Faced with an environment characterized
by persistently low growth, fierce competition, and demanding customers that has
eroded their ability to derive a premium
from traditional sources of differentiation
such as product or brand, many companies
across industries are increasingly looking to
their supply chains as important sources of
differentiation and competitive advantage.
However, companies must also deal with
a long-term trend towards continually increasing volatility, uncertainty, complexity,
and speed in their supply chains that shows
no sign of slowing down, let alone stopping or reversing. This trend is being driven
by a confluence of interrelated exogenous
forces, including globalization, geopolitical
and macroeconomic instability, regulatory
change, changing customer behaviors and
expectations, and technological change.
Of these factors, the impact new technologies—in particular, digital technologies
such as data analytics, cloud and mobile
computing, the Internet of Things (IoT),
and advanced robotics—are having on companies’ supply chains has been especially
great. As well as acting as exogenous forces that—by enabling new competitors with
new business models to disrupt established
industries and create new markets—are
changing the role of the supply chain, digital
technologies also provide companies with a
powerful new set of tools and approaches
that are changing how supply chain organizations carry out that evolving role.
Examples of how companies are deploying digital technologies to transform supply chains:
■ Fluctuations in demand and potential supply chain disruptions can be anticipated with
increasing accuracy thanks to analytics tools
that incorporate data from disparate sources,
including external unstructured data such as
weather forecasts or social media chatter.
■ Shipments can be monitored and routes
adjusted in real-time, thanks to data analy-
sis and visualization techniques, GPS-en-
abled mobile computing and telematics,
and cloud-based infrastructure.
■ Supply chain networks enable real-time deliv-
ery and production data to be shared between
external suppliers and distributors and inter-
nal manufacturing and warehousing facilities.
■Warehouse and inventory management
are being transformed by advanced robot-
ics and sensor technologies, with even the
futuristic vision of a true ‘lights out’ ware-
house (operated entirely by robots able to
work 24/7/365, with no on-premise human
managers) no longer a far-fetched prospect.
■ Further out on the horizon, 3D printing has
the potential to significantly disrupt supply
chains by enabling companies or customers
to manufacture parts or products at or near
the point of consumption, obviating much
of the storage and transportation require-
ments of traditional manufacturing.
Despite the clear opportunity for significant,
measurable performance improvements
across a wide range of metrics to be gained
by adopting these and other digital technolo-
gies in their supply chains, many supply chain
executives find themselves struggling to ful-
ly exploit the benefits of more mature supply
chain technologies such as RFID sensors or
Advanced Planning & Scheduling systems.
Indeed, the example set by digital supply
chain leaders such as Amazon, Inditex, Procter
& Gamble, or Zappos contrasts sharply with
the more prosaic reality experienced by many
companies, where digital supply chain capa-
bilities that range from modest to essentially
non-existent are much more the norm.
Consequently, there is a strong and grow-
ing demand for the services of those consult-
ing providers that can demonstrate capabil-
ities that combine in-depth knowledge and
experience in the areas of supply chain, digi-
tal technologies, and client industries.
Brendan Williams is the
Associate Director and
Lead for Digital Consulting
Research, ALM Intelligence.