Industry trends and the future of supply chain management - Institute of Supply Chain Management
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Industry trends and the future of supply chain management

  • General News
  • 25th October 2019

If your business is your body, then the supply chain is the bloodstream. Supply chain management is a catch-all term that covers making sure your business has the tools and supplies it needs to function, your customers get the products and services they want, and that your infrastructure is smooth-running and in operation. In the 21st century, supply chains are more than just trucks, trains, and planes taking stuff places. Drones, robotic warehouse automation, and autonomous vehicles all play a huge part in asset tracking, inventory management, and everything that goes into supply chain management.

Artificial Intelligence

AI will be at the core of automation. One of the first examples of things to come occurred in 2016 when a Budweiser beer truck completed a 132-mile delivery completely without human interaction. The truck drove itself. Yes, there was someone in the truck, but that person never took the wheel and only observed. In the future, that person won’t need to be there even to observe.

Tracking will be the next hurdle over which AI will jump. It’s fairly easy for one person to monitor the activities of a few delivery drivers. A particularly motivated individual with world-class skills might also be able to monitor and administer payroll, manage inventory of one or two warehouses, and track vacation time in addition to keeping track of those few drivers. What happens when there are 200 drivers, 10 warehouses, and 1,000 other employees? No one could handle that workload. That’s where AI is going to make a gigantic difference. Computers would do all the so-called “heavy lifting” while a few highly skilled operators keep track of the computers.

Internet of things

Imagine being able to know the whereabouts of a single package without barcodes, scanners, and human interaction. Supply chain logistics will be much easier if an operator can look at a screen and see where the package is without needing someone else to help. With radio-frequency identification and its accompanying sensors, packages and other items essentially track themselves and relay that information where it needs to go.

Additionally, logistics planners in your company can see all the packages in transit to their destination and will, therefore, be able to make projections on future needs. They’ll be able to determine trends in consumer habits, item popularity, and scheduled vehicle maintenance, which will enable them to forecast properly regarding inventory. This applies equally to both customer deliveries and to shipping and logistics, along with warehouse management, within your company.

Robotic Process Automation

Companies are moving away from hiring general laborers. They’re replacing them with robots and are instead hiring skilled professionals to monitor and maintain the robots. They’re hiring similar workers to brainstorm “better mousetraps,” too, and these contributions will hasten in a new age where work gets done substantially faster than it did with human power.

Employee creativity has also led to applications of this robotic technology to repetitive office tasks as well as warehouse tasks. Billing and collections, now powered by AI-fueled computers and phone robots, now operate efficiently. Great strides have also been made in the field of intelligent bots, such as those used in chat interfaces on company websites, and these can handle nearly all simple interactions. That leaves human employees free to do real problem solving for complex cases rather than spending time on mundane things.


Supply chains have dozens of tendrils and thousands, if not millions, of links extending out through the business world. Sometimes, managing supply chains is a heartburn-inducing, never-ending job that just gets more complex than ever over time. Blockchain, however, is the key to keeping things straight.

A blockchain is a digital ledger that keeps track of not only every current transaction between a company, a vendor, a customer, and you, but also every previous transaction between that set of entities. As an example, let’s say you have a bakery business and begin by ordering 1,000 bags of flour. Your vendor takes the order and contacts the farm from which they get the wheat to grind. The farm bills the vendor for not only the wheat but also the transportation. Your flour vendor grinds the wheat, packages it, loads it onto pallets, loads it into a truck, and sends it off to you.

A blockchain would keep track of all payments, invoices, transportation costs, overtime pay, and everything else involved in this lengthy transaction. Each party would sign the digital ledger to indicate agreement with the full transaction. All parties involved must agree that everything’s done before the transaction can be considered completed.

Autonomous things

That Budweiser beer truck isn’t the only autonomous entity in supply distribution, although autonomous vehicles are making great strides around the world. In Asia, highways are being built that will recharge autonomous electric vehicles as they drive over the tarmac. In Europe, platooning is the latest trend. It’s where trucks drive in a group where they’re nearly touching each other. Their braking and acceleration are linked.

By driving in such a group, and by following programming that gets them to switch positions occasionally, fuel consumption is drastically reduced. Fully electric, autonomous trucks will be the wave of the future too. In Germany, for example, the Federal Council passed a resolution to make the internal combustion engine itself illegal within 11 years.

In the warehouses of the 21st century, automated drones perform many tasks that human beings once did. In the very near future, drone-based delivery systems will cut down time and fuel cost by delivering items to your home. Green automation is the future.

The future of the supply chain

All of these new trends are changing the way businesses operate. Companies may want to implement all of these at once, but that will prove difficult. There are capacity questions to answer, new delivery fleets to create, and new technologies to conquer. The biggest change will be the incredible uptick in competition. As delivering items and asset tracking becomes easier and easier, there will be more and more companies competing for a fairly static marketplace.

Companies are going to have to devise other differentiators to set themselves apart. They might find a new process that saves time over the competition. They might just do everything faster. In any event, the future seems exciting in the world of supply chain management.

In Conclusion

Chetu, which was formed in 2000, is a leading developer of supply chain software. We help you make sense of your supply chains and keep track of everything in a world that is becoming more complicated every day. Contact us to see what we can do for you.

Author: Dave Wood

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