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Supply Chain Technology Developments We Look Forward To

5 Supply Chain Technology Developments That Are Changing The Game Cars that can park themselves, pocket sized computers constantly connected to the Internet, and the ability to program your home from anywhere on the globe are just some of the ways new technology is fundamentally altering how we interact with the world. The fancy gadgets that ease everyday life are the things we see, but behind the scenes, the same technology is reshaping the way we understand and approach our supply chains. Today, you can monitor your supply chain from raw material to point of sale and beyond in ways that were unimaginable just a decade ago, and in some cases even just a few years ago. [su_divider top="no" size="2"]

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[su_divider top="no" size="2"] Big Data and the Internet of Things, advances in barcode and RFID monitoring, the use of automation and robots, and 3D printing are just some of the things changing the way we move inventory across the globe and within stores or warehouses. While these new tools and technology are providing greater opportunities for supply chain optimization, challenges remain. A recent Wall Street Journal article explains that, “It took an average of nearly seven days, or 20% longer than last year, for orders placed on Cyber Monday to arrive, according to retail consultancy Kurt Salmon.” These supply chain disruptions are becoming more costly. In a study by Deloitte, 53% of the global executives surveyed said that supply chain disruptions had become more costly over the past 3 years, but 45% also said they found their supply chain risk management programs only somewhat or not at all effective. Companies need to take advantage of new technology if they want to stay ahead of their competitors and keep up with their demanding consumers. According to the State of Small Business Report 2016, 44% of companies plan to increase IT spending. According to a recent study by SCM World, only 11% of IT budgets go towards new developments. [Tweet "According to the State of Small Business Report 2016, 44% of companies plan to increase IT spending."] If you are looking to keep pace with the new technology and developments, here are 5 supply chain technology developments you should be watching in 2016:

Moving from Supply Chain Visibility to Supply Chain Control

Advances in satellite and radio technology are leading to exciting developments that enable us to move beyond just monitoring inventory as it moves along the supply chain. A whopping 90% of global trade is done by sea shipping according to shipping magnate CMA CGM, and yet “7 out of 10 global shippers lack the visibility in their supply chains needed to prepare and respond to disruptions,” according to the Zurich Business Continuity Institute’s Supply Chain Resilience Report. To improve its handle on the supply chain, CMA CGM has partnered with technology company Traxens to create a shipping container monitoring system that provides both insight and control. It may enable shipping companies to better handle supply chain disruptions and it has potential applications far beyond the sea. The new system, in place in CMA CGM’s new 18,000 TEU flagship Bouganville, uses GSM satellite and Traxens’ own radio-mesh technology. As reported by Supply Chain Digital magazine, the specially equipped shipping containers can record information such as location, temperature, humidity level, vibrations, impacts, attempted burglary, customs clearance status, and more. This information can be analyzed to improve resource allocation and efficiency. More important than the monitoring, the new system enables control, meaning temperature or humidity levels can be adjusted as needed. While this system was designed specifically for shipping containers, it shows the enormous potential of new wireless communication capabilities.

Big Expansion in Big Data

Over the past few years, excitement has been building over the Internet of Things, the increase in internet connected devices that allow us to capture information about and connect with our world. According to experts, by 2020 there will be as many as 25 billion devices connected to the Internet, producing huge amounts of data and allowing increased information sharing. From barcode based inventory systems to the increase in RFID tags and other monitoring systems, companies are gaining incredible insight into how things are made and then move around the world. New software systems enable organizations to take this data and translate it into actionable information, whether for forecasting needs or for optimizing operations such as improved warehouse or stockroom layouts and new shipping schedules and routes. Big data can also mean big savings. According to Supply and Demand Chain Executive, “The implementation of an effective Big Data strategy often can yield a 10-25 percent reduction in operating costs, 10-50 percent reduction in assembly costs and can generate an increase of up to 7 percent in revenue. The factory of the future will be able to deliver this Big Data analysis on a smartphone, a tablet or on a desktop on the shop floor, act on the data, then push information back to the field, the production line or out to a supplier.” Beyond just improving their own operations, companies can use the IoT and big data to provide better customer service. Arrow Electronics sees the potential to build a smart, connected supply chain that automatically notifies customers when a shipment is running late so they can make their own adjustments to transit time, scheduling, and manufacturing processes.

Automation Advances: More Machines Making and Moving Machines

From 3-D printers to self-moving shelves, advances in robotic processes are reaching a tipping point and big changes are coming. According to Alex Niemeyer, a director at McKinsey, “I think 3-D is an absolutely disruptive force to manufacturing.” Changes will likely start with companies who have spare parts or tricky logistics, because, “3-D printing and much better forecasting, can actually help substantially reduce how much inventory you have to keep or shorten the lead time by which you need something.” More exciting, and terrifying, than 3-D printing, are advances in robotics and automatons. Big machines doing big things at big manufacturing factories is not new. These machines work on assembly lines and do the same thing over and over again. Having a machine that can fulfill unique online orders or move inventory around a warehouse is new and very exciting. Kiva Systems, a robotics maker acquired by Amazon, has been creating new robotic warehouse solutions that are revolutionizing the way companies like Staples and Amazon manage their warehouses and shipping operations. Shelves that can move themselves and optimize layout are one current use. They work well with humans who still need to do the tasks that require improvisation or fine manipulation. Firms like Fetch Robotics are working to push things to the next level with robots that could move products on and off shelves.

Sustainable Supply Chains

With the “landmark accord” reached in Paris, the world has spoken, sustainability is the only way we can sustain life on this earth. Companies need to take heed. Creating sustainable supply chains is the path of the future, and is more important to customers than ever before. Luckily there are exciting new technology developments making it both possible and profitable. Continuous advances in solar and wind energy are bringing prices down while improving access and many companies are beginning to incorporate renewable energy into their supply chain operations. Some companies aren’t waiting for the next energy development, they are trying to create it. Apple has taken a lead on renewable energy use and generates 87% of the energy used by its facilities around the world. The goal is to reach 100%. It does it through a combination of solar, wind, bio-gas, and fuel cells, and now the company is even working to develop its own renewable energy sources with an ambitious partnership with First Solar. They plan to bring a new system in Monterrey County online in 2016 and it will power Apple Campus 2, all their California offices, all 52 retails stores in California, and the company’s data center in Newark, California. You don’t have to be as big as Apple to take advantage of renewable energy and to use smarter supply chain strategies to reduce your environmental impact. New technology will make it easier and easier to go green and into the black. There is a lot to look forward to in the world of supply chain management and technological advances we see coming in 2016 will continue to bring big changes. It is important to make sure your company is prepared for the new connected world and in many cases getting a handle on your supply chain starts with understanding your inventory and assets. Putting in place a good inventory and asset tracking system is the first step to harness the potential of new technologies. Is your company prepared for the changes to supply chain management coming in 2016?