Supply chain innovations have always been incremental refinements and a part of isolated executions by market players instead of industry-wide phenomena. But 2021 is going to be phenomenally different- it will witness mass adoption of new technologies. The major reason behind the dispersed use of tech innovations in supply chain management is difficulty in implementation. Solutions like MRP software and beacon-based positioning systems look great on paper but their application-level problems like initial costs, learning curve-attrition considerations, standardization, and compatibility.
All of these problems left the supply chain industry pretty much on its own when it came to supporting sustainability despite technological debt in many instances. In this article, we are going to learn about tech innovations that will transform the supply chain management industry rather than claiming to revolutionize it. None of the past technologies achieved their full potential and created an equal amount of challenges instead. But, we can hope that the next-gen innovations from Industrial Revolution 4.0 will also fill the gaps left by their predecessors. In fact, the current advancements will help reduce costs and complexities at the same time. Dive in deeper to view the future of how goods and information will exchange hands in the upcoming days.
The Comprehensive List Of 8 Tech Innovations That Will Transform Supply Chain Management
Being a leading cloud-based ecommerce automation platform has helped us understand the nitty-gritty of the industry. I have identified the top 8 innovative tech solutions that will help redefine how businesses function. All of them will reduce the costs incurred, dependency on human resources in labor-intensive jobs like order picking, packing, material handling, and improving operational efficiency. These solutions will also foster collaboration between all stakeholders, including competitors. Here’s the list of those 8 solutions, and see if you can adopt a few of them:
#1 Blockchain-Based Smart Contracts
Blockchain refers to digitally distributed ledgers that compile the same piece of information and entertain changes subject to fulfilling certain conditions through a consensus protocol with each stakeholder conserving the information individually. In simple words, it shares the data with the entire group so it can verify any unwarranted changes or additions quickly. Smart contracts are a cost-effective solution to issues like tracking products, spares, fighting counterfeit items, reducing the cost and time needed in financing and leasing. This will improve decision making, especially when two companies from separate states/countries are dealing for the first time. In the face of global challenges like the present COVID-18 pandemic, this will help speed up economic responses. The supply chains will become more resilient to such disruptions, and businesses will find it easier to restructure and diversify their operating models.
The smart contract market is expected to grow with a CAGR of 32% to reach USD 300 million by 2023.
For instance, if you want to increase the number of vendors for a certain product, you can explore more suppliers without risking your finances. You can verify their details in very little time and choose your vendors without making them fill lengthy forms that you will have to scrutinize for hours. Thus, it enhances the ease of doing business.
#2 AI And Machine Learning
AI and Machine Learning are the forerunners of IR 4.0 as they will help understand various processes and automate business processes. These tools generate extensive information on a real-time basis. This information will power the BI tools and reduce the issues like the bullwhip effect that arise from the misinterpretation of a certain data set and impact subsequent decision making across organizations and decision-makers.
AI will also play an important role in facilitating communication with the help of conversational chatbots and aiding us with BI reports. This will help the bidirectional flow of information between organizations and increase security despite sharing crucial data. This is set to transform communication and availability of insights to even the smallest companies.
#3 Big Data And Deep Learning
Deep learning and Big Data are no longer limited to the finance industry. In fact, the number of participants in the global supply chain ecosystem is increasing rapidly, and Big Data will be an asset for getting insights into various trends. One of the common examples of the advantage we can get is the predictions on Apple product launches and their specifications. All of this precise information is leaked from the supply chain inputs sourced from the individual vendors.
Deep learning will decimate the need for managerial attention, much like office automation made clerical work disappear. This will reduce overheads and help logistics companies in reducing bottlenecks. On the other hand, manufacturers will be able to produce goods at optimal efficiency without overtly relying on their management’s top brass. Tools like Tableau and Hadoop will become available to masses with negligible learning curves.
#4 Robotics And Automation
Here come the favorite kids of IR 4.0- robotics and automation. From order picking to labeling, there are a few jobs that remain labor-intensive at the moment, especially for heavy items. While we can now completely automate tasks like handling letters (except that we no longer need to that) and small items in couriers, still, we cannot automate material handling for heavier objects. The current technology lacks human-like precision and real-time decision making to retrieve larger and heavier objects.
In 2019, the robotics market was valued at $39.72 billion and it is expected to grow with a CAGR of 25.38%.
Well, robotics and automation can also aid in counting and inspection of products. They can also assist in tagging the inventory to provide greater visibility of your products. It will also help businesses supply products to remote locations without spending extra money on amenities for the staff working at inaccessible locations. Automation also reduces the costs by extending continuous and on-demand working capacity.
#5 Alternative Fuels
Alternative fuels and propulsion technology is now backed by global commitments to reduce and ultimately stop using fossil fuels—alternative fuels like hydrogen, biofuels, and electric propulsion. The current response of the global supply chain isn’t up to mark. The pandemic has derailed the adoption, with India being the only country running on the schedule. Their use in the deep ocean ships is yet to realize effort but inland ferries and alternative propulsion engine trucks are already a reality.
Major players like Hyundai, Toyota, and Tesla are pushing for mass production of these nonconventional trucks, while sea ships are also adopting this trend slowly. Nonconventional fuels and propulsion systems are set to become popular in the next decade.
#6 Throughout Visibility
One of the recent demands from stakeholders is getting throughout the visibility of the inventory and finished goods. The key facilitators for throughout visibility is the standardization of the data packages and the processing parameters, i.e., metrics across various software solutions. Cloud infrastructure is essential for maintaining visibility as it allows real-time data transfer between software packages. As a result, businesses can generate enormous databases on a daily basis to layout planning for both the short and mid-term supply chain decisions.
An important aspect of throughout visibility is that it helps cut down the safety stocks by a significant percentage as the reliable visibility helps lower the buffer stock and fine-tune the consumption rate. Also, this will result in a shorter turnaround time for the products. In industries like ecommerce, visibility can also become a USP for the sellers. Standardization and interoperability for data compilation will become two emerging trends in the software industry as 2021 sets in.
#7 On-Demand Delivery And Crowd Shipping
Both on-demand and crowd shipping are two major trends focused on refining customer experience. Urban warehouses and BOPIS are easing the inconvenience caused due to the long waiting periods, and this will also reduce the pressure on the supply chains. Having huge distances between the demand centers and warehouses puts tremendous pressure on the supply chains. As a result, omnichannel selling is all set to become a major shift in the market sentiment. On-demand delivery will utilize locally available warehousing facilities and new logistics models like crowd shipping.
Crowd shipping is a relatively new idea that can be best described as ‘Uber for parcel delivery.’ It uses the vehicles of common people as carriers, and they themselves act as the delivery agents. This is a win-win game for both parties as to the crowd, i.e., service aggregators, as the payouts discount their travel without making any big commitment. On the other hand, it solves most of the problems associated with dedicated courier logistics. All in all, both of these approaches are aimed at reducing the cost of the service while improving the overall quality of the end-users.
#8 3D Printing
Last but not least, 3D printing was a fad for most of the millennials, but it seems that the wait is finally getting over. The quality of 3D printed products is improving day by day, and the 3D printed items are also finding specialized applications. 3D printed face masks, and shields received great reception during the COVID-19 pandemic. This technology can help fill the gaps in the supply chains while research shows promising results for metals’ 3D printing.
3D printing can open doors to new opportunities where we can select an item online and print it at our homes! That’s virtually zero lead time, and all complexities associated with delivering the product is eliminated. This will soon become a reality as advancements in technology become faster with the accumulation of scientific data. Think of the fact that it took less than 60 years to go from the first airplane to stepping on the Moon.
So far, supply chains were about individual capabilities and USPs, but it seems that the market demand is shifting towards a collaborative approach. Right from the software packages to sensors and operating procedures, we are heading towards a modular supply chain model at the global level. The resultant increase in the overall customer experience will be on both factors: Time to market and prices. It will become possible to reduce the prices of many products by eliminating the preventive measures taken in the form of buffer stocks or additional logistic provisions. I feel that 2021 will mark a new phase in the supply chain ecosystem with these 8 trends rebooting the way information and goods exchange hands.
- Resource 1: Three game-changing supply-chain technologies (mckinsey.com)
- Resource 2: What are smart contracts on blockchain? – Blockchain Pulse: IBM Blockchain Blog
- Resource 3: DHL Freight: first fully sustainable premium LTL service | Logistics | Supply Chain Digital
- Resource 4: Is India on track to meet its Paris commitments (downtoearth.org.in)
- Resource 5: Hyundai Buys Boston Dynamics for Nearly $1 Billion. Now What? – IEEE Spectrum
- Article 1: What is the Bullwhip effect in supply chain? – A Best Guide (orderhive.com)
- Article 2: Difference between Shipping and Logistics | Orderhive
- Article 3: Top 6 Trending Technologies Used in Shipping Management
- Article 4: The Ever Growing Importance of Supply Chain Management
- Article 5: 6 Supply Chain Models you need to know
Neel is a creative who's always ready to lay his hands on anything that is innovative and captures masses. He is currently working with Orderhive. Apart from technology and business practices, he drools over psychology, history, and cinematography. You can find him on hiking trips, talking over anything from alien belief systems to 90's cartoon shows.
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