Gartner recently identified the top eight disruptive technologies most likely to impact organizational supply chains in 2018. Keep in mind, these trending technologies are scattered throughout the various stages of the Gartner Hype Cycle, which charts the development of technologies from concept to maturity and adoption. Starting with those closest to commercial viability, here’s the eight supply chain trends you can't ignore.
1.
Immersive Technologies
After
years of hype, immersive technologies such as virtual reality (VR) and
augmented reality (AR) are reaching the point where practical supply chain
applications are emerging. While VR is totally immersive, AR augments users'
interactions with their environments. VR is two to five years from widespread
adoption, while AR is further behind.
Applications
include maintenance, where headsets provide diagnostic and repair information,
and in retail to enhance customer engagement. Gartner suggests identifying
potential applications where immersive technology creates an advantage and
running pilot projects to learn and understand the technology.
2.
Internet of Things
Coming
down from the peak of inflated expectations, the Internet of Things (IoT) is
showing increased potential. Already, there's widespread application in the
aviation industry, where thousands of sensors monitor performance and provide
notifications when maintenance is necessary.
The
IoT consists of embedding sensors in equipment to monitor and transmit data
continuously to IoT platforms. It's expected that 20 billion units will be
deployed by 2020.
Gartner's
recommendations include the identification of supply chain practices that could
be enhanced through feedback from IoT devices, paying particular attention to
security issues and the internal and external sharing of information derived
from IoT sensors.
3.
Advanced Analytics
Another
key supply chain technology finding increasing acceptance is advanced
analytics. Encompassing predictive analytics for modeling, simulation and
forecasting, and prescriptive analytics designed to identify the best way to
achieve a specific objective or set of objectives, advanced analytics help
organizations:
·
Reduce
costs
·
Improve
efficiencies
·
Make
better supply chain decisions
·
Prevent
supply chain interruptions
·
Grow
market share
·
Shift
focus to profit
External
partnerships can be used to implement pilot schemes, for those who are
weary of making heavy investments. For those looking to understand where
and how to get started with prescriptive analytics, you can reference this
book developed specifically for a business audience. Now more than ever,
business leaders need to educate themselves on the various forms of business
analytics and understand where they should be applied in order to have the
greatest business impact.
4.
Intelligent Things
Differing
from the IoT, intelligent things include autonomous machines, vehicles and
drones that adjust their behavior through interaction with the environment
using artificial intelligence in place of rigid programmed responses. This
technology includes semi-autonomous and fully autonomous solutions with the
ability to operate without supervision for extended periods of time.
This
capability offers tremendous opportunities for supply chain organizations
wishing to improve efficiencies and reduce costs. Gartner recommends
considering autonomous machines and vehicles to complement and in some
instances replace human labor. Provided the right technology is in place, pilot
schemes can be used to assess benefits.
5.
Robotic Process Automation
Robotic
process automation (RPA) tools automate clerical tasks. They can automatically
populate fields, execute calculations, perform actions and initiate ensuing
instructions. In supply chain management, they are used to automate data
conversion and entry when automated process integration is impracticable
between two systems. RPA has been applied in customer management for rule-based
business processing. Potential applications include credit checks, subscription
management, warranties and marketing.
Gartner
suggests identifying manual clerical processes such as entering and
transferring repetitive data to assess the potential benefits of RPA over
alternative automation solutions. Often, RPA solutions can be implemented
faster and at a lower cost than alternatives.
6.
Conversational Systems
Conversational
systems interact with users verbally and through text. Contemporary examples
include Google Assistant, Amazon Alexa and Siri. Removal of limitations, such
as the need for structured language along with artificial intelligence, is
expected to open the door for complex interaction and the ability to pose
unstructured questions.
Conversational
systems could be used for sourcing, procurement and to handle commercial
transactions. Gartner's view is that organizations should explore existing
conversational systems and identify how they could be used inside and outside
their organizations. Conversational ability should be a key criterion when
evaluating new enterprise software.
7.
Blockchain Technology
While
the distributed ledger aspect of blockchain technology provides a complete and
indisputable record of transactions, progress towards commercialization has
been slow. However, there are strong indicators that blockchain technology
could change how business transactions take place. Pilot projects are
evaluating blockchain technology for tracking diamonds, fruit shipments and
commercial shipping.
Gartner
believes that 90 percent of pilot projects will fail and recommends a cautious
approach when evaluating the practicality of blockchain technology and
selecting vendors. Nevertheless, it is recommended that you monitor this
technology to identify use cases.
8.
Artificial Intelligence
Gartner
defines artificial intelligence (AI) as systems that change their behavior
based on observation without explicit programming. Building blocks include
machine learning, expert systems, computer vision and natural language
processing. AI is a crucial component of many disruptive technologies. Current
AI supply chain applications find patterns and predict scenarios, but have
limited decision-making abilities.
Businesses
should identify how AI can create business value and evaluate its use in
low-level processes, assess successes reported in the press and liaise with AI
vendors to better understand possibilities. Those intent on developing AI
capability should source scarce AI skills.
Importance
of Validation Before Adoption
While
the potential of these trending technologies is exciting, be wary of launching
applications without appropriate validation. When assessing the practicality of
these trends, Gartner recommends the following:
·
Determine
if implementation will result in better business outcomes.
·
Assess
the extent disruptive technology will force changes to your business model and
impact your organization.
·
Consider
the potential of combining trends for more substantial organizational benefits.
[Gartner, “The 2018 Top
8 Supply Chain Technology Trends You Can't Ignore,” Christian Titze et al, 9
January 2018].
Contributed by: Rod Stout, Business Modelling
Associates (BMA). BMA is the official distributor for River Logic’s Enterprise
Optimizer® platform across Africa.
