As much as 65% of the value of a company’s products or services is derived from its suppliers—and its supply chain—a statistic that clearly illuminates the supply chain’s value and importance. As these global, end-to-end networks become increasingly complex, the need for advanced technology to manage them grows exponentially.
A recent IBM IBV Global Chief Supply Chain Officer (CSCO) study, for example, pinpointed a “lack of visibility and transparency” as the greatest hurdle to achieving supply chain objectives. “This largely stems from an inability to analyze the enormity of data scattered across various processes, sources, and systems,” Brian Bailey writes in Top Supply Chain Trends for 2017.
The good news is that innovation is also evolving at a rapid rate and incorporating some interesting new applications for artificial intelligence, digital twins, and blockchain. Here are three to keep an eye on during the year ahead:
Artificial intelligence (AI) as a business tool versus a science fiction project. The ability to use AI to enhance decision making, reinvent business models and ecosystems, and remake the customer experience will drive the payoff for digital initiatives through 2025, according to Gartner, whose recent survey showed that 59% of organizations are still gathering information to build their AI strategies, while the remainder have already made progress in piloting or adopting AI solutions. “Over the next few years every app, application, and service will incorporate AI at some level,” SupplyChain247’s Kasey Panetta writes in Top 10 Strategic Technology Trends for 2018. “AI will run unobtrusively in the background of many familiar application categories while giving rise to entirely new ones.”
Using “digital twins” for asset management, improving operational efficiency, and making better products. A digital twin is a digital representation of a real-world entity or system. “In the context of the Internet of Things (IoT), digital twins are linked to real-world objects and offer information on the state of the counterparts, respond to changes, improve operations, and add value,” Panetta writes, noting that Gartner expects an estimated 21 billion connected sensors and endpoints by 2020. “Potentially billions of dollars of savings in maintenance repair and operation (MRO) and optimized IoT asset performance are on the table,” a Gartner analyst told SupplyChain247. “Over time, digital representations of virtually every aspect of our world will be connected dynamically with their real-world counterparts and with one another and infused with AI-based capabilities to enable advanced simulation, operation, and analysis.”
Blockchain as the ultimate enabler of commercial transactions between “untrusted” parties. As a shared, distributed, decentralized, and tokenized ledger that removes business friction by being independent of individual applications or participants, blockchain allows untrusted parties to exchange commercial transactions. “The technology holds the promise to change industries, and although the conversation often surrounds financial opportunities, blockchain has many potential applications in government, healthcare, content distribution, supply chain, and more,” Panetta writes, noting that at this point, “many blockchain technologies are immature, unproven, and largely unregulated.”
As the supply chain of the future continues to come into focus, expect to see more digital innovation and disruption ahead on the technology front. “The supply chain of tomorrow will be leaner, faster, and most importantly, self-orchestrated,” Forbes’ Sarwant Singh points out in Future Of Logistics: Five Technologies That Will Self-Orchestrate The Supply Chain. “This unprecedented pace of change will be driven by a few radical technologies that will be cautiously adopted by industry participants over the next 15 years.”