Table of Contents
The landscape of supply chain management continues to evolve, ultimately allowing suppliers to operate more effectively and efficiently across the board.
In some ways, the improvements being made are in response to recent developments in supply chain management. In others, organizations are working to make improvements in anticipation of future events and the world of commerce in general.
The development of technology goes hand-in-hand with the future of supply chain management.
Whether allowing supply chain teams to improve or add to their current processes in some way or another, newly-created tools and technology are all but necessary for survival as we move into 2020 and beyond.
More specifically, the use of autonomous mobile robots (AMR) will likely be adopted by more companies over the next four to five years. In adopting this technology, organizations will be able to automate and streamline picking and packing processes in particular.
This isn’t to say that robotic technology is going to completely take over certain processes along the supply chain. At least for the foreseeable future, there’s still a need for supply chain teams to have a hands-on approach to their various processes.
For example, while AMR tech focuses on automating the actual picking process, it relies on information from the company’s warehouse management system—as managed by the supply chain team—to do so.
So, as we move into 2020, it’s vital for supply chain teams to understand the importance of incorporating technology into their processes—not being intimidated by it.
We’re also bound to see the various tools and technologies used by supply chain teams become increasingly integrated with one another.
What many supply chain technology providers are coming to realize is that...
Overlapping with another service doesn’t necessarily mean they should be competing against each other.
For example, though AMR tech may steal some of the spotlight from a company’s current warehouse management system, this WMS likely performs a wide variety of other tasks that AMR currently can’t handle. Despite the slight overlap in functionality, most supply chain teams would end up needing to use both tools to optimize their processes.
That being the case, supply chain technology will likely become not only more integrated with other such tools, but will also become more specialized, as well. Supply chain teams that adopt this highly-integrated and specialized technology moving forward, then, will almost certainly spur a massive growth in productivity throughout their processes.
The more efficient a company’s pre-fulfillment processes are, the quicker the customer will receive their order.
Conversely, no matter how streamlined a team’s fulfillment processes may be, it will all be for naught if it’s supply chain to standard.
This is one of the key reasons athletic apparel giant Nike found itself on Gartner’s Supply Chain Top 25 of 2019. In an effort to decrease lead times and improve supply chain agility, Nike evolved its processes to include “rapid prototyping with 3D and digital printing.”
This allows Nike to capitalize on trends and events by developing new product iterations and bringing them to market almost as the event in question unfolds. For example, after the blockbuster trade of LeBron James to the Lakers, Nike was able to get the new jersey to market in half the time it had taken in previous years.
Generally speaking, modern companies deal with a variety of customers, each bringing their own needs and expectations to the table.
Because of this, implementing segment-based (and even account-based) changes to their supply chain processes will become critical. In creating these segments, companies typically focus on factors such as the buyer’s:
Adidas is a prime example of a company that has customized its supply chain processes for specific audiences. In investing in localized forward fulfillment sites, and partnering with 3PLs, the company has been able to offer lightning-fast fulfillment to its high-value buyers.
Inventory is a strange thing. Having too much of it means you’re wasting a ton of capital on rent, maintenance, and other costs related to your storage space.
Having too little storage space, of course, means your current inventory is going unsold—and you also have no room for items that might be better for your business.
The key is to have just the right amount of inventory space so as not to hinder your ability to fulfill your customers’ needs, but not so much that it cuts into your bottom line.
This is why visibility with regard to inventory-related data is increasingly valuable to modern supply chain teams.
By maintaining both a bird’s-eye and granular view of inventory data (both current and forecasted), supply chain teams will be better able to take full advantage of their inventory and storage assets.
It’s always been a goal to keep operational costs down while also ensuring their processes run efficiently. As technology allows supply chain teams to “dig deeper” into their processes, organizations will be able to further optimize their working capital—almost to near perfection.
For one thing, modern technology allows teams to collect a wide breadth of data regarding their supply chain’s effectiveness and efficiency. In turn, the team may uncover previously-overlooked redundancies, blockers, or other potential pitfalls along their supply chain.
(Or, on a more positive note, data can also identify areas where a supply chain runs exactly as planned. Business owners or managers can then transfer what works well in that area into other areas of their supply chain in some way or another.)
Technology also allows for optimization of working capital in enabling supply chain teams to make dynamic decisions in near-real time. AI and machine learning can provide instant insight into trends, forecasts, and other variables, in turn making it easy for teams to know which path is the most cost-effective one to take.
To forge strong, mutually-beneficial relationships with their suppliers, supply chains will be looking to:
Regarding communication, teams need to ensure their suppliers are privy to any information that may affect their processes in any way automatically.
For example, if a buyer is currently overstocked on a specific product, but their supplier isn’t aware of this, the supplier might fill a scheduled order—which will end up causing problems for both companies. Had the supplier known to place a hold on the scheduled order, the issue would easily have been avoided.
The bigger picture, though, is that forging relationships with suppliers goes deeper than just optimizing processes.
Organizations are now looking at how forging these relationships can further enable both parties to more effectively accomplish their true mission as a company.
If, for example, a supplier operates on a platform of ecological sustainability, it would only make sense for them to ensure the companies they sell to are also dedicated to this same cause.
Not only will such a relationship inherently help further both company’s mission, but it will also open the door for both organizations to co-develop ancillary initiatives to even further help their cause.
Though no longer as “trendy” as it was in recent years, blockchain technology has the potential to positively impact supply chain processes in three key areas:
However, Gartner predicts that, by 2023, 90% of blockchain-related supply chain initiatives will fall short of their intended goals. In making this prediction, Gartner explained that many supply chain teams fail to truly grasp the value blockchain technology brings to the table, as well as a lack of follow-through in terms of actually implementing the technology into their supply chain processes.
While the hype surrounding blockchain has certainly cooled off, the tech itself continues to evolve as time goes on. Given the importance of data throughout supply chain management, overall, there’s no doubt that those who get acclimated with this maturing technology will be leaps ahead of their competition.
Capacity crunch: the increase in demand that stretches a company’s ability to store and physically deliver orders.
When capacity crunch hits an organization, companies often do one of two things:
In either case, the company’s customers are the ones who end up paying more.
In the first scenario, if the company doesn’t have the capacity to deliver to a given customer, this of course means the customer isn’t going to get what they’re expecting at all. In the second scenario, the company will likely increase its prices to make up for the increased cost of doing business.
Of course, what’s bad for the customer is bad for business.
This is yet another reason the emerging technology and innovative processes we’ve discussed thus far are leading the charge toward supply chain management optimization:
Increased efficiency means higher capacity to perform.
In working to optimize every aspect of your supply chain, you’ll enable your team to run at their highest capacity—at a fraction of the cost to your business. In turn, your organization will continue to be able to fulfill the needs of your customers well into the future.
Rather than being seen as merely a mechanical—almost tangential—part of a company’s overall processes, supply chain teams are now starting to be recognized as the integral entity they actually are.
In other words, organizations are starting to see that supply chain processes aren’t just about filling orders. The data, information, and knowledge that flows throughout these processes can be used to the benefit of the company overall.
While the potential use of supply chain-related data is limitless, some of the most common uses include:
Though supply chain management might not be the flashiest aspect of running a company, we’re sure to see it play a much more integral role in business operations moving forward.