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The Future Of The Digital Supply Chain

With advances in technology and a growing demand for improvements, the supply chain is changing rapidly with requirements often outside of the traditional IT structure

16Feb

Traditionally, supply chains were simple; the transportation of goods from A to B, with cost efficiency as a key performance factor. However, regardless of the industry, everything from consumer goods to building materials to freight operations, supply chains are evolving to become customer-centric. Products need to be moved faster and more efficiently, real time visibility and seamless exchanges are now a top priority, and consumers expect the highest level of service at all points of the chain.

The supply chain is attempting to meet the changing consumer demands by utilizing technology and widening its scope outside the internal chain. However this expansion is slowly increasing the responsibilities of supply chain management, and the implementation of new technology is putting additional pressure on IT departments.

In my review of 2016, I noted that we have seen a significant increase of enterprise mobility throughout the year, particularly within the Transport and Logistics sector. With businesses understanding the need to remain at the forefront of technology, additional time and resources were invested into learning how the latest technology could improve and transform the supply chain. Organizations within the sector have already begun trialling GPS, beacons, enterprise apps, weight tracking devices, drones and driverless cars. The choice of technology available is huge, with more opportunities coming to market continually.

Although technology will continue to evolve throughout 2017, we’ll see a much bigger focus on the data the devices collect and how it can be fed back into the supply chain to further improve it. The next 12 months will be about utilising technology and putting a structure in place to use data. Key factors will be…

The IoT

The biggest disrupter of logistics by far is the IoT. Gartner predicted that we’ll see a 30% rise in Internet connected devices by 2020 that 'will significantly alter how the supply chain operates'. With the biggest impact being on in-transit visibility, it will play a key role in providing real-time data on identity, location, movements, handling activity and even temperature. These devices come in the form of Bluetooth tags, passive and active RFID tags, and near-field communication (NFC) tags, which can be used for a range of functions. IoT will be responsible for bringing the entire ecosystem together; inventory, warehouse and fleet management, and provide stakeholders with real-time actionable data to make better decisions and save more time and money.

Big Data

Supply chains have always been driven by statistics and performance indicators, however the datasets we’re creating today are much larger, unstructured and diverse, often referred to as Big Data. As mentioned above, an abundance of information will be created by using devices to monitor everything within the supply chain, from individual transits and batch consignments to warehouse environments. Businesses need to invest time and resources into managing how data moves between devices and communicates with database platforms in a secure way. The key challenge for 2017 will be to understand how to structure this data, interpret it and turn it into actionable insights to improve the supply chain.

Real Time Proactive and Automated Responses

Access to real-time data will be the driver towards improved customer service within the industry by enabling companies to make proactive decisions and create automated responses. Using systematic rules, actions can be set up against specific criteria within a dataset, such as; a driver using his enterprise app to mark a delivery as success, which immediately updates the database and triggers an automated email to the customer confirming a successful delivery. On the other end of the scale, a collection truck uploading a photo of a blocked road onto the database as a potential risk for a late collection, which automatically alerts the customer service team who can proactively call the end location to discuss alternatives. Real-time data allows organizations to see an issue before it arises as well as automating many of the time consuming tasks, improving customer service, and reducing downtime.

Automation and Machine Learning

The word automation can be linked to two changes within the supply chain; one of which we’ll see in 2017, the other will take a few more years. Although investments in driverless vehicles and drone deliveries will continue to increase, they are still a way off. We’re talking about the use of machine learning to analyse the state of the supply chain, and recommend or automatically execute plans to meet customer requirements. With the help of machine learning, companies can model bespoke algorithms which will learn from specific scenarios and intelligently refine the model to produce the most successful result without any human interaction. Although implementing effective algorithms for planning and optimizing processes will take time, the impact on an organization's supply chain will be huge and it will be key in pushing the sector forward.

Because of the extended chain and integration of new technology, it’s important that IT remain a key role within the digital supply chain. Over the next 12 months, organizations need to ensure that the abundance of data is not only kept secure but managed in the correct way and turned into useful insights. More responsibility will be placed across an organization and key performance metrics will be extended to cover IT efficiency, operations, staff productivity, and customer satisfaction.

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