The supply chain crisis of 2021 is demonstrating that professionals cannot take logistics for granted. With so many moving pieces in a globalized supply chain, it is critical that we explore new ways to build in more agility, flexibility and risk mitigation capabilities. Fortunately, experts have access to a number of tools used to innovate, collect more data, drive automation, deliver insights, reduce costs and accelerate turnaround.
An advanced business degree in supply chain management can position professionals to utilize these innovation and data methods with efficiency. The following tools are leading technologies poised to give organizations in the global supply chain a competitive advantage:
Blockchain is a centralized distributed ledger technology that creates a transparent record of transactions to bring accountability to all parties in the supply chain. Its security and incorruptibility makes it such a ground-breaking technology. These primary aspects have led to the development of cryptocurrencies, which are also poised to revolutionize the payment systems used in the global supply chain. Because the blockchain is immutable, no information can ever be lost or altered. This enables parties that may otherwise have competing interests to trust one another as supply chain partners.
Blockchain automates the audit trail, eliminating costly data entry and manual processes that slow down shipping and receiving processes. Its efficiency can bring enormous cost savings, totaling an estimated $31 billion for the food and beverage industry alone by 2024.
This term refers to code that exists on the blockchain which automatically executes when certain conditions arise. Smart contracts effectively create operational agreements to supplement standard contracts and enable greater speed and flexibility. A smart contract may trigger the generation of an invoice when a shipment reaches its destination or an escrow payment to a manufacturer when goods arrive at a warehouse.
The benefits of having smart contracts on the centralized, distributed blockchain ledger include ease of agreement between organizations, virtualizing the paper trail, accelerating sign-off processes, reducing fraud with a complete blockchain audit and accessibility to all involved parties.
Internet of Things
The internet of things (IoT) describes internet-connected devices that automatically capture and communicate data about the status and movement of goods throughout the supply chain from their original sources to their ultimate destinations. IoT sensors, such as grocery store scanners, are also used at the point of sale (in retail locations) to capture real-time demand data, which allows manufacturers to align supply with demand and assist in more accurate geographic disbursement.
GPS sensors in truck fleets help managers locate trucks and keep a tight watch on the timeliness of deliveries. Sensors in warehouse and retail store shelves keep inventory counts, and devices on manufacturing equipment warn when machines will require maintenance.
Increasingly smaller and more affordable devices continue to drive new potential IoT applications. For example, small, flexible sensors tag, track and monitor COVID-19 vaccine shipments, assuring that temperature and light levels stay consistent throughout the product journey and that the product is effective for each end consumer.
Artificial Intelligence and Machine Learning
Human beings can step back from their work to introspect, identify patterns, learn from their inefficiencies and make improvements to their work. With machine learning (ML) — a branch of artificial intelligence that mimics human capabilities — machines can do the same through data analysis and pattern recognition. The result is more efficient, reliable, predictable and repeatable processes.
Machine learning works through artificial intelligence (AI) algorithms that apply complex mathematical calculations to big data again and again with increasing speed. Applying ML to operational processes in the supply chain saves time, reduces the need for expensive human personnel and eliminates the possibility of human error. Some examples of ML in use today include online recommendation offers from Amazon, social media monitoring software that relies on linguistic rule creation and fraud detection software.
These transformative technologies continue to evolve and bring new efficiencies to the supply chain. If you are interested in the potential of becoming a supply chain leader and applying these technologies in your career, an online MBA with a Concentration in Supply Chain Management can be beneficial for your career trajectory.
Have a question or concern about this article? Please contact us.