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IDC: Launch of Watson Supply Chain Looks to Address Gaps in Data Analytics and Resources

This week, at World of Watson in Las Vegas, IBM announced the launch of Watson Supply Chain, leveraging their Watson cognitive/artificial intelligence (AI) technology to change the paradigm of how manufacturing supply chains are operated and optimized. As IBM notes on their Watson Supply Chain website, “By establishing greater visibility into supply chain data and processes and leveraging cognitive technologies, supply chain organizations can both predict and mitigate disruptions and risks and deliver more value to the business.” As supply chains experience growing complexity, higher expectations for speed and transparency, and the ability to directly engage with consumers, the “old way” of doing things will not be enough. Indeed, IDC has predicted that by 2018, one-third of all industry leaders will be disrupted by digitally enabled competitors. The bottom line is that today’s supply chain performance will not suffice for tomorrow’s business requirements.

At IDC, we have noted that cognitive/AI advances – combined with robotics, IoT, augmented reality/virtual reality (AR/VR), and modern analytics (on massive data sets) – increase the ability of systems to mimic and enhance human intelligence in real time. The inherent complexity, and “length,” of global supply chains, along with the dramatically increased volume and variety of data exchanged between suppliers, manufacturers, and customers make it almost impossible for manufacturers to extract all of the necessary insights, and make fully informed business decisions. Most companies simply do not understand the full depth and breadth of their supply chain risks and are therefore not prepared to respond efficiently or effectively to the many potential disruptions. Visibility, both upstream and downstream, is critical to understand risk and to enable resiliency; you cannot respond to what you don’t see. This implies that systems and capabilities must be available to provide visibility, but also that the underlying data is of acceptable quality to prevent “garbage in, garbage out” syndrome. If we think about the collection of data via systems and sensors, the analysis of data through advanced analytics, and then the approach to actions via machine learning techniques, we start to envision a very different way of both identifying risks and enabling resiliency; and potentially a way to transform the way that manufacturing supply chains manage and respond to risks.

IBM’s Watson Supply Chain proposes to enable a “modern supply chain that is transparent, intelligent and predictive” through greater transparency and visibility by establishing a single, shared view of supply chain data and intelligence across an ecosystem of suppliers, partners, systems, and processes; and leverage the latest cognitive technologies to create greater transparency and comprehensive visibility into supply chain processes – and potential disruptions and risks – so that organizations can quickly and proactively mitigate those events. At IDC, we have talked about manufacturing companies having an “analytics gap” wherein analytics capabilities fall behind the explosive growth rate of available data; but there is also an “eyeballs gap” with global supply chains simply not having adequate personnel to provide next best action to potential risks and disruptions.

IBM’s Watson Supply Chain is the first comprehensive offering that we have seen that proposes to address both of these gaps. As IBM’s CEO Ginni Rometty noted in her World of Watson keynote, “Watson will be an ecosystem with the power to change the world.”

Visit the Watson Supply Chain microsite to learn more.

Program Vice President, Supply Chain Strategies, IDC Manufacturing Insights

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