Reinventing the Future of Supply Chain Management

Reinventing the Future of Supply Chain Management

Andy Grove is one of the founders of Intel. During his lifetime, he pioneered the semiconductor industry when the word ‘computer’ was used to refer to a human being who performs calculations. In his insightful book, “Only the Paranoid Survive,” he defined what an inflection point is:

“A strategic inflection point is a time in the life of a business when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end.”

Supply chain management (SCM) is at an inflection point. The same automation sweeping across myriad industries is also affecting the process-intensive SCM function. Within a decade, SCM might have an operating model that is barely recognizable.

From dock stations to data towers

Until recently, a typical supply chain system relied heavily on analog records and physical processes which dictated the pace at which the supply chain moved. These processes were also prone to human errors which resulted in various inefficiencies. Now all that is set to change.

The inflection point that Andy Grove wrote about is coming to supply chain management. And it is coming in the form of new-age digital technologies. Of course, we already have tons of software, cloud servers, and many other tools that are digitizing everyday supply chain processes. But this inflection point is brought to dock stations by data towers and automation technologies.

Driverless vehicles, Internet of Things, optical scanners, tracking sensors and a host of other technical innovations are turning docks and warehouses into data churning endpoints. All data created are collected and analyzed at “digital control towers.” Similar to an airport control tower, these digital control towers will be manned by data analysts working round the clock to monitor data-filled dashboards, manage inventory levels, forecast delivery schedules and much more. The dashboards will have real-time data flowing in from remotely located sensors which requires no human intervention whatsoever, thus eliminating human error and its inherent inefficiencies.

Automation in the real world

Automated robots driven by motion sensors and a software program managing a supply chain might sound like science fiction, but news from the real-world proves such technologies have already been implemented by enterprises. Walmart has its own grocery-picking robots. DHL is recruiting robots to amplify their productivity by 25% (Supply Chain Drive). In fact, that online order you received recently was most likely handled by an automated robot at some phase of the supply chain.

In a way, we are currently living the futuristic world that Isaac Asimov predicted 35 years ago in an interview for the Toronto Star newspaper. He predicted that “Robotics would revolutionize the way we work, with automation stealing clerical and factory jobs, forcing people to reconsider new careers or even living a life rich in leisure."

Asimov’s predictions have come true in today’s supply chain world and also in several other industries. Automation has stolen clerical and factory jobs. The menial jobs that laborers used to do is now taken over by intelligent robots that have arms and software brains that never tire. Like Asimov predicted, the time has come for people to reconsider new careers.

Adapt or perish — the predicament for supply chain professionals

Intelligence firm Tractica in its 2017 report forecasted that by 2022, worldwide shipments of warehousing and logistics robots will touch 938,000 units. Presumably, it will put many laborers out of work as well.

The brighter side is that robots cannot function on their own. The robots we have among us today are a far cry from the self-thinking independent robots depicted in Hollywood movies. They are more collaborative robots that need to be instructed, i.e., programmed, and humans are required for that. In fact, when JD.com — the Chinese logistics player - opened its completely automated warehouse , it still needed four people to handle the automation.

In the coming years, as the supply chain evolves, there will be tremendous demand for professionals who can orchestrate supply chain automation. They will have to put on the hats of data analysts and system admins who control the ground-level activities of supply chain from a far-off located data control tower.

Read More: 5 Methods to Improve Your Supply Chain Management Process

The supply chain professionals of today must acquire new skills themselves or perish. In fact, this is history repeating itself. In the 19th century, Luddites — a secret oath-based organization of English textile workers- protested against the modernization of the British textile industry. They preferred the old way of weaving by hand which was time-consuming and inefficient in terms of productivity. While modernization revamped the British textile industry, it sure did create new form of jobs that Luddites and other workers have adapted themselves to.

The truth is — automation eliminates some jobs, but not employment.

The end or a new beginning for a supply chain management?

An airport runway ends after a couple of miles, signaling the point where planes lift off for their destinations. The same applies to supply chain management. The old days of analog-driven processes are coming to an end as a new beginning driven by automation is taking off. It is time for supply chain professionals to adapt their skillsets or perish as obsolete resources.

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