In the last decade, supply chain management has undergone a transformative change thanks to innovative and emerging technologies such as artificial intelligence and machine learning. The shift came with the demand to increase delivery times, make products cheaper, and improve how companies interact with the environment.
At least five prominent challenges supply chain managers face remain the same:
- Population and wealth growth in rural areas
- Freight movement restrictions in urban environments
- Sustainability, carbon footprints, and emissions regulations
- Trade wars and border battles
- Economic restructuring
On top of increasing consumer demands, these challenges could define the new normal for supply management, according to Shay Scott, executive director of the Global Supply Chain Institute at the University of Tennessee, Knoxville’s Haslam College of Business.
How do we cope with the new normal? Supply chain innovation, from automation to multi-dimensional systems, helps organizations address problems with modern strategies.
Below, we’ll outline emerging technologies in supply chain management, how businesses incorporate them, and the extent to which they will affect the supply chains of the future.
Top trends in supply chain technology
For decades, the highest achievement in supply chain management was cost-cutting. Today, this goal is joined by customer satisfaction, efficiency, and sustainability. So while cost reduction remains a priority, it no longer automatically equals victory.
Scott, a leading expert in supply chain innovation, teaches that modern-day supply chains must not only deliver customer value profitability but also work in almost every area of the business: customers, suppliers, sales and marketing, finance, and senior leadership.
To innovate successfully, supply chain managers must do the following:
- Gain visibility: Real-time data for handling goods and materials at any stage of the supply chain is critical for effective management. Supply chain visibility lets companies assure consumers that the products they’re buying are sustainably sourced from both an environmental and social perspective—just ask H&M, which recently released its supplier factory map. Having this data enables companies to maintain control, enforce policies and laws, and respond quickly to problems before they escalate.
- Predict the future: Though not a crystal ball, predictive strategies anticipate patterns to proactively resolve issues before they occur, meet demands without overstocking, and minimize costs. In the current trade environment, shippers must be prepared for anything. Having sophisticated systems in place increases options when a supplier is unavailable.
- Hire data teams: Successful supply chain management requires robust investments in emerging technologies, not just at the material level. Without dedicated human resources for data teams, organizations fall short. That’s because supply chain data teams offer a range of dynamic advantages beyond implementing new systems. They thoughtfully analyze data, produce insights, and recommend growth strategies.
Innovative supply chain technology tools
Staying competitive requires adopting the most advanced supply chain technology. Mary Long, director of the Supply Chain Forum, says it takes understanding what to go after to create supply chain efficiencies. Enterprises such as the Kraft Heinz Company (North America’s third-largest food and beverage company) and McCormick & Co (Baltimore-based maker of spices and seasonings) invest in supply chain innovation to create efficient, sustainable, and socially responsible supply chains. Both companies are designated as a “Shipper of Choice” by FreightWaves, which ranks the industry’s most innovative and disruptive companies.
Here are some of the innovative tools and emerging technologies in supply chain management:
Big data. Massive amounts of data is generated every single day. Each minute, 4.5 million searches are entered in Google, 18.1 million text messages are delivered, and 188 million emails are sent. Mobile devices such as wearables, smartphones, and tablets generate significant daily data usage. With so much information at our disposal, it takes complex computing techniques to gather, sort, clean, and analyze large data sets. Data science and analytics allow companies to use data to gain valuable insights and revolutionize. Big data brings value and assistance to the following areas of supply chain management:
- Quality control
- Cash flow
- Real-time deployment
- Warehouse efficiency
- Weather patterns
- Predictive strategies
- Inventory, supply, and demand
Artificial intelligence and machine learning. AI and machine learning create fully- or semi-automated processes and procedures for supply chain optimization, which improves logistics forecasting, planning, implementation, and maintenance by emulating human performance and knowledge. AI and machine learning boost the end-to-end supply chain in at least five ways:
- Tightening data security
- Applying predictive modeling to third-party logistics
- Providing full supply chain visibility to improve management of key performance indicators (KPI)
- Automating inventory management, shipping transactions, and delivery routing
- Improving customer service
Internet of Things (IoT). Streamlined connection across various devices increases visibility and connectivity while reducing costs. Wearables and mobile devices like Apple Watches, Fitbits, and smartphones are especially useful in warehouse settings. Wearables, in particular, provide solutions that lead to a “touchless” supply chain, eliminating the labor-intensive selection of items from inventory to fulfill a customer order. The IoT allows warehouse and logistics managers to track inventory and monitor equipment securely. Other benefits include:
- Improved asset utilization
- Better customer service
- Streamlined inventory and supply availability
- Safer and more reliable work environments
5Gs. According to Qualcomm, 5G is foundational to further supply chain innovation. Gaining real-time data is difficult when suppliers lack connectivity. Supply chain visibility becomes spotty without 5G. Third-party logistics is possible through 5G because it elevates mobile networks through multi-Gbps peak rates, ultra-low latency, and massive data capacity. High-level performance, increased efficiency, and new user experiences become available when 5G interconnects people, machines, objects, and devices. 5G further offers the power to:
- Extract larger amounts of data concerning location, temperature, pressure, and other information that is critical in the end-to-end supply chain
- Ensure uniformity of information sharing with all stakeholders
- Resolve issues that time delays would otherwise aggravate
- Understand precisely where raw materials come from
The Cloud. At any point in the end-to-end supply chain, companies track materials and products, get real-time updates, and inform customers of order status. This is possible because of cloud computing. Cloud-based solutions enhance data storage space, integration, security, and information sharing. Activities and processes are streamlined between multiple devices and an enterprise of software users.
Advanced supply chain management software. Advanced software has disrupted the industry. Logistics companies must incorporate emerging technology into their supply chain systems to stay competitive. Businesses feel compelled to track the latest supply chain innovation because of consumer demands on cost and delivery speed and the increasing popularity of customer rating metrics. As technology advances, supply chain software becomes more complex, allowing companies to avoid mistakes, modify orders, communicate across various media channels, and automate shipping. G2—a tech marketplace where businesses discover, review, and manage industry technology—lists the following software companies and tools as the most popular in the industry:
| Supply Chain Suites Software | Demand Planning Software | Distribution Software | Inventory Management Software |
|---|---|---|---|
Unlocking the Future: Emerging Technologies in Supply Chain Management Set to Transform the Industry
The industry’s future will lean into supply chain innovation and optimization tools that support efficiency and automation.
These are other software trends experts predict will be essential to supply chain management in the coming decades:
- Autonomous mobile robots (AMR). Supply chain giants like Amazon have discussed using AMRs in the past, but they haven’t been widely adopted across the industry. While warehouse management systems will continue to schedule loading and unloading, AMRs may be used to optimize the picking process.
- Truck collaboration. Truck manufacturers and shippers preparing for a recession are investing in manufacturing and collaboration software systems. More advanced systems allow trucking companies to strengthen their monitoring of the market, automate processes, and cut costs.
- Distributed inventory. Current software isn’t providing the analysis needed to keep up with distributed inventory, making it harder for companies to keep up with innovative shipping demands. A tool called distributed inventory flow forecasting (DIFF) predicts the flow of materials, enabling businesses to maximize the order fill rate and maintain reduced inventory.
- Driverless vehicles and drone delivery: Driverless and drone delivery options provide companies with a solution to various issues. Not only does this minimize cost by lowering the amount of human intervention, but it also improves access to remote and hard-to-reach rural areas. While some have been skeptical of this technology in the past, it may be a solution for the future, particularly in light of the shortage of available human drivers.
- 3D printing: This game-changing technology can replicate and produce replacement parts for products using metals and plastics. Rather than stocking items in a large warehouse to be shipped worldwide, companies can contract local 3D printing shops to print and deliver products within days. The benefits of inventory and space management also transfer to the consumer level, improving customer satisfaction.
- Blockchain. The exchange of goods across different countries often affects supply chain transparency. Invoices and shipments can take several months to process, never mind the complexity of greater volume across multiple organizations. Blockchain can potentially transform supply chains by providing more traceability and security. Widely popularized by its cryptocurrency ability, the blockchain can also assist companies by managing contracts and agreements and monitoring financial transactions and products.
Improve your Knowledge of Supply Chain Technology with the Executive MBA for Global Supply Chain at the University of Tennessee
There are many reasons to pursue the Executive MBA for Global Supply Chain at the Haslam College of Business. UT offers an industry-centered curriculum led by expert faculty dedicated to understanding emerging technologies for the future of supply chain management.
Learn more about the Global Supply Chain Institute, EMBA-GSC, and the educational opportunities available for you to advance your career.