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How Is Technology Disrupting Supply Chain?

Supply chains have long evolved alongside disruptive technologies. As methods of communication, transportation, and the development and integration of new systems have changed and improved over time, supply chains have changed with them. After all, companies depend on an efficient supply chain for success.

Changes coming in the near future, however, threaten to completely disrupt how supply chains work on an unprecedented scale. The dawn of automatic transportation, blockchain technologies and data-crunching analytics systems are already being implemented by some of the most innovative businesses looking to optimize their supply chain. Harvard Business Review contributors Allan Lyall, Pierre Mercier and Stefan Gstettner write, "Within 5-10 years, the supply chain function may be obsolete, replaced by a smoothly running, self-regulating utility that optimally manages end-to-end work flows and requires very little human intervention."

While it isn't possible to know exactly how far these new technologies will go to reshape modern supply chains, it is imperative that anybody looking to enter the field have an understanding of what is to come.

The Dawn of Blockchain

Blockchain is largely associated with bitcoin, an alternative currency that has become popular over the last few years. FreightWaves contributor Vishnu Rajamanickam defines blockchain as "an immutable ledger of publicly stored and distributed information." It is an optimal way to track data of any variety, and that includes shipping information. Naturally, this technology is attractive to businesses looking to streamline their supply chain.

The usefulness of blockchain is no longer theoretical. Manufacturing.net writer Megan Ray Nichols says, "IBM announced a new partnership with Maersk in January 2018, which will implement a blockchain-backed electronic shipping system on an international scale." Blockchain boasts an incontrovertible, time-stamped ledger of transactions between parties. This reduces the potential for mistakes in the supply chain.

IBM has also recently developed a new chip that has the potential to shape blockchain use on a worldwide scale. The chip is small enough to embed in virtually any product, and is designed to help monitor these products as they go through the supply chain. Rajamanickam writes, "This helps the key players to identify the authenticity of the product in question, flushing out the possibilities of counterfeit goods from entering the system."

Blockchain technology is already widespread, and its integration with other innovations will enshrine it as a staple in the supply chain industry.

Automation and AI

Self-driving vehicles have been a hot topic in the news recently, and car manufacturers are hard at work to get the first commercial self-driving vehicles on the road. This is merely one of the potential uses for artificial intelligence. Lyall, Mercier and Gstettner write, "Many @companies have used robotics or artificial intelligence to digitize and automate labor-intensive, repetitive tasks and processes." An example of this is Amazon's recent drone delivery initiative.

In manufacturing, improvements in robotics have streamlined production. Lyall, Mercier and Gstettner point out, "Sensor data on machine use and maintenance are helping some manufacturers to better estimate when machines will break down, so downtime is minimized." This not only allows companies to better recover from a malfunction in equipment, it also enables them to diagnose and forecast for breaks in the supply chain, helping to minimize risk.

Although self-driving vehicles are the focal point of the conversation on AI and transportation, there are other technological advances making an impact on the delivery side of supply chains. Nichols writes, "The city of Nanjing, China recently introduced a traffic flow management system that incorporates real-time data as well as predictive analytics ... to help travelers plan their routes." This, along with advances in safety technology for human drivers, decreases the risk of supply chain breaks for businesses.

Integrated Data Analytics

One of the most striking technological developments disrupting supply chains is the implementation of data analytics systems that allow supply chain managers to observe the totality of their supply chain at any given moment. Lyall, Mercier and Gstettner write, "A key concept that many of these companies are exploring is the 'digital control tower' -- a virtual decision center that provides real-time, end-to-end visibility into global supply chains."

These so-called towers are centers manned by data analysts keeping an eye on their supply chain around the clock, allowing companies to resolve breakdowns and issues as they arise. They combine the power of blockchain, tracking technologies and sensors into one integrated system, giving businesses the ability to forecast potential problems and move to resolve them before they otherwise would have.

While supply chains have experienced changes thanks to technology in the past, these current upsets are projected to completely revolutionize the way they operate from start to finish. Large teams of laborers are slated to be replaced with smaller, more focused teams of experts handling all aspects of their supply chain with greater accuracy than ever before. For supply chain managers, it is crucial to stay on top of this evolution to remain competitive.  

Learn more about the University of Wisconsin Parkside's online MBA program with a Concentration in Supply Chain Management


Sources:

Harvard Business Review: The Death of Supply Chain Management

FreightWaves: The Future Is Now: Technology Disruption in Supply Chains

Manufacturing.net: 5 Technologies Disrupting the Supply Chain

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