Conquer Supply Chain Resource Scarcity With These 7 Technologies

Gabriele Pfaffmann

“Scarce.” It’s a great word. It’s probably a term that first appeared to me on some middle school vocabulary test. Little did I know then that the word would become such an integral part of my everyday lexicon as I embarked on a career in supply chain.

Oddly enough, the word “scarce” has always invoked a feeling of fear in me. Part of that is likely because it’s a mere one letter off from the word “scare.” More likely, I think it’s the fact that running out of something, particularly some precious resource, is a truly frightening prospect.

In today’s increasingly complex supply chain industry, resource scarcity is certainly something to fear – but it’s an issue that organizations can unquestionably overcome as long as they have the right strategies in place.

SCM World recently published a report on the topic of resource scarcity. The paper provides insight on how supply chain organizations can manage their operations in a more sustainable fashion. In essence, the research firm touts technology as a key enabler to conquering today’s greatest resource scarcity concerns.

How is resource scarcity impacting supply chain organizations?

By 2050, the world’s population is expected to grow to 9.7 billion, up from approximately 7.4 billion today, according to a 2015 United Nations Department of Economic and Social Affairs report. This will put a tremendous strain on the world’s water, raw material, mineral, and energy resources.

A water shortage will greatly affect chemical and industrial companies that use the resource in their manufacturing processes.

The declining availability and, incidentally, rising costs of raw materials and minerals will adversely impact end-product affordability, which translates to supply chain organizations operating at a loss.

Oil and gas companies face similar obstacles, with energy resource shortages resulting in high levels of commodity price volatility.

On top of all this is the increasingly concerning issue of human resource scarcity, which 56% of supply chain executives refer to as “extremely challenging,” according to a recent SCM World survey.

Technology is the key to managing resource scarcity

While a majority of surveyed supply chain practitioners believe they’re successfully managing resource scarcity – with 66% proclaiming themselves to be “first movers” or “fast followers” – many still lack the capabilities of overcoming their challenges.

According to SCM World, and the organizations that are thriving in this area, these seven technologies hold the key to addressing natural resource scarcity and sustainability:

1. Blockchain

This online public ledger is a practical way for companies to trace the origin of raw materials back through the supply chain. With an available list of visible records, known as blocks, supply chain organizations can better keep track of their resource supply and plan for potential shortages.

2. Sensors

More and more enterprises are leveraging the power of sensors and other Internet of Things-enabled devices to monitor and manage the use of water, energy, and other resources at production plants and distribution centers.

3. Drones

The military uses drones for combat missions. Children and adults play with toy drones in their leisure time. Now, supply chain professionals are employing drones to do things like check for leaks in hard-to-access oil pipelines.

4. 3D printing

Businesses are using 3D printing for everything today, from action figures to food. In supply chain, organizations leverage the power of 3D printing to reduce waste during the production process.

5&6. Big Data analytics and GPS

Agricultural companies combine the capabilities of GPS and Big Data analytics to optimize their growth activities. They can use these technologies to scout for prime locations to harvest and gain insight on how to improve crop yields.

7. Social media

Businesses regularly mine social media for customer feedback and potential product quality concerns. Supply chain organizations are monitoring the chatter on social media in order to flag certain supply chain risks. For example, social media can help supply chain experts gain vital information on how people in an area are reacting to severe weather events that may result in supply chain disruptions or resource availability.

Don’t let resource scarcity doom your business

No supply chain organization is exempt from resource scarcity. At some point or another, your enterprise will be impacted by a shortage in water, minerals, raw materials, energy, or skilled labor, and you must understand how to overcome this obstacle.

Cutting-edge innovations, such as those listed above, can provide your company with greater visibility into its resources, as well as insight on how your organization can prevent and address its resource scarcity concerns internally and across the entire digital supply chain.

Download the full SCM World report – Resource Scarcity: Supply Chain Strategies for Sustainable Business – to learn more about managing resource scarcity with the latest technology and to find out how leading companies throughout supply chain are already achieving this.


Gabriele Pfaffmann

About Gabriele Pfaffmann

Gabriele Pfaffmann is a member of the SAP Solution Marketing organization, responsible for the enterprise asset management (EAM) line of business. She joined SAP in 1996, holding positions in solution management and solution marketing, and is based in Walldorf, Germany.