One of the most defining characteristics of supply chain management (SCM) is the fast pace of change. And while many parts of SCM, from the competitive landscape to regulations, are driven by that change, perhaps one of the biggest challenges is the constant development of technology. Technology that has become an indispensable mainstay for this industry.
Not only do supply chain professionals need to keep abreast of the latest developments in transport management software, mobile technology, visibility and warehouse automation - there are also the new technologies (AI, VR, AR, IoT, 5G) that have the necessary impact on SCM.
With so many different technologies, we have to be careful not to lose track of the jungle of possibilities. Too often, in the overload of possibilities and information, companies do not know where to start or which technology is actually useful to implement. The result: we get 'stuck' in the current situation. The deployment of technology should always be based on a strategy, and no organisation should blindly follow technology without a predefined purpose. Before we immediately deploy the rapid developments of new technologies and take advantage of the opportunities it offers, it is imperative that supply chain professionals actually understand what the technology entails, what its applications can mean for SCM and whether deployment actually makes sense for the business. Only then can the right choices be made and know whether a chosen technology will actually add value within SCM.
Four of the most current and relevant (disruptive) technologies are AI, blockchain, GeoTech and Augmented Reality. But on which facets do they offer opportunities for SCM?
Artificial intelligence
A search for the definition of artificial intelligence (AI) results in "a secondary part of computer science, where machines imitate human intelligence". AI has transitioned from something we only saw in movies to a technology we interact with daily in our personal and professional lives, often without noticing.
One of the key facets on which AI can enhance SCM is the sheer volume of data. Supply chain professionals have mountains of information at their fingertips. These large volumes can sometimes be overwhelming. Applying AI to data analysis makes it easier to analyse the vast amounts of data and uncover actionable insights.
Another application of technology in the logistics industry is AI-driven visual inspection. AI can and is used, for example, to scan items being loaded for shipment or when checking - e.g. for defects - in a distribution centre.
But AI is also combined with big data to anticipate orders before they are placed. A good example of this is Amazon Anticipatory Shipping, where Amazon tracks consumer buying behaviour. By coupling that behaviour with big data, it can predict when the consumer is most likely to buy a product. At that point, Amazon ships the item to a warehouse near the consumer, meaning that by the time the consumer actually clicks 'buy', the package can be delivered within hours - after all, it is nearby anyway.
Augmented Reality
Augmented Reality (AR) is being used to create unique and valuable customer experiences, with the differentiator and distinct advantage that consumers can try out a product or service before actually buying it. And as with the B2C application, implementing AR in SCM offers huge potential.
AR offers opportunities in areas such as warehousing like order picking, equipment repair, safety and training, for example. A concrete example of the use of AI within SCM is validating item dimensions through AR. MobileSTAR, a mobility platform deployed mainly by service providers (LSPs) and carriers, offers the possibility with an AR overlay. By pointing a smartphone camera at a specific parcel, the app with AR overlay produces a scan that measures and validates the dimensions. This data is then linked to the logistics systems and used for capacity planning.
GeoTech
The logistics industry needs to prepare for a change in the way we think about traditional addressing. Earlier, we saw companies integrate a more geocoded approach, for example Domino's delivering pizzas in the park or on the beach - without an exact postcode and house number, in other words. Brands will look for a customer's exact location to deliver goods and services, with restrictions no longer a factor. The supply chain is undoubtedly going to feel the impact of this.
New addressing solutions, such as what3words, which enable more accurate location sharing, are starting to gain a foothold in the logistics world. Almost every SCM solution is (currently) based on a traditional address. The emergence of GeoTech technology will have a huge impact on IT teams and software companies, as all technologies and existing systems need to be updated to ensure that orders not only move smoothly throughout the supply chain, but are also delivered with accurate location tracking.
Blockchain
Finally, the deployment of blockchain is having a clear impact on SCM. The technology enables companies to better manage the complex movement of incoming and outgoing goods. Every time the product moves a step further down the chain, and thus changes 'owner', the relevant transaction is documented via blockchain. This method and application creates a permanent history and reporting of the product.
Blockchain has the potential to dramatically improve supply chain transparency and security. Last year, for instance, Alibaba Group introduced the Food Trust Framework, which uses blockchain technology to improve supply chain traceability and transparency and combat issues such as food fraud.
Actually, AI, AR, Blockchain and GeoTech are just the tip of the iceberg when talking about disruptive technologies that supply chain professionals will undoubtedly have to deal with in the future. Technological developments offer plenty of potential - provided we use them in the right way.
Author: Roel Assies, Vice President Sales at BluJay Solutions
