The Continuing Impact of 21st Century Supply Chain Technologies

October 22, 2019

The field of supply chain management is changing rapidly and experiencing significant growth. A supply chain is a network that produces and distributes a product from seller to buyer, and there are supply chains in almost every field. Technology is changing how we manufacture and deliver goods, and experts believe these changes will drive down costs.

Knowing how supply chain technology functions and the systems that are currently in place is critical to anyone looking to create a sustainable supply chain, particularly for someone working in supply chain management. Having a leader with a strong background in technology and innovation will benefit any company working with a supply chain, and understanding technology and data is important to supply chain management of the future. Customer satisfaction is also linked to the supply chain systems created. Therefore, as a supply chain manager, a background in the technologies that make up the supply chain will improve your career prospects and benefit the company’s business objectives as a whole through increasing customer satisfaction and creating money saving systems for the company.

Data and the sustainable supply chain

Data is revolutionizing the supply chain field in many ways. In fact, some manufacturers use big data and cloud-based technologies for over 80 percent of their supply chain management data tracking, rather than using legacy systems on a hard drive. Supply chains generate over 52 different types of data, and storing and manipulating this data allows companies to bring down costs and not rely on the previously mentioned legacy systems as much. Additionally, the forecasting tools of data science and machine learning are being employed to understand demand, which in turn saves manufacturers money by not over-producing. If a company needs to manufacture a certain number of shoes, for example, they can use forecasting tools to incorporate seasonality and industry-wide trends, instead of relying solely on internal datasets. The tools that allow a data expert to combine data from various sources and analyze it are greatly beneficial to supply chain management.

The supply chain goes beyond the manufacturing of products—it also includes packaging and delivering. Big data plays a role in routing algorithms that help companies deliver goods efficiently, and understanding these algorithms is essential. Apps like Uber and Lyft make use of these algorithms, but anyone looking to move product via roads can utilize the same tools. Furthermore, to package and deliver goods, communication between different areas of the supply chain is paramount, and big data technologies allow faster information transfer which improves reaction time to issues at all levels of a supply chain. If something goes wrong at an earlier step in the supply chain, the chances of fixing the problem earlier improve when communication technologies are employed.

Operations management sustainability will also improve through the use of data. Operations management specialists seek to create the maximum amount of efficiency in an organization, so for companies producing physical goods, that extends into the supply chain. The same supply chain technology that leads to increased sustainability helps all leaders in the operations management field. Data has transformed operations management in recent years, and the field continues to become increasingly more sustainable with new technological advances and in demand.

21st century supply chain technologies: Looking back 10 years

The last ten years have seen rapid growth in data usage in supply chain management. E-commerce, in particular, has changed the way supply chains use data. The main expenses of a supply chain are transportation, labor, inventory carry, and rent. E-commerce companies like Amazon have worked to use data to bring down all of these costs. For example, automation decreases the price of labor, and autonomous vehicles are poised to decrease the cost of transportation. As transportation has become more affordable, companies have been able to store goods in remote locations, lowering the cost of rent. All of these changes took place because of the decreasing costs of data storage and increasing automation made possible by big data technology.

Technologies lead to more advanced types of supply chains. For example, concurrent supply chains are made possible by scheduling technology. To have multiple aspects of a supply chain running simultaneously in a concurrent supply chain, it’s important to carefully track when loads are scheduled and completed to ensure there are no bottlenecks, and that there’s no double-demand for resources. In the past ten years, cross-functional supply chains have become increasingly prevalent, and using supply chain technology to support these concurrent functions is necessary. The continuous-flow supply chain produces a product continuously, rather than in response to specific demands. The forecasting tools that utilize artificial intelligence enable this type of supply chain to function without over- or under-producing.

The tracking and transparency brought about by data analytics have also transformed supply chain management in the last ten years. Data has also allowed for increased transparency into the functionality of a supply chain. For example, Radio Frequency Identification (RFID) chips have allowed people to see exactly where goods are at every step of the product and allow for improved inventory tracking. New software tools allow a supply chain manager to view all aspects of the supply chain in the same place and therefore gain a better understanding of any bottlenecks. Visualization tools have transformed many areas of business, and the supply chain is one of them—if a supply chain manager has advanced supply chain visibility, they can make more informed decisions about how to improve upon it.

21st century supply chain technologies: Examining the next 10 years

Growth in the supply chain field, in general, is positive, and the number of open jobs is expected to increase at a rate of 7 percent over the next ten years. Data is expected to continue having a significant impact on the supply chain. In fact, knowledge of automation and information technology has been cited as one of the most desirable skills for a supply chain leader. In particular, the use of robotics could revolutionize the supply chain in the next decade. Robots are now performing tasks such as packing cartons and approving deliveries, and growth in robotics technologies will continue as the use of big data proliferates.

Disruptive supply chain technology, such as drones, are increasingly becoming more useful to the supply chain. Ted Stank, Harry J. & Vivienne R. Bruce Chair of Excellence and professor of supply chain management at UT Haslam’s College of Business, explains that “there are a lot of supply chain-related applications for drones that do not require last mile delivery of products.” In particular, drones can be very useful in delivering to rural locations, which is typically very expensive. They can also assist in maintaining a more sustainable future. Professor Stank states, “every time a delivery is made by a drone and not by a truck or car, then the carbon footprint is reduced.” While there are still a lot of challenges to overcome with respect to drone usage, it is a promising, and sustainable, solution in the coming years.

Increased use of data will also result in increased customer satisfaction over the next ten years. Supply chain technologies allow companies to integrate multiple different types of software, which minimizes errors. Errors, as well as delays, are a common cause of customer dissatisfaction. Customers waiting for a product or retailers looking to stock their inventory may find themselves frustrated if the product doesn’t arrive on time—and supply chain technologies that reduce errors and increase processing times through the use of AI will improve customer satisfaction.

The importance of sustainability will alter supply chain management in the coming decade as the world fights climate change. Supply chain managers can use data to cut down on resources, which could have a strong environmental impact while also increasing customer satisfaction. Not only will this benefit the environment and customer satisfaction, but it will also save money for the organization. Transportation is the biggest cost in a supply chain, and using data to find optimal ways to move goods with fewer resources will be critical in the coming decade. Experts predict that supply chain companies will want to employ a sustainability leader by 2025.

Ensuring success of data implementation in the supply chain

Supply chain managers and upper management have a critical role to play in ensuring the success of data implementation in the supply chain. A willingness to use data is critical, as is a desire to learn about new supply chain technologies. There are a growing number of optimization tools that can be incorporated into a supply chain, but supply chain managers must be willing to test them out. Not all tools are equally effective or appropriate for a specific organization, so experimentation is necessary. Having an understanding of the value of analytics, even without the technical skills to run the analyses, will enable a supply chain manager to make educated decisions on where to incorporate supply chain technologies.

A supply chain manager can determine the appropriate budget and resources that will be invested in developing new technologies. They can choose to hire engineers and data scientists with a background in machine learning to improve functionality. The lack of data knowledge by supply chain managers is cited as one of the two big challenges in improving supply chains in the coming years. A supply chain manager without a technology background can compensate for their lack of technical knowledge by hiring experts in this area.

Haslam’s online Master’s in Supply Chain Management

UT Haslam’s leading in supply chain management instruction and expertise is now offered online. The online Master’s in Supply Chain Management (MSSCM) includes coursework that enables supply chain leaders and prepares them for the widespread use of data and technology in supply chain management.

While being offered completely online, which increases accessibility for students who won’t attend on-campus courses, the hands-on MSSCM program maintains fluid communication between professors and students. Candidates learn to work with companies and other partners on remote teams to incorporate technology into supply chain management.

To learn more, visit the online MSSCM site.