Tomorrow’s Supply Chains

shaun_tomorrows_supply_chainsIt’s an exciting time to work in the field of supply chain. There’s a sense of change in the air – an awareness of the future unfolding. There are thought leaders who think we’re headed for a ‘Fourth Industrial Revolution’, an era of sustainable, socially conscious enterprises, underpinned by the intelligent interconnection of software and machines. For decision makers along the supply chain, it’s time for research – and for vision.  In many instances, the adoption (or non-adoption) of today’s technologies will determine who thrives and who dies along the supply chains of tomorrow.

Let’s take a look at some of these converging technologies, and consider their application along the supply chain.

The Cloud

For small- to medium-sized businesses, access to the new competitive toolkit is taking place on the Cloud. Even beyond price considerations (which are significant) unlocking the power of nascent technologies makes the adoption of Cloud services a logical step in the evolution of most organizations. There are still good reasons to choose on premise or hybrid solutions, but extending the reach of an ERP to include data external to the company (such as weather, demographics, machine and sensor data), makes better sense on the Cloud.

There are more advantages to the Cloud than are dreamt of in anyone’s philosophy, but to my mind, the Cloud’s ability to facilitate highly collaborative ecosystems is exceptionally powerful. Both responsiveness and efficiency are enhanced by the flow of real-time data, which can help to minimize operational misalignment at the interface of supply chain stages.

Big Data and Advanced Analytics

By 2021 there will be more than 35 zettabytes of online data. For those who haven’t a clue what a zettabyte is (myself included) that’s 35,000,000,000,000,000,000,000 bytes of information. That’s an impressive amount of data, and most of it is unstructured, meaning that before the advent of Big Data it was largely inaccessible to computers. These days, with Big Data analytics programs, all that unstructured data can be collected, organized, and analyzed. This facilitates unprecedented accuracy and clarity of data, opening the door to better planning and decision-making.

Artificial Intelligence (AI)

When I think of AI, my mind wanders to Star Trek’s Data, rapidly processing technical information from the Enterprise’s computer, and instantly recommending a course of action. While we’re not quite ready to staff our distribution centres with androids, the capabilities of Artificial Intelligence will have enormous benefits along the supply chain. AI-driven ‘chatbots’ are already improving the User Experience for customers of shipping companies, making it  easier to find store locations, determine shipping rates and track packages.

AI can draw insight from enormous data sets. That promises more accurate forecasting and lower market mediation costs (fewer stock-outs and mark-downs) – a major profit eater for innovative product manufacturers. Unprecedented control over data will allow for fine tuning, helping to tighten up end-to-end visibility, time-to-market, and overall agility. AI can also serve as a bridge between supply chains, facilitating a seamless flow of transactions. Of course, the most visible manifestation of AI, along with chatbots, will be fleets of autonomous delivery vehicles.

Robots & Cobots

Industrial robots are nothing new, but their presence along the supply chain is growing. When material handling is better handed off to a machine, especially in dangerous situations, or when precision is required, benefits in efficiency, responsiveness and safety naturally accrue.

What I find particularly interesting is the movement towards ‘cobots’, smaller, less expensive, more flexible robots that work side-by-side with humans. Cobots are becoming popular for pick and place, palletizing, and packaging. They will doubtless lead to significant reductions in turnaround times, and create increasingly responsive supply chains.

The Internet of Things (IoT)

The Internet of Things, sometimes referred to as the driver of Industry 4.0, ties together people, processes, data, and things, via a burgeoning universe of devices and sensors. Unlike older, ‘passive’ generations of sensors, IoT sensors are active. A connected pallet for example, can relay information on its whereabouts and condition. A connected machine can allow remote technicians to run diagnostics and initiate repair options, resulting in increased uptime and improved customer service. Importing data from IoT devices to an analytics platform will allow, for example, unprecedented stock control and precise inventory monitoring.

When it comes to transportation, IoT systems are already in use, optimizing fleet efficiencies through route planning, directing drivers to avoid traffic jams, maintaining temperatures for perishable goods,  and helping carriers reduce ‘deadheads’ (the time trucks run without cargo). In addition, IoT technologies such as RFID provide the ability to track products throughout the global supply chain.

Some of the most powerful uses of the IoT are in the area of customer behavior. In-store sensors can track traffic and shopping patterns to yield clear insights into consumer behaviour, improving brand engagement and increasing sales. This depth of intelligence into supply and demand will benefit everyone along the supply chain.

There are, of course, more technologies to talk about than can fit in a single blog. In my next offering, aimed to coincide with the release of SYSPRO Harmony, I’ll talk about Social Media, and the exciting new possibilities that are opening up for problem solving and collaboration along the supply chain.

About our Guest Blogger
Shaun Butler

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Shaun Butler is the Regional CEO of SYSPRO Asia Pacific, having joined SYSPRO in 2003. Whilst Shaun is based in Singapore he spends a reasonable amount of time travelling throughout the rest of the region

Having spent more than 20 years in and around various ERP companies Shaun has found it refreshing to work in the SYSPRO environment, with long term employees who are committed and passionate about a single product.

Shaun’s role is broad and varied but in short he is responsible for the growth and strategic direction of SYSPRO across Asia and the Pacific. He is extremely proud of the company and the team SYSPRO has built, supported by the many customers who place their trust in SYSPRO’s solution and capability.

 

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Digital supply chain transformation and customer-centricity

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Turning a digital business strategy into a reality remains elusive for many organizations. Even businesses that are forward thinking and have already begun developing a digital transformation strategy will find new gaps to fill and new challenges to address that didn’t exist last year in the areas of new regulations, new trade policies, and new customer demands, to name a few.

As a result, many businesses are recognizing that digitization is not only about improving business processes or automation. Digital transformation is about redefining business. It’s about wrapping services around products, or going a step further, replacing products with services.

Cloud technology is a catalyst to new business models, with data, digitization, and networks serving as the underlying core. When this is applied to a supply chain — where hundreds of people and parties impact the order, production, and delivery of goods — it spawns new ways for businesses to service customers.

Supply chains are rife with inefficiency, bottlenecks, and information silos. They tend to be set up as long, winding linear trails of business transactions. Data and visibility remain bottled up in each trading partner organization. This fragmented landscape has become inadequate in today’s world of always-on commerce and ultra-demanding customers. On the surface, there is low-hanging fruit in digitization of processes such as order management or supplier collaboration. But digital transformation possibilities run much deeper, into the foundational infrastructure of business-to-business commerce, where a network approach to business can deliver massive returns by finding new ways to deliver value to customers.

Transforming entire industry supply chains

Digital transformation is a broad term being probed and defined in multiple ways. In some industries, such as automotive, the movement is not so subtle — and more of a change locomotive. Disruptive factors such as connected cars and autonomous vehicles are reshaping the industry. The transformational vision for automotive companies is a new ecosystem of suppliers, original equipment manufacturers (OEMs), dealers, and complementary services that enable new customer experiences and products to be delivered.

The industry is well on its way. Major players like Ford are investing heavily in technology. Ford just raised $2.8 billion to drive new innovation. The company has already committed to spending $4.5 billion to bolster a lineup of electric cars, with plans to release a fully autonomous car in 2021. The ability to integrate new innovations, technologies, and suppliers into the automotive ecosystem will be key to excelling in the future.

In retail, digital disruption is being spurred by immense pressure from consumers. And similar to auto, where outsiders like Uber and Tesla bring disruption, retail has been upended by the Amazons and Alibabas of the world. Consumers are accustomed to Walmart-like low costs and Amazonian convenience and delivery. As a result, retailers across all segments are being forced to be hyper-sensitive to consumers’ needs and wants. But competing with Amazon on delivery services while offering competitive pricing comes at a cost — to profitability.

Retailers recognize the need to transform how they order, produce, and deliver goods to be customer centric in new ways, while remaining profitable. New experiences and services are essential. Consider how retail is already evolving and leading to supply chain transformation. Some of the growing trends in shopping today include social shopping, pop-up stores, mobile commerce combined with trucks and vans, click-and-collect, personal shoppers, subscription-based shopping …

In-store, retailers are innovating as well. Ralph Lauren has introduced interactive touch-screen mirrors in its fitting rooms. IKEA has deployed virtual reality to allow shoppers to envision new rooms in their home. West Elm, a furniture provider owned by Williams Sonoma, has announced plans to open five hotels, which will act as showrooms where consumers can purchase goods.

Under pressure from nontraditional competitors and demanding consumers, the future supply chain relies on a network of manufacturers, suppliers, and service providers built around the customer to deliver new experiences, services and value.

2017 will sharpen focus on customer-centric commerce

The bounds of traditional business are being stretched. In 2017, we’ll see technology trends that go deeper into the reshaping of business models and further redefine industries.

Automotive companies are evolving into transportation service providers. Competition from non-traditional players raises the bar on technology and connectivity, forcing automakers to find new suppliers and partners that can deliver tech savvy innovation.

Retailers are evolving to deliver new forms of experience to the consumer. Competition from beyond the traditional industry is forcing retailers to get closer to customers through fast or free shipping, free and simple return programs, customized goods, and seamless order fulfillment from any shopping channel.

Consumer product brands like Tide are getting into homes with their detergent pods; consumers push a button from their laundry room to place an order. This bypasses the retailer and goes direct to the consumer.

In 2017, questions such as “What defines a true automotive company?” or “What defines a true retailer or consumer product company?” will have to be examined and redefined.

At the centre, of course, is the customer. Customers expect and demand more. Delivering on these expectations and fulfilling orders requires manufacturers and retailers to rewire the way they produce and deliver goods to their customers.

2017 looks to be a year of uncertainty and change. Social, technological, environmental, and political disruption will have massive impacts on commerce and supply chains. For businesses operating in nearly any industry, this means more pitfalls and challenges, accompanied by more pressing demands from customers. Companies and trading partners that fail to adapt are at risk.

Supply chains of the near future will have to operate as customer-centric networks. This should be the end state, or vision. Getting there requires a long road, starting with digital transformation.

 

About our Guest Blogger

Helen Masters
Vice President & Managing Director, Infor South Asia — ANZ & ASEAN

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Helen Masters is Vice President, South Asia – Infor ANZ & ASEAN where she is responsible for the development and promotion of global corporate products and seamless customer experience to augment market presence in the Pacific and ASEAN regions. These comprise Australia & New Zealand, Indonesia, Malaysia, Philippines, Thailand and Singapore.

In her role, Helen maintains new product lines with a focus on customer and partnership management and strategy-setting to grow business in Infor’s key micro-verticals in the South Asia region.

Prior to Infor, Helen was Vice President, Commercial and Emerging Markets, SAP; and Head, Emerging and Transformational Alliances Group, Cisco Systems where she was responsible for the launch of data business solutions.

Helen is a graduate of Macquarie University, Sydney, Australia and is also certified in Computer Programming.