The Future of Supply Chain

The Future of Supply Chain

The pandemic has worked as a double-edged sword for the supply chain management. While on one hand it completely disrupted supply chains across industries, on the other hand it re-emphasized their critical nature, redefining the need to integrate technology to not only survive and sustain but also prepare for the unforeseen in the future. 

Consequently, from a “behind the scenes” organizational role, supply chain has transitioned to a key driver for enabling resilience and agility in an organization’s business operations. The digital era has provided a strong scaffolding to revamp this ecosystem, with industry 4.0, digital transformation, emerging technologies such as AI, ML, blockchain, and big data and analytics, along with the ever-growing cloud computing, playing revolutionary roles here.

The Changing Role of Supply Chain

With the supply chain infrastructure transitioning from conventional to digital, powered by the application of various technologies to every aspect of the end-to-end supply chain, some of the major trends that are expected to emerge include:

Stronger emphasis on resiliency and risk management: Building operational flexibility and resiliency has become critical to effectively deal with mid-and long-term pandemic-related disruptions. Further, the various supply chain vulnerabilities are also going to be put under the spotlight, including where businesses source their raw materials from and the risks associated with them if the company relies on a single source; existence of any part of the supply chain that lacks visibility; or if there are any critical areas in the value chain that are completely out of the company’s control, amongst others.

Enhanced role of Artificial Intelligence (AI): Automation has become a vital part of almost all business processes in the last few years; AI has proved to be the underpinning force for the success of automation in supply chains. The use of AI-backed solutions and technologies across operations and workloads are known to save time, reduce human-based errors, and therefore, increase operational efficacies. It is also helping in better utilization of talent workforce for more complex workflows instead of routine, transactional tasks that can be done by technology.

Greater emphasis on blockchain: Research shows that the global supply chain market for blockchain will grow at a CAGR of 80.2% through 2025[1]. With a growing need for end-to-end transparency across the value chain, blockchain’s database structure can set supply chains up for success. Obscurity in data sharing can often result in negative outcomes across a supply chain, but blockchain ensures that data is shared with all the concerned parties in a secure and absolute form.

Supply Chain as a Service (SCaaS): As digital supply chain ecosystem becomes a reality, organizations would be seen outsourcing more and more of their manufacturing, distribution, procurement, logistics, transportation management, and much, working with third-party logistics providers and thereby, leveraging supply chain as a service[2]. This would result in better customer service, increased productivity and lower costs, along with boosted asset management.

Last-mile delivery services: The pandemic has significantly disrupted the consumer buying patterns and behaviours resulting in a paradigm shift in online shopping from physical stores, bringing point of sales closer to home, services like doorstep deliveries, and much more. In order to connect the dots between the sellers and buyers, retailers and logistic companies are opting for last-mile delivery software solutions that can help businesses adapt themselves to meet the new demand of consumers and make last-mile deliveries quicker, more flexible, safer, and highly efficient, adding to the need for digital supply chains. Further, as per a Forrester study[3], almost 1/5th of the businesses across the globe are considering use of commercial drones for automating their operations in 2021. This is expected to tackle the expected roadways traffic congestion issues arising due to enhanced last-mile delivery solutions.

Layered technologies: Technology is fast proving to be the backbone for powering the digital supply chain and logistics ecosystem, and therefore, in the coming years, there would be a stronger push towards layering and combining technologies, removing data silos in the supply chain, and developing dynamic, actionable data across the technology stacks. This would enable businesses to look beyond the conventional two-party transactions and create a swivel-chair functionality.

Way forward

By embracing innovation in the form of various technologies, organizations need to ramp up their supply chain technology initiatives to be prepared for unexpected challenges and help organizations in achieving higher operational efficiency. And so, for organizations to become future-ready, it is imperative that they partner with technology solution providers to create a well-defined roadmap for their digital supply chain architecture. Companies such as SAP offer Supply Chain Management software that encompasses industry best practices, automation, IoT, and predictive analytics to offer a well-rounded solution to customers of all sizes.