track and Trace; Fleet Management; and Demand Response. Sufian Farrukh (@sufian_farrukh), an Online Security Analyst at PureVPN, asserts the IoT may have its greatest impact in the area of warehousing. “With the latest supply chain technology and IoT,” he writes, “a ‘smart’ warehouse will serve as a hub to boost efficiency and responsiveness throughout the supply chain. This will involve the role of wearables (smart watches) to sensors, smart equipment and other IoT devices.”[5] He concludes, “IoT is the way of the future, not just for the supply chain areas discussed but for all aspects of work & life. As IoT aspires to become the norm and necessity, the companies embracing it today will have a significant competitive advantage over those relying on legacy systems and traditional supply chain processes.”

 

Blockchain

Analysts at Business Insider Intelligence note, “A number of companies are rolling out new technology solutions that pair blockchain with connected sensors to provide history, visibility, and security into their supply chains.”[6] They add, “As more and more devices create mass quantities of data and companies aim to leverage the IoT to create and employ those data, security and accountability will be major hurdles. The incorporation of blockchain databases into IoT solutions could be one way to secure those data and ensure that devices are accurately registering and reporting information. Blockchain can provide a level of accountability and surety that traditional databases cannot, as no employee can potentially cover up a mistake with a database change or shift blame to another party.”

 

Predictive Analytics

William Vorhies, President and Chief Data Scientist at Data-Magnum, writes, “Predictive analytics are increasingly important to Supply Chain Management making the process more accurate, reliable, and at reduced cost. To be at the top of your game as a supply chain manager you need to understand and utilize advanced predictive analytics. … Advanced predictive analytics is beginning to make a difference in successful supply chain management.”[7] The 2017 MHI Annual Industry Report found that respondents believe predictive analytics is going to be one of the most disruptive technologies in the supply chain field topped only by robotics and automation.

 

Robotics and Automation

Commenting on the MHI report, Lopez and McKevitt, stated, “The fact robotics and automation remains at the top of the list is hardly surprising but also shows respondents — be it manufacturers, service providers or distributors — continue to see materials handling solutions as a powerful way to improve productivity. Inventory management is a pivotal piece of the supply chain puzzle, after all.” Robotics and automation lie at the heart of the Fourth Industrial Revolution (or Industry 4.0). In his opening remarks at the 2016 meeting of the World Economic Forum in Davos, Switzerland, Klaus Schwab, Executive Chairman of the WEF, stated, “We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before. We do not yet know just how it will unfold, but one thing is clear: the response to it must be integrated and comprehensive, involving all stakeholders of the global polity, from the public and private sectors to academia and civil society.”[8]

 

Additive Manufacturing

“A massive shift is taking place around the world,” write Mitch Free (@mitchfree) and Rick Smith, co-founders of Fast Radius. “Three-dimensional printing is enabling meaningful productivity improvements in manufacturing and supply chains at startups and Fortune 500 companies alike. … Industrial 3D printing is the Second Wave of production technology. It is just beginning to disrupt a $14 trillion global manufacturing industry that is based on mass production. But this is merely the first chapter in an epic novel, a story we’ve seen play out time and time again. 3D printing is the catalyst for the inevitable Great Disruption of mass production. It’s not a prediction, it’s a pattern.”[2] They believe 3D printing will be as impactful as the Model T.

 

Autonomous Vehicles

Just how disruptive autonomous vehicles will be to the supply chain remains to be seen. Some analysts believe driverless trucks will displace millions of supply chain workers, while other analysts believe the trucking industry is too complicated to be fully automated. According to Lopez and McKevitt, driverless vehicles and drones have been increasingly mentioned by MHI survey respondents with 80% growth over the past three years. Although there is the potential for autonomous maritime shipping, there doesn’t seem to be as much enthusiasm in that sector as in other logistics areas.

 

Summary

 

It takes little imagination to see how the technologies discussed above are converging to create conditions ideal for a revolution. Everything (i.e., people, processes, and technologies) will be affected by the coming revolution. Are you ready?

 

Footnotes
[1] Bill DuBois, “It’s time for a revolution of the supply chain kind,” 21st Century Supply Chain Blog, 14 April 2017.
[2] Lora Cecere, “Supply Chain: Anything But Timeless,” Supply Chain Shaman, 3 April 2017.
[3] Edwin Lopez and Jennifer McKevitt, “Report: Robotics, predictive analytics the most disruptive supply chain innovations,” Supply Chain Dive, 12 April 2017.
[4] Adam Mussomeli, Doug Gish, and Stephen Laaper, “The rise of the digital supply network,” Deloitte University Press, 1 December 2016.
[5] Sufian Farrukh, “How Internet Of Things Will Revolutionise The Supply Chain?Huffpost Tech Blog, 12 September 2016.
[6] BI Intelligence, “Blockchain and IoT devices could revolutionize the supply chain,” Business Insider, 28 November 2016.
[7] William Vorhies, “Predictive Analytics in the Supply Chain,” Data Science Central, 25 November 2015.
[8] Klaus Schwab, “The Fourth Industrial Revolution,” Longitudes, 19 January 2016.