Supply chain technology is a difficult, exhilarating topic to cover in detail. The supply chain technology stack comprises hundreds, if not thousands, of individual technologies, and considering the growth of the Internet of things (IoT), there really is no limit to how much these transformative supply chain technologies may expand within the next 12 months. Supply chain managers will focus on several key supply chain technology implementations or considerations which will impact consumer spending habits, consumer-business interactions and performance measurement. We expand upon the supply chain technology trends we spoke about in the first part of this blog series, but let’s take a look at 5 more supply chain tech trends that will shape 2018.
Companies Will Levy the Power of 3PL-Based Technologies
Third-party logistics providers (3PLs) have been around for several years, and while 3PLs may have existing software suites, such as our very own transportation management system, the Cerasis Rater, many supply chain managers are still implementing in-house technology solutions that have severe capability limitations. 2018 will be the year in which more companies choose to leverage the power of 3PL-based technologies, including transportation management systems (TMS) but also other transformative supply chain technologies like a Warehouse Management System, a Yard Management System, a Labor Management System, all integrated together via APIs connected to the cloud with added extensions to handle automated cycle-counting or network optimization. While most brands have already integrated live system tracking, secure data exchange processes, and visibility and traceability throughout systems, the use of cloud-based technologies will begin to have a major impact on procurement processes as well, says Marc Wins of Procurement Academy.
The increasing power of Amazon will also be a driving force in the push for supply chain managers to adopt transformative supply chain technologies and take advantage of 3PL resources, asserts Amy Wunderlin of Supply & Demand Chain Executive. 3PLs have the technologies in place to handle both inbound and outbound freight management, as well as handle omnichannel order fulfillment, so they are the natural partner for companies looking to combat the Amazon Effect.
Supply Chains Will Develop and Take Advantage of Transformative Supply Chain Technologies, like Freight Sharing Apps
As explained by Kushal Nahata via Supply Chain Management Review, supply chains will begin taking advantage of disruptive technologies too. The dawn of drone delivery, having much hype over the last few years, is quickly approaching critical mass. Smart glasses are providing manufacturers and supply chain partners with information without the need to handle bulky order processing systems thru augmented & virtual reality, known as mixed reality, and the use of freight matching apps for full truckload moves are giving supply chain managers more ways to accomplish more without spending more.
It sounds confusing, but these transformative supply chain technologies tend to generate growth and increased profitability when used across a global scale by enterprises with complex supply chains or even domestic companies looking to gain efficiency which in turn leads to bottom line savings. Since these technologies, as adoption rates increase across the board, will allow those who fully adopt them to get out of the weeds of tactics and process, more businesses will then utilize the strategic mindset afforded by implementing transformative supply chain technologies to increasingly set services and products apart, pivoting to a mantra of increasing customer experience. Due to this focus on the customer, consumers will reward those who have taken the leap into supply chain technology implementation by making more purchases, thus increasing revenues. As a result of the increased demand in transformative supply chain technologies, service providers who either offer the technology themselves or perhaps work as a consultant to help supply chains implement these technologies properly, will need to step of their game to meet the desired outcomes of a fresh batch of new customers. Finally, supply chains who fully implemented and utilizing these technologies, will have a much stronger competitive advantage above companies that have not yet invested in such technologies as well.
Supply Chains Will Transform, Increasing Capacity of Production & Customer Experience Thanks to Transformative Supply Chain Technologies
How companies interact with consumers will evolve throughout 2018 thanks to these transformative supply chain technologies. Artificial intelligence (AI) can help consumers make decisions, and virtual reality has the promise of revolutionizing how companies design, develop, and produce products. The same is true with 3-D printing. This fundamental shift will result in increased competitive advantage among companies that use disruptive technologies, and cross-platform systems will rise to make existing disruptive technologies compatible with new and legacy systems, says Kasey Panetta of Supply Chain 24/7. This will create immersive experiences and enable the creation of digital twins for existing products, services and systems. Imagine a digital world that mirrors the real world. This gives developers and supply chain partners an opportunity to experiment with different scenarios and select the solution that will net the greatest savings and increase profitability. As a result, supply chains will enjoy an increase in capacity to deliver and meet all desired company outcomes.
Use of AI Will Increase
An increased ability to use AI will result in greater use of AI. It is a self-fulfilling prophecy, but not the dark images that come from Terminator. AI includes machine learning and deep learning, allowing machines to self-optimize performance and alert managers of potential failures or issues before they occur. In fact, up to 80 percent of companies already use AI, explains Louis Colombus in Forbes Magazine, and 30 percent of companies are planning on expanding AI investments in the next three years. Moreover, this will result in the hiring of AI experts and a Chief AI Officer.
The use of AI will lead to better responsiveness by customer service representatives, and since the technology hinges on automation, order accuracy will increase, which will enable better spend analysis and cost reductions through newer, more advanced analytics, reports Medium. Since up to 79 percent of supply chain managers surveyed cited cost reductions as a top area of concern, investments in and use of AI will increase.
Conversational Platforms Will Drive Supply Chain Collaboration
According to Supply Chain 24/7, supply chain leaders will start working with conversational platforms in 2018 with greater vigor. Workers will interact with systems by voice, and this technology will make its way to consumer-facing areas, including online shopping environments, brick-and-mortar stores and everywhere else.
What About Moving Product Through the Supply Chain, I.e., What About Logistics?
While transformative supply chain technologies within the supply chain are exciting, they do not yet answer a basic question; how will they impact how consumers receive products? The answers to that question lie in understanding how logistics will evolve over the next year. It’s easy to assume logistics is simply freight shipping, but it includes inbound and outbound processes, order fulfillment, performance measurement, compliance with regulations and more. As we continue our 2018 trends series, we’ll address Logistics in the next four posts of this series.