10 GAME CHANGERS for the Next Decade for Supply Chains
Significant changes with technologies and trends will transform the supply chain as we know it.
The events of the past several months have made it very clear how difficult it can be to predict what sup-ply chains will look like in one year, let alone 10 years from now. Despite the unknowns, however, there are some technologies and trends that will be shaping the sup-ply chain as we move through the next decade. Here are 10 examples.
1. A diverse, differently-skilled workforce
“If you look at the workforce now compared to what it was 10 years ago, there’s been a significant change. What’s hard for people to understand is what the new jobs are going to be 10 years from now,” said George Prest, CEO of MHI. “But I do know the skill sets that are going to be needed. Critical thinking will be a strong point, and people are going to have to be more adaptable and intellectually curious, because jobs are going to change at a much faster pace.”
The education system will have to change to provide the type of workers that supply chain companies need, he said. “But it will also be incumbent upon the corporate world to be nimble. If you want to retain people, it’s going to be necessary to continually provide them with opportunities to grow.”
The workplace of 2030 will be more digital and innovative to ensure that a five-generation workforce will be able to work together effectively, said Thomas Boykin, supply chain and network operations, Deloitte Consulting. Younger generations expect technology and innovation to be as advanced in their workplace as it is in their homes. Older workers may require technology with intuitive inter-faces so they can be productive and effective. Robotics will work side-by-side with these workers to help them do more significant work by eliminating repetitive and physically challenging tasks.
2. Increased use of VR
Companies will employ virtual reality (VR) to train this multi-generational workforce.
“There’s a difference in the way that the younger generations learn versus the way that people learned 40 or 50 years ago. Training methods will have to be more flexible and they will also have to involve more technology to make them more effective,” said Boykin.
Using VR to train forklift operators, for example, will reduce risk of injury to people and damage to goods. Trainees today are handed a set of keys after a few hours of classroom instruction. “They drive around a nd bump into things, and eventually become better. But while they’re learn-ing they are creating havoc,” Boykin said. “In the future, all of this training will be done through VR. It will be real enough for people to actually practice without physically damaging things. It will also help them gain confidence.”
3. Harnessing brainpower
People who are stressed or overtired can’t focus on their work, so they don’t perform effectively and may even risk injury to themselves or others. Over the next 10 years, advances in neurotechnology may enable workers to track their cognitive performance and monitor their emotions to determine, scientifically, when they’re not at their best and may need a break.
Neurotechnology is based on the science of neurology, which focuses on the nervous system and how it affects behavior. This cutting-edge tech is already being introduced into the workplace. One neurotech company, Emotiv, has developed brain-computer interfaces that allow real-time monitoring of workers’ attention and stress levels. Employers can use this information to develop solutions that will improve employees’ safety and wellness when they’re not giving their full attention to their jobs.
“Many accidents occur because people are distracted and stressed,” said Olivier Oullier, president of Emotiv. Imagine, for example, a fatigued forklift driver who is moving containers of dangerous biochemical products around a facility. A moment of inattention or distraction can cause the drive to make an error that costs lives. Such tragedies may be prevented if the employee has access to brain monitoring technology.
Office workers who monitor their stress and attention levels may realize when it’s time to take a break because they are no longer focused. “This will improve not only the employees’ wellness but also their productivity by allowing them to ‘recharge,’” Oullier said.
Neurotology can also provide new ways for humans to interface with machines. Emotiv’s devices and machine-learning algorithms con-vert waves into digital signals that can control virtual and real objects such as computer keyboards. This could create more opportunities for the disabled to work at jobs within the supply chain.
4. Gaining insights through converging technologies
Over the next decade, businesses will become more adept at collecting data and using it to make decisions.
“Sensors and the IoT are the backbone of all this, and in 10 years, and probably even sooner than that, it will be taken for granted, just like electricity is today,” said Prest.
To take full advantage of this data, companies will also have to adopt other technologies like cloud computing, cloud storage, data analytics, machine learning and artificial intelligence (AI).
“No one technology can be viewed as an island in and of itself,” said Boykin. “AI, which is gaining more and more use and adoption, will be a critical part of the changes over the next 10 years, but it’s also dependent on these other technologies.” AI, predictive analytics and prescriptive analytics are at the top of this hierarchy, enabled by data collection, transmission, sharing and analysis.
Ten years from now the cost of AI and related technologies will have decreased, enabling companies of every size to employ it, Boykin said. They will be using predictive analytics to look forward and give direction about what is going to happen and prescriptive analytics to provide direction about what they should be doing about what’s happening.
“The AI component comes in because sometimes what should happen may not need to be executed by a worker,” Boykin added. Some decisions will be made by AI, which will be entrusted to accomplish those tasks through machines and computers, without depending on a human to interpret them.
5. Unichannel adoption
Retailers that want to remain competitive in the next decade will have to move their operations beyond omnichannel to unichannel, according to Jim Tompkins, chairman and CEO of MHI member Tompkins International.
Many companies today have different inventory and management systems for in-store versus online customers or for their distribution centers, fulfilment centers, return centers and liquidation centers. Unichannel—short for unified channels—brings all of the information about a retailers’ inventory and about interactions with e-customers and in-store customers, from browsing and buying to purchasing and returns, into a single management system. It enables retailers to provide all customers with a smooth and seamless experience, whether they purchase and return items online, in-store or through some combination of both.
Through unichannel, retailers will be able to share information about all of their inventory across their different brands, using that information to fulfill orders from websites targeted to specific customer groups.
Unichannel will also provide retailers with valuable data about how customers are purchasing goods. For example, a retail store may sell a four-pack of action figures while its online store and liquidation centers offer the same characters for individual purchases. With the ability to access data from all three sources, a retailer could determine which character(s) are the most popular and adjust their orders accordingly.
6. End-to-end visibility
Visibility into supply chains has become increasingly important as firms struggle to build data sharing and true collaboration with their suppliers and partners. At the same time, consumers are demanding transparency not only into their orders, but also into the origins of the products they purchase and consume. For these reasons, in the near future, end-to-end visibility will be table stakes and a significant way that brands differentiate themselves from the competition.
“Blockchain will be a key component of this,” said Prest. “Three or four years ago, when there was a problem with E. coli in lettuce, it took Walmart 10 days to track back to where the lettuce came from. In the meantime, they had to shut everything down.
“They had a similar incident last fall, and they were able to trace that in two seconds because they used blockchain. The economic impact of that was huge,” he said.
Companies will need to move away from closely guarding all their information and become more transparent and collaborative in their operations. “My experience has been that the more collaborative you are, the more successful everybody is,” Prest said.
7. Smart distribution facilities
When operating costs were a higher percentage of total logistics costs, companies focused on larger, more automated warehouse facilities where they could bring orders together. Then there was a move to regional facilities in order to get closer to where customers are located.
Today, customers are buying more through e-commerce and expecting faster delivery of their purchases. That’s a trend not likely to change after the enforced COVID-19 quarantines.
As a result, companies today are focusing on what Deloitte Consulting calls smart city distribution facilities. Located within a city or close to it, these DCs will be smaller and multi-story, because space is expensive, according to Boykin. The restocking of these facilities may occur at off hours, when traffic volumes are lower, and some deliveries may arrive on trailers being driven by autonomous tractors.
The impact of COVID-19 also comes into play here. If work from home that began with COVID-19 becomes a long-term trend, space once occupied by office workers could be re-purposed into smart city distribution operations to accommodate e-commerce deliveries into these critical areas.
8. Robotics for customization
“One of the challenges that we see over the next couple of decades of supply chain is the enhanced focus on customization,” said Melonee Wise, CEO of MHI member Fetch Robotics. “People want more low-volume, personalized goods, and having different robotic technology really enables that flexibility for customization.”
Since customers want faster delivery of their products, this type of customization may be done at a local level, inside smaller distribution centers, rather than at large manufacturing facilities. These smaller automated systems will be used to customize or personalize everything from pillows and sweatshirts to coffee mugs and desk accessories.
3D printers may be part of this automation in local DCs, ready to print less-requested parts for appliances or customized, one-of-a-kind medical appliances or devices.
9. The pandemic effect
No matter how long it takes to get COVID-19 under control, the after-effects of the virus will reverberate throughout supply chains for the coming decade.
Prest believes that companies that relied too heavily on a single supply chain based in a single country (i.e. China) will become much more nimble, building in redundancy with more near-shore operations.
The pandemic will speed the adoption of automation and robotic systems as well. In the weeks after the coronavirus hit the U.S., when distribution centers struggled to limit the spread of the disease, automated systems provided a solution.
“We’ve had a lot of customers use robots to create distance between peo-ple and still provide the same through-put,” said Wise. “I think the biggest challenge is going to be how long it will take for people to implement the technology and to cope with some of the large changes that COVID is going to cause long term. In fast movers, you will probably see the transition in the next two to three years; in the slow movers, it might take five to 10.”
10. The next normal
People are talking about “the new normal” after the pandemic when they should be preparing for “the next normal” instead, said Tompkins. More than ever before, VUCA— volatility, uncertainty, complexity and ambiguity—will be impacting the supply chain and the world in general. Constant change will be the norm.
VUCA originally was used to describe the rapid rate of innovation due to digital technologies. “We now know there are two types of disruptions; there are innovative disruptions, and there are crisis disruptions,” said Tompkins.
The rate of ecommerce was already growing at an unprecedented rate before the pandemic hit. “Now online food purchasing has gone from 2% to 20% in a month, and people have found that they like it. So you have both e-commerce and the pandemic coming together,” he added.
“What we’re going to see is VUCA on steroids,” Tompkins said. “VUCA will reign.”
Although the supply chains of 2030 will contain some of the elements that they have today, there will be many differences. “They will be more advanced, spaces will be smaller, technology will be more integrated and seamless, and workers will be more connected,” said Boykin. “It will all be more synchronized, one link of the chain to another, all connected to digital information. Companies will be competing on different levels than they are now.”
Source: www.mhisolutions-digital.com by MARY LOU JAY
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