Supply chains are changing. Here are 5 things we know now.

Supply chains are changing. Here are 5 things we know now.

Supply chains are changing. Here are 5 things we know now.

Supply chains are changing. Here are 5 things we know now.

Uncertainty is certain

Uncertainty is certain

Uncertainty is certain

Uncertainty is certain

Delivering better business outcomes, even in times of change.

Delivering better business outcomes, even in times of change.

2 min read
Intro

Intelligent workflows

Intelligent workflows

Intelligent workflows

Intelligent workflows

Supply chain leaders are reinventing processes to be dynamic, responsive and interconnected.

Supply chain leaders are reinventing processes to be dynamic, responsive and interconnected.

4 min read
01

Artificial Intelligence

Artificial Intelligence

Artificial Intelligence

Artificial Intelligence

Supply chain leaders are using AI to make smarter decisions faster.

Supply chain leaders are using AI to make smarter decisions faster.

3 min read
02

Internet
of Things

Internet
of Things

Internet
of Things

Internet
of Things

IoT is helping supply chain leaders better understand the state of things and take action.

IoT is helping supply chain leaders better understand the state of things and take action.

3 min read
03

Blockchain

Blockchain

Blockchain

Blockchain

Multi-enterprise networks with blockchain are creating trust and transparency across the supply chain.

Multi-enterprise networks with blockchain are creating trust and transparency across the supply chain.

4 min read
04

Intelligent order management

Intelligent order management

Intelligent order management

Intelligent order management

Supply chain leaders are capitalizing on intelligent order management to deliver on more customer promises.

Supply chain leaders are capitalizing on intelligent order management to deliver on more customer promises.

3 min read
05

Supply chains are changing. Here are 5 things we know now.

Introduction

2 min read

Delivering better business outcomes, even in times of change.

For today’s global supply chains, disruption is inevitable. From tariffs and trade wars to a nearly unpredictable pandemic, the only thing most companies know for certain is that the future is uncertain.

Getting customers what they need – when and where they need it – has never been more challenging. But it is possible to manage through complexity and preserve business continuity, while leaning in to cost optimization.

The biggest challenges our customers face in a supply chain is efficiency and disruption. And, improving either one is all about gaining insights.

— Marshall Lamb, CTO, IBM Sterling

The biggest challenges our customers face in a supply chain is efficiency and disruption. And, improving either one is all about gaining insights.

— Marshall Lamb, CTO, IBM Sterling

You can uncover opportunities for efficiencies and drive necessary innovation to more effectively manage disruption and deliver better business outcomes, even in times of change.

What does this look like, and where are IT and supply chain leaders placing their bets? How can improved processes and emerging technologies complement traditional EDI to enable B2B operational excellence in good times, and resiliency in challenging times?

To help you answer these questions, we have identified five innovations that leading organizations are integrating to change how their supply chains work: Intelligent workflows, AI, IoT, blockchain and intelligent order management.

Let’s explore how these innovations can help you optimize supply chain operations today and be better prepared for tomorrow.

01

4 min read

Supply chain leaders are reinventing processes to be dynamic, responsive and interconnected.

Supply chains form the backbone of enterprises, local communities and the global economy. A best-in-class supply chain ensures that consumers receive the right product at the right time, provides new opportunities for sustainability, and enables provenance and tracking for critical supplies.

As organizations work towards more agile and efficient supply chains, they are contending with another new reality: changing consumer expectations. Today’s supply chains are no longer invisible to the end user. More knowledgeable and socially-conscious customers and employees are demanding transparency and visibility into the products and services they buy or support.

Customer demands driving supply chain change:1

  • 71% of consumers who say traceability is important, will pay up to a 35% premium to have it.
  • 60% of consumers are willing to change their shopping habits to reduce environmental impact.
  • 57% of consumers are willing to change purchasing habits to reduce environmental impact.

Employees are also affecting change:2

  • More than 70% of workers would choose to work at a company with a strong environmental agenda.
  • 40% of Millennials said they have chosen a job due to a company’s sustainability practices.
  • More than 60% of workers said a strong sustainability plan would affect their decision to stay at a company.

To address consumer expectations while continuing to drive efficiencies and build resilience, businesses are integrating intelligent workflows into their supply chains. Intelligent workflows drive a unified digital solution by strategically applying emerging technologies to supply chain processes. Every step of the value chain becomes an opportunity for transformation – from demand planning to manufacturing execution to order orchestration and fulfillment.

Enable new levels of responsiveness and transparency
Intelligent workflows break down traditional silos between the back, middle and front offices to help supply chains deliver better business outcomes at scale. Uncovering efficiencies across a network of processes and partners and using learnings from vital data in- and outside the supply chain, intelligent workflows can predict future patterns to turn the unanticipated into the anticipated. The result? An agile supply chain that can more proactively respond to disruptions.

Empower your supply chain professionals
Reinventing supply chain processes also means transforming the way your organization is designed and teams are aligned. When manual processes are digitized and low-level administrative tasks are automated, supply chain professionals are recruited, retained and primed to focus on higher-value-add tasks. And, when technologies like AI and blockchain are providing trusted, real-time insights, your teams are able to make better-informed decisions and deliver more effectively and efficiently against strategies and environments that continually change.

The Replenishment Advisor PoC [proof-of-concept] demonstrated how IBM Watson, AI and machine learning can help to deliver greater visibility across a global supply chain. Equally important, it showed the willingness of our teams to engage with digital technologies…With help from IBM, we have made a big step toward understanding the high potential – beyond replenishment planning – in digitizing and innovating our supply chain processes.

— Dr. Bernd Lohe, Director Supply Chain Operational Excellence & Digitization, BASF Nutrition & Health

The Replenishment Advisor PoC [proof-of-concept] demonstrated how IBM Watson, AI and machine learning can help to deliver greater visibility across a global supply chain. Equally important, it showed the willingness of our teams to engage with digital technologies…With help from IBM, we have made a big step toward understanding the high potential – beyond replenishment planning – in digitizing and innovating our supply chain processes.

— Dr. Bernd Lohe, Director Supply Chain Operational Excellence & Digitization, BASF Nutrition & Health

02

3 min read

Supply chain leaders are using AI to make smarter decisions faster.

Artificial Intelligence (AI) is enabling companies to do more with data, make better real-time decisions, and take more-informed actions faster.

More than ever, companies are turning to AI-powered analytics to understand patterns of demand for products and services across geographic and socioeconomic segments.

AI business value will increase 2.5x to
USD 5 trillion
by 2025
— Gartner3

Supply chains include multiple parties – all trying to orchestrate the exchange of goods and services through purchase orders, invoices, shipping notices and credit and debit notes. To do this, they rely on a tremendous amount of analog data and point-to-point technologies grounded in traditional EDI. The goal for the future supply chain is to digitally connect all these elements using networks that are demand sensing and offer transparency and visibility from sourcing through fulfillment. That’s a lofty goal, but achievable for supply chains that use AI-enabled solutions to automate end-to-end processes and find the “signal in the noise.”

These innovations give you the power to:

  • Identify, assess and address potential disruptions before they occur.
  • Mitigate the impact of unpreventable disruption.
  • Seize upside demand opportunity before your competitors.
  • Simulate process-optimization scenarios for better business and customer outcomes.
  • Track inventory for instant visibility into the progress of goods at any point.
  • Provide instant shipment quoting capabilities that reflect actual market rates.
  • Determine shipment damage and when it occurred to recommend the best corrective action.

IBM embeds AI into many of its supply chain solutions, making it easy for clients to drive innovation while proving out the value of the technology. Hear from Mylene Ortiz at Petco about how the AI in IBM Sterling Business Transaction Intelligence gives her team greater visibility into B2B transactions so they can quickly identify and resolve supply chain issues.

What makes Business Transaction Intelligence special to us…is that it puts power back into the hands of business users and the owners of business processes.

— Nickolas Bonivento, EDI manager, Anheuser-Busch and Labatt Canada

What makes Business Transaction Intelligence special to us…is that it puts power back into the hands of business users and the owners of business processes.

— Nickolas Bonivento, EDI manager, Anheuser-Busch and Labatt Canada

See how you can apply AI today to build a modern, faster, more efficient business network. Read the paper.

03

3 min read

IoT is helping supply chain leaders better understand the state of things and take action.

The convergence of Internet of Things (IoT) and AI is enabling supply chains to access and correlate more diverse data sets to see events and scenarios as they occur.

IoT-enabled devices, together with AI (and soon 5G), are helping companies extract more intelligence from assets like products, machines and facilities. These next-level insights allow engineering, IT and supply chain leaders to more confidently identify and take next-best actions.

According to Gartner, “The increased availability of Internet of Things (IoT) data and extended external data sources such as weather or traffic conditions allow organizations to anticipate future scenarios and make better recommendations in areas such as supply chain planning, sourcing and transportation.”

IBM clients are already leveraging the power of IoT and AI with a personalized dashboard that automates the collection of information and analyzes it to provide insights that help them anticipate risks, mitigate disruptions, and see opportunities previously hidden from view. They can:

  • Leverage predictive maintenance to stay ahead of machinery repairs in the field to reduce costs by 15% – 20% and extend the lives of assets by years. 4
  • Remotely monitor the condition of shipments to ensure thresholds are maintained for temperature or humidity, and receive notification if problems occur.
  • Identify space-utilization patterns to optimize warehouse occupancy and realize up to 20% savings on total facility operations costs.5
  • Tap into prescriptive recommendations to anticipate problems and identify an alternate route to avoid shipping delays due to inclement weather.

Moving forward, insights derived from a combination of AI and machine learning, IoT, 5G and edge computing, will allow organizations to uncover opportunities to build more resilient operations and make that intelligence more transparent across the supply chain.

Connected operations empower you to view how assets perform in real-time, manage them from any location, and ultimately reduce operating costs.

— Kareem Yusuf, PhD, General Manager, IBM AI Applications

Connected operations empower you to view how assets perform in real-time, manage them from any location, and ultimately reduce operating costs.

— Kareem Yusuf, PhD, General Manager, IBM AI Applications

04

4 min read

Multi-enterprise networks with blockchain are creating trust and transparency across the supply chain.

There’s only one version of the truth. Blockchain is the way to unlock it.

Blockchain documents the history of any transaction or information exchange, creating a foundation of trust and transparency between two or more parties. All blockchain entries are permanent and immutable. The permission-based, controlled, shared view of data allows ecosystem participants to identify and reduce areas of friction, increase agility and resiliency, and strengthen trust and transparency with each interaction.

Blockchain will create USD 3.1 trillion in business value by 2030 through cost reduction and revenue growth.
— Gartner6

Enterprise blockchain technology helps supply chain participants increase data integrity, promote smarter data exchange and automate decision-making. Globally-connected and complex supply networks can capitalize on blockchain now to more securely and efficiently procure, source, manufacture and handle logistics across a broad array of players, benefitting organizations of all sizes.

You can use blockchain to document the movement of products and make permanent transaction histories, which reduce costs, delays and human error associated with manual transaction handling. We are already seeing interesting use cases of blockchain in action:

  • A global ecosystem of producers, suppliers, manufacturers and retailers makes it possible to trace food items from farm-to-fork in seconds, reducing the impact of food recalls, unlocking new supply chain insights, increasing consumer confidence, and more.
  • Exporters, importers, freight forwarders, custom authorities and others are engaging in paperless trade, sharing cross-border shipping information to increase transaction speed, efficiency and transparency and reduce costs.
  • Procurement leaders are benefitting from secure, permissioned access to pre-verified supplier information that makes it faster and easier to identify, onboard and manage new vendors.
  • Business users are getting deeper B2B transaction insights with an immutable, shared record of real-time, multi-enterprise digital events across the supply chain. The addition of AI and machine learning provides proactive alerts and predicts completion of events to help users get ahead of supply chain disruptions.

Blockchain can bring transparency from upstream to downstream, all the way to the consumption level in ways that you have never experienced before — and at the speed of thought.

— Guilda Javaheri, Chief Technology Officer, Golden State Foods

Blockchain can bring transparency from upstream to downstream, all the way to the consumption level in ways that you have never experienced before — and at the speed of thought.

— Guilda Javaheri, Chief Technology Officer, Golden State Foods

Get a jump start on your competition with multi-party blockchain-based collaboration to tackle supply chain challenges. Read IBM’s point-of-view (PDF, 3 MB).

05

3 min read

Supply chain leaders are capitalizing on intelligent order management to deliver on more customer promises.

Getting customers what they need — when and where they need it — has never been more challenging. Intelligent order management solutions can help you manage through complexity and preserve business continuity, while leaning in to cost optimization.

For retailers, global events have changed your customers’ needs and expectations seemingly overnight. More shoppers are buying online out of necessity, not just convenience. They need the right products available through a variety of reliable fulfillment options – including buy-online-pickup-in-store (BOPIS), curbside pickup and ship-from-store (SFS) – as well as flexible return options. Intelligent order management solutions help you address new buying patterns and customer interactions by connecting end-to-end inventory visibility with intelligent order orchestration, powered by AI. The result is efficient, flexible fulfillment at the lowest cost to serve – a competitive necessity in today’s unpredictable retail environment.

We believe that adding fulfillment models such as SFS (ship-from-store) will be a game-changer for Eileen Fisher. By using stock from our retail stores and warehouses to fulfill orders placed on either of those channels, we can help ensure we capture every sales opportunity and at the same time reduce the risk of large amounts of unsold inventory building up in parts of the business where demand is lower.

— Keir McIntyre, Director of Direct to Consumer Technology at Eileen Fisher

We believe that adding fulfillment models such as SFS (ship-from-store) will be a game-changer for Eileen Fisher. By using stock from our retail stores and warehouses to fulfill orders placed on either of those channels, we can help ensure we capture every sales opportunity and at the same time reduce the risk of large amounts of unsold inventory building up in parts of the business where demand is lower.

— Keir McIntyre, Director of Direct to Consumer Technology at Eileen Fisher

For industrial leaders – whether you’re in wholesale distribution, manufacturing, assemble-to-order, or logistics – your customers have the same high expectations, plus complex requirements. It’s a high-stakes pursuit because relationships are forged on your ability to reliably deliver performance-based products and services that aren’t just critical to your customer’s business, but also to their customers and downstream supply chain participants.

Intelligent order management solutions can provide you with essential inventory visibility too – even across an extended ecosystem that includes multiple acquired companies and divisions. This real-time inventory view can help you optimize stock levels and reduce shipping costs while guaranteeing order fulfillment and fewer back orders. Intelligent order orchestration capabilities should support dynamic pricing and allow you to quote and process complex orders faster.

Clients who have implemented IBM solutions for intelligent order management have also reaped additional benefits that include truly omnichannel order fulfillment, higher online conversion rates and lower internal costs.

With smarter order management, you have unlimited opportunities to create omnichannel experiences that deliver value to your customers and your business today, and help you emerge stronger from inevitable disruptions ahead.

Companies with improved order management achieve, on average, new profit of USD 4.2 million and operational savings of USD 6.4 million.
— Gartner8


What is the business value of an order management system? Forrester studies the question. Register for the Forrester report.

  1. IBM and NRF ‘Meet the 2020 Consumers Driving Change,‘ January 2020
  2. Fast Company, February 2019, https://www.fastcompany.com/90306556/most-millennials-would-take-a-pay-cut-to-work-at-a-sustainable-company
  3. Supply Chain 2029: Disruptions Impacting Future Innovation. Gartner.
  4. “IDC Manufacturing Insights: Transforming Asset Management at the Edge,” Reid Paquin, IDC, April 2019, https://www.idc.com/getdoc.jsp?containerId=US44976019
  5. “Getting Value from the Digitization of Facilities Management Services,” Susan Clarke, Verdantix webinar, 31 July 2019, https://www.verdantix.com/webinars/past-webinars/getting-value-from-the-digitization-of-facilities-management-services
  6. Gartner, “Top 10 Strategic Technology Trends for 2018: Blockchain,” 8 March 2018
  7. Forrester, “Total Economic Impact of IBM Sterling Order Management,” December 2019
  8. Forrester, “Total Economic Impact of IBM Sterling Order Management,” December 2019