As the decades unfold, there have been many tipping points inducing smaller and bigger changes in supply chains. Be it globalization or internet proliferation, the latest round of innovations is brought in by new supply chain technologies.
Prompting companies and entrepreneurs to think past COVID-19 struggles, these technologies are forging a way ahead for efficiency and resiliency. Read this article to discover information on how new supply chain technologies can help ecommerce brands become better and more agile.
New Supply Chain Technology- A Route to Efficiency and Resiliency
The future of the supply chain is built on the foundations of new supply chain technology or the application of processes that are automated. These technologies improve human decision-making and augment business outcomes. They are tested by experts around the world who testify to their accuracy, reliability, and functionality to drive faster results.
In recent years, a number of these technologies have arrived. The most notable ones include artificial intelligence, robotics, and futuristic predictive algorithms. When businesses imbibe these technologies in their day-to-day operations, it leads to supply chain efficiency.
An efficient supply chain facilitates the flow of products on time at the right place, incurring the lowest cost variable. About 92% of manufacturing executives believe these technologies will give them a better competitive advantage and flexibility.
This is what is required to succeed in the post-pandemic recovery period. They can diversify geographically, ensure end-to-end visibility, analyze risks, and withstand labor shortages with the new supply chain technologies.
Top 6 Technologies that Are Revolutionising Supply Chain Today
New supply chain technology opens up a portal to a resilient, responsive, and efficient supply chain. Below, we discuss six technologies & their role in shaping supply chains to their newfound disposition.
1) Digital Twin and Control Tower
Digital twins are computer models that replicate the physical supply chain components in virtual form. A digital twin is a combination of multiple technologies that build the supply chain simulation in virtual reality. It involves cloud computing, advanced analytics, and augmented reality, amongst others.
Control towers, similarly, are programs that monitor and manage the supply chain. Digital twin amalgamated with control tower emulates human capabilities in taking critical decisions and communication. Moreover, they decipher complex patterns and forecast supply chain bottlenecks with end-to-end visibility and traceability.
Companies should merge their supply chain twin with the control tower for end-to-end decision-making, testing new developments in the supply chain, and forecasting data. If they fail to do so, a study by Gartner (consulting and technological research firm) predicts that 80% of them will incur heavy losses by 2026.
2) Robotics and Automation
Automation fostered by robotics has helped raise warehouse efficiency dramatically over the past decade. When the technology first developed in the 1950s, it was restricted to industrial manufacturing. However, today robotics have become commonplace in logistic facilities.
Some common forms of robotics and automation include automated storage and retrieval systems, AI-led sorters, and automated guided vehicles. These systems can help reduce order picking costs by 50% and improve the speed and accuracy of order picking and packing.
The development of automated driving vehicles like self-driving trucks is also undergoing. Experts believe autonomous vehicles will help raise last-mile delivery efficiency and tackle driver shortage concerns. The Gartner study has foretold that 75% of large companies will adopt at least some aspect of intralogistics robots in warehouse operations by 2026.
3) Cloud computing and Artificial Intelligence
A primary concern in supply chain management is to enhance decision-making and resource efficiency by harnessing troves of data. The new supply chain technologies useful for this are cloud computing and artificial intelligence.
Cloud computing systems like AWS, Microsoft Azure, and IBM Cloud are known to assist businesses in storing their supply chain as digital data. Businesses can deploy data science algorithms to analyze sales data. They can develop business processes anytime and collaborate with multiple departments across geographies without running the risk of losing them.
The dynamic capacity of AI to imitate human behavior makes it an excellent tool for handling routine tasks and running them on autopilot. AI algorithms can process data in seconds, which eventually enhances capacity planning. Applying AI, companies can accurately plan inventory, improve warehouse variables, plan on-time delivery, etc.
The benefits of cloud computing and AI have made them indispensable in supply chain management. According to Accenture, 52% of companies shifting to cloud computing during the pandemic have seen an increase in resiliency. They also witnessed a 26% rise in demand forecasting accuracy and a 5% growth in revenue.
4) Blockchain and Big Data
When it comes to infusing transparency into the supply chain, nothing works better than blockchain. Blockchain acts as an ‘immutable ledger’ containing information about financial transactions. The recordings of the transactions can be easily traced and verified.
When applied to the supply chain, it can additionally trace information flows and inventory flows. With blockchain, companies can dramatically reduce missing shipment cases, duplicate payment instances, and errors in inventory data. Because of its accuracy metric, Blockchain is actively used by software and retail giants like Walmart, Proctor and Gamble, and IBM.
Like blockchain, big data analytics holds the potential to transform supply chain management by analyzing all forms of alpha-numeric data. It brings an astounding capacity to generate critical insights for operational effectiveness. With big data analytics, enterprises can evaluate supplier performance, monitor hidden costs, reduce costs and maximize production.
5) Internet of Things (IoT)
IoT technology is commonly understood as things that have sensors like Radio Frequency Identification (RFID), barcode readers, and GPS monitors. IoT technology is best used in manufacturing and transportation to support production, monitor freight, and manage fleet locations.
IoT sensors are well-suited to create a chain of tracking data which is especially helpful in monitoring asset mobility in the logistics journeys. IoT sensor data can be used to oversee misplaced inventory, check the temperatures of time-sensitive goods, and reroute deliveries.
Since IoT technology assists businesses in coping with inventory control and revenue loss, they are heavily deployed in the logistics sector. Industry study projects that by 2027, the IoT market can grow by 24.9%.
6) Predictive Data Analytics
Predictive analytics combines historical data and statistical modeling to derive future projection results. Predictive analytics, when paired with deep learning algorithms, can give insights into supply chain bottlenecks and emerging risks.
Predictive data analytics has multiple applications in supply chain management. Some of these include route mapping, warehouse optimization, auditing logistical processes, and supplier analysis.
However, the foremost use case is demand management and forecasting. Predictive analytics mixes a series of data mining, AI algorithms, and statistical models to forecast future sales and anticipate customer demand.
It is known to be at least 50% more accurate than other quantitative and quantitative methods. It is proven to reduce error margins by 30%-50%. Demand management and forecasting are critical areas that oversee production cycles and inventory management. Manufacturing businesses can deploy predictive data analytics to optimize production cycles.
5 Ways Implementing Technologies Will Boost Supply Chain Efficiency
Here are some of the ways new supply chain technology can boost its efficiency:
1) Improve order accuracy and on-demand delivery scenarios
Order accuracy and on-demand delivery rates are two metrics that confirm the capacity of any company to satisfy customers. Without recourse to proper technology, it is difficult to ascertain that all the orders are picked and packed correctly or delivered on time. AI algorithms and big data analytics can find the right route to deliver orders on time.
The traditional order-picking process is highly labor intensive and requires the use of cumbersome and heavy equipment. To pick one wave of orders manually can demand extensive time and cost. However, IoT and robotics technology can slash costs and time consumption, minimize picking errors and hasten order fulfillment.
2) Promote end-to-end visibility and agile risk management
A supply chain comprises multiple partners, therefore, fostering a culture of transparency with end-to-end visibility can help keep the trust intact. Real-time integrated tracking can help all stakeholders do their part to meet customer demand on time and keep risks at bay.
Technologies like IoT, blockchain, and digital towers can help improve connectivity, manage the logistics flow, and monitor order cycles. With these tools, companies can limit the risks of lost inventory, misplaced shipments and reduce revenue loss. Moreover, some of these technologies require minimal infrastructure, lessening the risks of scaling them up.
For example, IoT devices like RFID chips are smart labels that store product information for fast end-to-end tracking. Big data analytics can give insights on EDD predictions. AI algorithms can forecast demand.
3) Improve logistics operations and demand responsiveness
Improving demand responsiveness and logistics operations accuracy must require technology that can follow trend projections and capacity planning. Since the pandemic times, there has been real concern over skewed consumer behaviors and unpredictability in the supply-demand ratio.
In these ever-changing market conditions, machine learning (ML), advanced data projections, and big data can have proven to be especially helpful. These technologies promote warehouse efficiencies, upgrade delivery workflows and enhance compliance directives. For example, blockchain can accurately track inventory flows and monitor financial performance.
Similarly, automation gadgets like cobots can assist staff in speeding up inventory storage, retrieval, and movements in production workstations. Cloud computing and AI enable vendors to keep track of inventory for quick replenishment and prevent stock-outs.
4) Boost supplier-vendor collaboration and communication
One of the best ways to withstand volatility and supply fluctuations in the supply chain is to collaborate with multiple vendors and suppliers. Be it the local suppliers or international manufacturers, finding partners that do the job quickly is the key to solving unmet demand.
To improve the search for suppliers/vendors, companies can analyze the business capacity of potential partners and vet their procurement strategy. Employing fast, effective, and reliable technology can integrate communications in a single channel. It can further match retailers with the right producer and foster greater connectivity among the partners.
Technology can thus improve supplier-vendor collaboration and create a holistic ambiance where every operational element is visible. With digital twins, companies can analyze potential challenges and communication gaps and prevent any supplier oversight.
5) Get accurate demand forecasting and predictions
New supply chain technologies can anticipate warning signs so that businesses can incorporate mitigation strategies to avoid risks. Two such risks are unpredictable customer demand and unprecedented weather. Both these situations can disrupt and halt supply chains.
Big data analytics and ML can analyze past records and provide early warning signals, such as anticipating demand dips or oncoming cyclones.
Businesses can use tools like Kinaxis, Logility, Oracle, and Tableau to review supplier behavior and predict potential anomalies. One such example is the breach in contracts. Forecasting and prediction tools can prepare retailers for situations of high turnover rates and increase in customer demand.
A supply chain is a complex web of relationships and processes that control how goods are produced and sold. In its vast array of operations, it is easy to lose control over assets and for inefficiencies to creep in.
This is why technology promotes automation, decision accuracy, and control over supply chain aspects is important. Thankfully, there are multiple new supply chain technologies emerging that will uplift their supply chain efficiency and resiliency.
1) How is 3D printing useful in the supply chain?
3D printing has a special role in the supply chain. It is a manufacturing technique that helps businesses increase production scale. 3D printing can cut costs for expensive hardware, reduce carbon footprint, and even allow production to occur in local assembly hubs.
2) How much does it cost to implement new supply chain technology?
Implementing new supply chain technology can be expensive. For a small business with an annual revenue of less than $50 million, the cost of upgrading their SCM software equipped with digital twins, control tower, and AI can cost $30,000 on average. Big businesses can, however, incorporate more technology customizations into their SCM software, and the cost can be $171,000 on average.