Part 3 in the 4-part “Digital Supply Chain Predictions for 2019” series
In my last blog in this series on trends that lie ahead, I talked about new business models for 2019. Before that, I took a broader perspective on more global issues facing us in the coming year. Here, the focus is on the intelligent technologies that are changing the supply chain game everywhere.
The simple fact is that intelligent technology is what often separates the leaders from the followers in today’s digital economy. Internet of Things (IoT), machine learning, predictive analytics – technologies like these help organizations derive greater value from their most valuable corporate asset: their data.
Thus, in the year ahead of us, I expect to see more companies dive in with intelligent tech. They will grow increasingly comfortable with how it can help drive supply chain performance and deliver better customer experiences. This will lead to wider adoption in general. Here are some specific thoughts.
IoT, machine learning, and data analytics will deliver competitive advantage
In 2019, the number of organizations using IoT to generate big data, and machine learning and predictive analytics to turn this data into information and streamline supply chain operations will increase tremendously. These technologies will become critical for running live supply chains that meet evolving customer demands in real time.
A recent Forbes Insights survey of 700 executives found that 22 percent of respondents are implementing IoT to provide greater transparency across their supply chains. IoT is not just about connectivity and accessing “big data.” At its core, it’s about gaining the visibility needed to increase efficiency, predict what’s coming, and improve business outcomes.
Keep in mind, that IoT without analytics is pointless. Data transmitted from a smart product or asset does little good unless you know what to do next. Leading companies in 2019 will increasingly incorporate IoT deployments into core business applications to add vital business context.
From there, the goal is to use predictive logic to determine the correct course of action and machine learning to continuously improve. This approach can transform daily operations. In 2019, I expect to see more companies moving toward predictive maintenance – leading to improved service profitability, reduced maintenance costs, and increased asset viability.
Blockchain projects will move from proofs of concept to proofs of value
While we see a lot of push from executives to “investigate blockchain,” most projects still fall into the proof-of-concept category. Supply chain, however, will be one of the first areas where we see proven value of blockchain technology. Mass adoption may still be in the future, but companies in 2019 will start moving beyond proof of concept to proof of added value.
The key is to identify standard business processes where blockchain has the ability to generate a return on investment. Areas where a clear and indisputable chain of custody needs to be documented are perfect candidates.
Take, for example, farm to table offerings at organic restaurants. Blockchain can provide a valuable track and trace function to authenticate where the food you’re eating has come from. In a similar vein, blockchain can also minimize counterfeiting by demonstrating provenance, reduce fraud by authenticating transactions publicly, and confirm the ethical sourcing that customers demand. These are just a few examples. Expect companies to find more ways to make blockchain pay off across the supply chain in 2019.
3D printing in manufacturing will grow
Adoption of robotics and 3D printing (additive layer manufacturing) will continue apace. A key trend will be the move toward distributed manufacturing rather than outsourced manufacturing.
Outsourced manufacturing may deliver labor cost advantages, but it does not necessarily deliver production agility. The distributed model means that organizations produce where the market exists rather than where the production facilities exist. With 3D printing, organizations can move the means of production (the “3D printer”) to where the demand is needed – sending the designs for whatever needs to be made through the cloud. This gives companies the flexibility to respond to changing customer demand, provide individualization of products, and even “print on demand” services.
Robotic process automation (RPA) will become a thing
When it comes to artificial intelligence (AI) and machine learning, RPA is relatively easy to deploy and shows rapid benefit. Expect, therefore, more organizations to seize more RPA opportunities in 2019.
The key is to realize what can be automated and what requires human intervention. With RPA, software bots follow along as system users perform specific tasks, and then replicate those tasks moving forward. Admittedly, RPA technology is good at the simple stuff – but, as it happens, the simple stuff makes up about 50% of the work load for administrative jobs.
The goal, of course, is to augment humans with AI and robotics, not replace them. As I was once told, “AI doesn’t take the person out of the process. It takes the robot out of the person.” In 2019, expect more companies to automate repetitive warehousing, logistics and manufacturing tasks with RPA and free up worker time to focus on higher value tasks that help improve the customer experience.
Coming up next
My next blog will serve as a wrap-up for this series on predictions for 2019. Stay tuned.
Join an interactive session featuring Jeff Hojlo, Program Director of Product Innovation Strategies at IDC, and Hans Thalbauer, Senior Vice President of Digital Supply Chain and Industry 4.0 at SAP, to get inspired by how best-in-class companies are reinventing their supply chain. Register here.