Supply chains in 2017 have rapidly evolved from the supply chains of twenty, or even ten, years ago. Does this mean that today’s supply chains will be antiquated entities compared to supply chains just ten years from now? Is the speed of change for supply chains here to stay? Or have we seen the biggest developmental leaps, and now things are bedding down once more?
Here we take a look at the changes that have occurred in supply chains, and the changes that are still happening, with a view to painting a picture of the supply chain of the future.
The Metamorphosis that is Technology
It’s so blatant and all encompassing, but the single biggest harbinger of change in supply chains is technology. No one, just 20 years ago, could have forecast the monumental impact technology would have on the supply chain.
Technology has fundamentally changed our consumer into someone with vast power and knowledge at their fingertips. It’s transformed logistics with tracking capabilities. It’s taken a hold of collaboration and shaken it down to its bare bones and made data powerful. It’s taken the practicalities and manual labour of warehouses and upended it. No element of the supply chain has escaped its reach.
However, as Bill Gates has famously stated: “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency. Supply chains can’t just throw technology at themselves and hope for the best. Instead they need to be savvy and implement technological changes carefully.
By implementing technological changes carefully, and not just doing something because someone else is, you can help to future-proof your supply chain. This particularly applies to the big technologies on the horizon: augmented reality and artificial intelligence.
We’re including robotics as a distinct category of change, in addition to technology. This is because robotics themselves are changing many stages of the supply chain. We’re used to welcoming robotics on to the production line, and whilst there are still steps to take in this development further, we can see where they are going, and what needs to happen. Where we’re not so used to seeing robotics is in our warehousing. Technology is responsible for managing inventory and the like, but robotics is changing warehousing away from a labour intensive and relatively non-skilled field. This is a change that is still underway and will radically affect the future of supply chains.
The People and the Talent
Old school supply chains very much could operate as silos, and this applied as much to the people as the processes. Supply chains now are so integrated across the different links, or should be, if they want to be successful, that the talent needed to manage and operate supply chains looks enormously different from the next generation.
Instead, talent in supply chains depends on more than working up through the ranks, it requires a business-led approach with multi-skills and leadership potential, as well as an ability to not just embrace technology, but allow it to flourish. Supply chain management involves a plethora of skills, from financial management to knowing how to foster collaboration. These are highly skilled roles with somewhat of a skills gap in the ranks. This is where utilising supply chain consultants can help.
It’s Not Just About Being Lean, But Being Agile
The modern world is capable of turning on a pin point, and supply chains need to be able to respond to that. Just a few years back you’d have back office designers who were responsible for setting, manipulating, and predicting the trends sometimes over 12 months in advance. That model simply doesn’t work in 2017 and for the future. Instead, it’s about responsiveness. Supply chains need to identify changes in demand as they happen, and be agile enough to respond. This means that every facet of the chain, from production to collaboration, needs to be able to flex, adapt, and thrive.
The Customer’s Role
Once upon a time the customer was almost entirely separate from the supply chain. There was an ‘us and them’ mentality with retailers being the negotiator in the middle. Now customers are an integral part of the supply chain, in many ways driving chains from the bottom up. Consumers have higher standards than ever before, higher levels of expectation, combined with a fickle nature that is conversely rooted in social responsibility and ethics.
Every stage of the supply chain needs to be accountable to the consumer. This means caring about your carbon footprint at every step, and caring about sourcing and ethics, human rights, and animal welfare. These standards are continually being uncovered and a supply chain that seeks to hide things from its consumers will soon find itself tripping up.
What is also important about understanding the consumer in the supply chain is the development of the Internet of Things. Supply chains are able to gain customer insights like never before. Knowing what your customer is going to be asking for, before they even ask for it, and having the insight in to the intricacy of their life, is the key to business growth and success. Being able to respond to the consumer, and answer their need before they know it exists, is critical.
The Future of Supply Chains
Given the enormous changes to supply chains over recent years, it would be foolish to think we’ve arrived at the final destination with an accurate blue print of what things will look like from here on in. We need to continue to embrace change and develop it within our own chains.
However, what is also important, with the seismic level of change in supply chains, is that we don’t also forget to focus on the fundamentals which have always been the mainstays of a successful supply chain in the past. Otherwise we run the risk of causing inefficiencies that will quickly become magnified under the modern light. This means strategy needs to remain a focus, and everything else builds on the strategic foundations.