Future of Logistics and Supply Chain

Digital business is the new reality. New business models blurring the lines between digital and physical world by connecting people, other business entities and things to drive the revenue as well as efficiency. In the new era – every “thing” with any value, will have sensors embedding intelligence. It will continue to transmit the information which can be used to track, monitor, analyze and decide respond on every aspect of the Supply Chain, including an end customer’s daily use of a product.

Per research firm Gartner – 20% of organizations now describe themselves as digital businesses. The top priorities for business is being shifted from ERP implementations and master data management to Supply Chain design and Supply Chain analytics. This is changing the role of Supply Chain being a support function to the major growth driver for the business.

Major trends that will affect the Supply Chain and logistics industry in coming years –

Block Chain – from Supply Chain visibility to transparency

– Over the years, and perhaps even now, several organizations have struggled with visibility of their Supply Chains. Block Chain brings in an opportunity to not only establish this visibility but to make it completely transparent to all players in the chain, including the consumer. We will see block chains emerge as a key technology not only for financial transactions but also for the Supply Chain. Block chain will provide the much-needed ability to centrally and publicly track what goes into a product that reaches the consumer, right from the origin, to the movement, to the time, to the distance. This will establish trust between businesses and also curb fraud and provide a choice to consumers.

The blockchain implication is expected to have a wider impact on the end to end Supply Chain compared to any other disruption. It is expected to track details right from order initiation at the customer level to shipment information at a detailed level, resulting in creating more visibility within a Supply Chain not seen before and further allowing all stakeholders in the process to access accurate real-time information anywhere, anytime. This will make the entire Supply Chain more responsible and accountable, compliant due to transparency.

Machine Learning – the (artificial) intelligent value chain – Analytics has been on a high evolution curve especially over the last two years and we’d expect the same to continue momentum, especially how it could be leveraged towards an intelligent supply network. Machine Learning will be seen touching most Supply Chain processes starting right with Demand Sensing and Forecasting to Inventory Management, Manufacturing, Warehouse Management and Transportation. In the process, we will see a significant improvement in the accuracy of forecasts and efficiencies of these processes. What, today, takes months for Demand Planners to achieve in terms of forecast accuracies will be the starting point for the machine learning algorithms which will learn and self-correct rules based on market conditions.

Internet of Everything (IoE) – a ‘smart’ Supply Chain – From machines to things to everything, this is one technology that has come out of the hype curve and into mainstream the fastest. Expect it to only grow in coming years– in terms of adoption, in terms of evolution and in terms of value. We will see the extended Supply Chain uses cases of IoE come into the prime, right from planning (think smart shelves) to BLE (Bluetooth low energy) based proximity marketing leading to a ‘smart’ Supply Chain. We will also see other technologies like unmanned aerial vehicles (UAV, aka drones) joining hands with IoE to create power packed use cases of remote tracking, monitoring or maintenance.

As an example – Disney is experimenting with wearable IoT in its parks to enhance their customers MyMagic experience using the MagicBand. The MagicBand provides convenience by replacing the need for credit cards, room keys or tickets, and allows Disney characters to recognize park attendess by name. The MagicBand also allows Disney to optimize the park’s traffic and flow of goods and services by analyzing data based upon the movement of park attendees. This is in essence a Supply Chain scenario that will scale to much larger Supply Chains later.

Conversational User Interfaces – your ‘personal’ Supply Chain ‘assistant’ – Customer Experience has been the focus for a few years now, extend this to the users of the Supply Chain. We will see a whole new way in which business users interact with systems and their Supply Chains. While robotic process automation has largely been a back-end process or chat bots have been finding feet more on the customer service side, we will see emergence of digital personal assistants for the business users. Imagine talking to your mobile to pull out exactly the stock report that you need, or better still your mobile talking to you about a stock-out problem that may arise and recommending you a few options that will take care of this.

Expect enterprise applications to become more conversational and user driven in coming years. The millennial workforce will be changing the way we interact with our systems.

Uberization of logistics – Just like a technology company Uber augmenting available passenger capacities world over to provide benefits to the end consumer without owning a single car itself, the rise of the new breed of logistics providers that own no fleets or warehouse, but can provide logistics services by aggregating information owning assets through leveraging data. In India, Mahindra announced “Smart Shift” – first-of-its-kind load exchange platform for Small Commercial Vehicles. On SmartShift, they enable businessmen who wish to transport cargo & transporters to find each other. The platform enables contact, negotiation & sealing the deal between the two parties at just the click of a button.

Predictive Analytics – Data as a new Oil –  There are concentrated and intelligent exploration efforts in the discovery of data just like oil. These efforts are directed at refining it into various grades of focused products based on market and individual business needs. For value-chain related information. As data streams are refined into insightful information to power the various forms of advanced analytics needs – it provides high end predictive capabilities. Advanced analytics are forming the brain of the enterprise, creating a new digitally conscious organization that’s committed to making sense of big data.