Five trends that will shape the supply chain of the future

Five trends that will shape the supply chain of the future

Five trends that will shape the supply chain of the future

Five trends that will shape the supply chain of the future

Five Trends That Will Shape the Supply Chain of the Future

Introduction

2 min read

Supply chain and IT leaders must innovate continuously and invest for the long term

Digital disruption has become a way of life. Everything from customer expectations to the competitive landscape is changing.

Think about 3D printing of goods, on-demand delivery triggered by simply sending a photo of what you need and micro-productions to meet individual customer demands.

You need to optimize for today and invest with an eye to the future. What does this look like, and where are the most innovative IT and supply chain leaders placing their bets?

Moreover, real-time collaboration is vital to deliver exceptional customer experiences and requires more than your typical B2B document exchange. How can emerging technologies like artificial intelligence (AI), Internet of Things (IoT) and blockchain complement traditional EDI to deliver B2B operational excellence?

To help you answer these questions, we have identified the top five trends for the supply chain of the future: AI, IoT, blockchain, intelligent order management and quantum. Let’s explore these innovations so you can understand what it will take to future-proof your supply chain and begin your journey.

01

6 min read

Supply chains will be
intelligent and self-correcting

Intelligent, self-correcting supply chains use artificial intelligence (AI) so you can make better decisions and take more informed actions faster. More so than ever, companies are turning to AI-powered analytics to perceive patterns of demand for products and services, across geographic and socioeconomic segments.

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 find the signal in the noise and automate end-to-end processes. These innovations give you the power to:

  • Anticipate and address potential disruptions before they occur
  • Seize upside demand opportunity before your competitors
  • Simulate process optimization scenarios for better business and customer outcomes
  • Track inventory for instant visibility of 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

With next-day or two-day shipping, we have a very short window to get a product in a customer’s hands. IBM Business Transaction Intelligence lets us see end-to-end transaction status and get ahead of, or quickly resolve, any issues.

— Mylene Ortiz, Senior IT BPSA – Supply Chain, Petco

With next-day or two-day shipping, we have a very short window to get a product in a customer’s hands. IBM Business Transaction Intelligence lets us see end-to-end transaction status and get ahead of, or quickly resolve, any issues.

— Mylene Ortiz, Senior IT BPSA – Supply Chain, Petco

IBM customers have AI baked into their supply chain solutions so they can start to innovate today. Hear from Mylene Ortiz at Petco how IBM Business Transaction Intelligence enabled with AI gives her team greater visibility into transaction so they can quickly identify and resolve supply chain issues.

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

02

5 min read

Supply chains will understand the state of things and take action

Spurred in part by the Internet of Things (IoT), supply chains are increasingly integrating data from sensors, GPS and weather patterns to see events and witness scenarios as they occur.

Extracting more intelligence from assets like products, machines, facilities and processes, the next step in this evolution is to recommend or take action. According to a recent Gartner report, “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.”

With a dashboard that automates and analyzes streams of information, you can anticipate risks, mitigate disruptions and see opportunities previously hidden from view. For example:

  • Stay ahead of maintenance on machinery in the field to extend the asset lifecycle
  • Monitor the condition of shipments to ensure thresholds for temperature or humidity are maintained
  • Identify a process glitch at-a-glance, like a rejected PO, and fix it in minutes
  • Recommend an alternate route to avoid shipping delays due to inclement weather

AI and machine learning reveal not only visual patterns but, when combined with advanced analytics and intelligence about business assets, provide us with an opportunity to make that intelligence more transparent across the supply chain.

03

10 min read

Multi-enterprise network hubs will be enabled with blockchain, giving power to companies of all sizes

There’s only one version of the truth. Make sure everyone sees it.

Blockchain democratizes the supply chain, enabling a secure, transparent network with all participants. Blockchain enables companies to gain transparency across multi-enterprise networks. Supply chains will be able to procure, source, manufacture and handle logistics across a broad array of players including small to medium businesses. Creating a foundation of trust, blockchain documents the history of exchanges of information.

With blockchain, all entries are permanent and incorruptible – immutable records. The continuous participation of third-party cryptographers also ensures that the software is always ahead of the curve and that hackers are locked out.

You can use blockchain to document the movement of products and make permanent transactions histories, which would greatly reduce costs, delays and human error associated with manual transaction handling.

We are already seeing interesting use cases of blockchain in action within multi-enterprise networks, including:

  • Food Trust: A solution to instantly trace food items from “farm to fork” and provide transparency across all ecosystem participants, including consumers, to reduce the impact of food recalls.

  • TradeLens: An open, extensible platform for paperless trade, sharing cross-border shipping information across all the players and systems in the supply chain ecosystem to increase the speed, efficiency and transparency of transactions and reduce costs.

  • IBM Sterling Delivery Transaction Intelligence: A portfolio of blockchain applications that provide an immutable shared record of real-time, multi-enterprise digital events across your supply chain.

And this is just the beginning…

Gartner forecasts that blockchain will create USD 3.1 trillion in business value by 2030 through cost reduction and revenue growth. It’s easy to understand why blockchain is a top trend for supply chain in the decade ahead.1

Continue your journey. 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, 3.2 MB)

1 Gartner, “Top 10 Strategic Technology Trends for 2018: Blockchain,” 8 March 2018

04

6 min read

Supply chains will orchestrate the perfect order and master inventory visibility

Outdoor gear and apparel retail leader, REI, is using distributed order management to scale new heights – achieving an ideal fulfillment experience for customers, while optimizing margins.

The perfect order. This is the holy grail of distributed order management in the multi-system world most companies live in today. For example, by offering free shipping when shipping to store or by providing drop-box pickup along a customer’s daily commute, omnichannel creates value for potential customers and increases conversion. But how can you deliver a great customer experience without hurting your bottom line?

Supply chains of the future will enable an intelligent order management system – working on your behalf, across multiple partners – to orchestrate demands in real time from source to delivery to returns. Retailers like REI are leading the way, leveraging modern applications and a platform driven by APIs, microservices and hybrid cloud environments. They are applying machine learning to create and automate rules for shipping, sourcing, tax and logistics. Flexibility, data ingestion, analytics and AI capabilities are transforming order management and the customer experience from start to finish.

Sharing his perspective on this top trend, Rick Bingle, Senior Vice President of Supply Chain for REI explains, “Real optimization is going to help us make sure that we have the product where it is most necessary and we get the benefits of fragmentation reduction and cost of package reduction but, more importantly, we get a better moment with the customer. Whether they are in the store or online, they are getting ‘yes,’ and it is happening efficiently.”

How does REI get to ‘yes’ for each customer? They deployed IBM Sterling Fulfillment Optimizer with Watson in their supply chain. This tool uses AI to factor in the various goals REI has throughout the year, such as product margin, shipping speed and fulfillment costs, and matches that to its inventory in its three distribution centers and 155 stores.

Continue your journey. Put fulfillment at the heart of the customer experience.
Read the Forrester report.

05

5 min read

Supply chains will have new possibilities with Quantum

As technology continues to advance, Quantum reminds us that the impact of each innovation on the world has yet to be uncovered.

Quantum computers are fundamentally different from classical computers because the operating principles are based on quantum mechanics. While still in the early stages of development, these machines will provide unprecedented computational and modeling power to solve previously unsolvable problems. Today, IBM is enabling more than 100,000 people around the globe and across industries to access quantum computers for learning, research and tackling large, complex problems.

How do we believe quantum computing can impact supply chains? Quantum computing provides an opportunity to work together to solve the challenges of analyzing vast amounts of data and optimizing for logistics. Think about the ability to tap into vast sources of data to optimize routing patterns of people, goods and services all over the planet – and to do this with minimal risk.

Supply chain leaders will be able to use this overwhelming amount of data to achieve unprecedented breakthroughs. Quantum computing can crunch through numerous variables and factors, from more sources, across more scenarios, faster and with greater accuracy than ever. This fifth trend offers an opportunity to co-create the future of supply chain together with a new kind of computing.