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Five trends leading supply chain into the digital era
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The rapid advance of digital technology has resulted in multiple benefits for supply chain management, ranging from advanced systems integration to increased profitability and reduced waste. The use of smart data and the introduction of real-time technology have the potential to radically transform this business function.
Efficiency continues to be at the heart of the supply chain, with digitalisation leading to greater inter-departmental connectivity and ultimately transparency and collaboration.
Five emerging trends can be identified in current supply chain management.
IT integration is on top of the list for 70% of managers who are planning considerable investment with the immediate result of more jobs and faster web-based processes in the supply chain. Real-time technology is the way of the future, enabling customers and employees to view actual stock levels in the warehouse, at any point in time.
This improved supply chain gives managers the ability to monitor different business processes, ranging from sales to logistics, and determine how well each process is performing which in turn leads to better-informed decision making.
Big Data Analytics
Big data and predictive analytics will provide networks with greater data accuracy, clarity and the ability to work cohesively in order to achieve improved contextual intelligence over various individual networks.
For example, predictive analytics can be applied to demand forecasting which enables book retailers in Russia to vary their book recommendations in relation to the weather forecast as a drop in temperature is linked to an increase in book sales.
Big data has a direct impact on accuracy and reaction time for supply chain issues which is especially important for businesses with short product lifecycles. Research by Accenture found that 36% of companies agree on the need for greater IT integration across the supply chain but 41% of companies commented that big data meant faster and more effective reaction time to supply chain issues (source: Global Operations Megatrends Study on Big Data in Supply Chain).
The proliferation of the Internet of Things will lead to greater connectivity and sophistication, resulting in intelligent algorithms. Increasingly, these algorithms will have the ability to ‘learn’ human behaviour and predict decisions that need to be made.
Digitalisation will not only impact supply chain workflows but also supply chain managers due to increased access to mobile devices and tablets, releasing them from their desktops and laptops.
However, true mobility can only be achieved when managers understand the importance of IT integration and employ people with specialised knowledge in this area, coupled with security. There will be a transitional phase where budgets will need to be reassessed and managers will need to undergo training.
Supply chain managers will also have the task of liaising with mobile business solution providers to determine which functions and processes are prime candidates for mobilisation.
New Skill Set
The arrival of the digital era has far-reaching implications for the type of people companies will hire. Interestingly, globalisation has widened the pool of talent but the speed of technological change requires businesses to seek out workers with highly specialised skills.
New talent will not only need to possess the knowledge of big data and deep analytics but they will also require a high degree of adaptability and agility to work in a rapidly-changing digital environment.
The invention of the drone heralds a new era for many companies. Still, in its early days, drone technology needs to be tested but the potential is unlimited. Reduced environmental impact and costs while accelerating the supply chain are some of the promises this nifty piece of equipment can fulfil.
Some companies, like Amazon, are trialling small delivery drones in partnership with the British government. Big corporate UPS is testing drones for the emergency delivery of medical supplies.
The supply chain could benefit in the not too distant future when businesses introduce drones in the warehouse to pick and move products.
An exciting future possibility is the use of drones to deliver products to the customer which would revolutionise the supply chain process. This scenario might still be a long way off but improved battery life and smart technology have ensured drones are becoming commercially feasible options.
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