The last five years have been the, “coming of age,” period for technologies like the Internet of Things (IoT), machine learning, mixed reality (MR), and blockchain. By late 2017, these technologies gained enough maturity and stability for use in industrial settings. As such, 2018 is shaping-up to be a pivotal year for these promising technologies to be applied in several realms of supply chain, such as end-to-end visibility, product tracking, fraud, settlements, compliance, productivity, worker safety, and delivery speed. Here are seven key trends that are driving innovation, change and agility in today’s supply chains.
No. 1 - Blockchain and IoT will gain adoption for supply chain traceability
Tracking the product component genealogy, place of origin, quality chain, and location can be simplified and streamlined significantly with IOT and blockchain. IoT tracks and monitors various aspects of the product: its location and ambient conditions; blockchain captures non-repeatable proof of key facts along the product lifecycle, (design, sourcing, manufacturing, distribution, sales, and usage). When data from IoT, enterprise applications, and blockchain are used in conjunction with each other, it provides a clear granular sequence of events for the purpose of root cause analysis and process optimization.
Given that the combination of IoT and blockchain addresses critical supply chain challenges, we should see a stream of success stories in 2018.
No. 2 - Mixed reality based experiments will pick up the pace
Augmented reality (AR), virtual reality (VR) and mixed reality have been growing roots in the entertainment space until now. However, in places like factory floors, warehouses, and retail stores, these applications are gaining traction. On factory floors for example, a plant manager can use VR to monitor and manage production lines remotely, from the convenience of his office. In warehouses, workers can use AR for streamlined stock picking. In retail stores, customers can use AR/VR to visualize the products in their personal settings.
Given the instant and convenient access to information these technologies offer, the experimentation of these technologies in supply chain ecosystems will gain momentum in 2018.
No. 3 - Adaptive intelligence will be pervasive
Machine learning is no longer the esoteric technology of yesteryear. Modern supply chain SaaS applications offer adaptive intelligence features, and guide users to make effective data-driven business decisions. For example, built-in analytical models can predict customer demand for a new product launch. This accurate understanding of the demand curves helps with accurate supply level planning. Thus the applications’ built-in ability to draw inferences and make accurate predictions, helps business decision makers move towards thier desired business outcomes.
In 2018 we will see adaptive intelligence across a variety of enterprise situations. Some of the expected scenarios are behavior order anomaly detection, return predictions, quality predictions, component genealogy tracking, predictive machine maintenance, product usage prediction, supplier performance, segmentation optimization, and production optimization.
No. 4 - Cloud non-adopters will begin to flounder
It is well established that traditional on premise enterprise systems are the Achilles heel of agility and innovation velocity. As companies reimagine their customer experiences, their products’ job-to-be-done, the supply chain operations and logistics have to be revamped accordingly. Successful companies have adopted cloud platforms to keep up with the rate of change. Companies that set themselves up for agility and innovation are the ones that will thrive in the new business climate.
Based on the momentum of digitalization initiatives last year, and the market dynamics in many industry verticals, 2018 is shaping up to be the year of do or die for cloud adoption. In supply chain ecosystems too, companies that are slow to adopt cloud will face disproportionate risk for surviving the competition.
No. 5 - 3D printing will continue its steady march into prominence
3D printing has been gaining adoption in many industries like automotive, aerospace, medical devices, fashion, and manufacturing industries. According to a recent PwC study, 71 percent of manufacturers have adopted 3D printing. The need for moving and storing inventory is diminished as 3D orienting enables local production, versus global production.
In 2018, 3D printing will continue its gradual adoption path. Its influence on supply chain operation dynamics will continue to evolve.
No. 6 - Digital co-workers will gain penetration in the enterprise.
Modern corporate worker productivity tools are designed to work alongside humans and assist them with the right tasks at the right time with the right context. As technologies like robotics, computer vision, and natural language processing get mature enough to have error-rates below the human counter parts, they become productivity helpers in activities like stock picking, packing and moving boxes from one aisle to another. These kinds of robots are often dubbed as cobots.
In addition, a different class of cobots are also taking shape. They don’t have a physical form, but relieve the human worker from repetitive mundane tasks. This category of cobots are digital assistants that take the shape of chatbots and Robotic Process Automation (RPA). Chatbots help the knowledge worker by assembling nuggets of information from backend systems, such as the latest inventory levels or arrival time of the shipment. They are accessible via a variety of interfaces such as web, mobile app or AR glasses. On the other hand, RPA helps with automation of complex process driven tasks such as order processing, payments processing, email communications, and inventory management.
In 2018, both forms of cobots (physical and digital) will augment human workers more than ever before.
No. 7 - Emerging business models like servitization will drive changes to supply chain operations
To enhance their value to customers, manufacturers are moving from selling products to selling customer outcomes. Vendors charge customers based on consumption, up time, performance metrics, and other obligations agreed upon. This implies that the onus of smooth running of the equipment is on the seller. Servitization is not a new concept per se. However, with the emergence of technologies like IoT and Digital Twins, the friction of offering servitization models has fallen significantly.
In 2018, manufacturers of medium and light industrial equipment will experiment with servitization based business models. This will also be an attractive model for manufacturers of certain consumer devices that lend themselves to consumption and usage based billing.
Onward and Forward
Global supply chains are arguably one of the most complex ecosystems built by humans. The dynamics of today’s business demand quality, safety, transparency, ethical sourcing, and delivery speed. 2018 is shaping up to be a fascinating year to watch in this space. Emerging technologies will drive the transformation.
Anant Kadiyala is the director of blockchain and IoT industry solutions at Oracle.