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 are the eight supply chain trends that you can't ignore when it comes to the S&OP process.
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
The Internet of Thing (IoT) shows increased potential even after a peak of inflated expectations. Already, there's a 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 wary of making substantial 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 contains semi-autonomous and fully autonomous solutions with the ability to operate without supervision for extended periods.
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 Business Intelligence 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].