Supply chain innovation and trends
Businesses are turning to technology to optimize their supply chains in an era when customer expectations for speed and convenience are rising every day—and the global supply chain doesn’t always cooperate. Fortunately, supply chain technology is evolving to meet these challenges, with new solutions emerging regularly.
No matter what industry you’re in, updating legacy systems and adopting advanced supply chain logistics and technology can make your business more resilient and competitive.
What is supply chain technology?
Supply chain technology is hardware or software that makes supply chain processes more efficient. A wide variety of digital technologies fall under this umbrella, ranging from physical equipment such as robotics and sensor-enabled devices, to software designed to optimize the flow of data, predict trends, connect systems, improve logistics, or manage inventory. Infusing digital technology into each “link” in the supply chain can speed production and delivery while minimizing costly disruption.
Supply chain technology began changing the way business is done long before the disruptive events of 2020. But the unwelcome challenges of that time did bring the benefits of supply chain innovation into sharper focus. Some of the persistent challenges companies face are rapidly changing consumer expectations, unpredictable global events like geopolitical constraints and weather emergencies, and new business models that make competition fierce. Supply chain management has always been full of complexities, but never before have businesses been expected to pivot more quickly to solve them.
To remain competitive in the present environment, it’s important to optimize your operations and minimize your risks. New supply chain technology offers the ability to create more efficient processes while building a more resilient supply chain—and seizing opportunities to scale or change direction when they present themselves.
7 trends in supply chain innovation
Today’s top supply chain technology trends reflect businesses’ desire to streamline and future-proof all aspects of their operations. The following seven trends can refine your decision making and processes from the back office to the shop floor and beyond.
1. Using robotics to work faster
Robots have been used in industrial manufacturing for decades, but increasingly, they are also being adopted in warehouses, fulfillment centers, and distribution centers. The business needs created by rising labor costs and shortages—not to mention consumers’ expectations for always-in-stock products and fast delivery—are being met by advancements in robotics. Robotics can greatly speed up order fulfillment, freeing up human employees for less repetitive and more strategic tasks.
One supply chain innovation that is gaining popularity is the collaborative robot, or “cobot.” With the help of AI and machine learning, cobots have become sophisticated enough to pick and pack orders safely alongside their human counterparts, guiding them through tasks, lifting heavy objects, and fetching products from vast warehouse aisles. Cobots have been known to not only increase productivity, but to also save costs, reduce human error, and make workplaces safer.
2. Making data-driven decisions using AI and advanced analytics
Data science is playing a major role in advancing supply chain technology. At every point along a complex supply chain, there are a huge number of data points ripe for collection. If you have AI and advanced analytics in place, you will be in the best position to make sense of that data and use it to your advantage.
AI and advanced analytics work behind the scenes to pore over big data using algorithms and predictive methods so supply chain users can make fast, data-driven decisions to boost profitability and get ahead of disruption. For example, these kinds of supply chain insights can help a business proactively scale their inventory in anticipation of a period of high demand or revise a shipping plan following a natural disaster. Many applications provide data visualization tools that boil AI-derived data down into easy-to-read graphs and charts, so employees spend less time on interpretation.
3. Driving efficiency with automation
Supply chain automation drives efficiency and speed. It takes time-consuming and error-prone tasks out of human hands and runs them effortlessly and accurately.
Many supply chain tasks can be automated to save human time and energy. For example, automated supply chain processes can take data from purchase orders to populate invoices, send out order confirmations and tracking information to customers, calculate the most cost-effective routes and carriers for shipments, or signal employees to replenish low-stock inventory. This is an area of supply chain logistics and technology development that is teeming with possibility.
4. Building a simplified, composable IT system
Composability is an emerging supply chain technology trend that involves using modular, “building-block” software to connect the data between systems for increased supply chain and operations visibility. Composable solutions can be especially helpful for enterprises with a sprawling IT landscape.
Composability integrates disconnected systems to enable informed, timely decision making. It doesn’t require you to replace software that you already use every day, making it a cost-effective way to get the big picture of your supply chain operations—even on a global scale.
5. Collect data at every point using Internet of Things (IoT) devices
Wi-Fi and Bluetooth have made it possible to use IoT devices as vital supply chain technology tools. IoT devices are sensor-fitted objects such as warehouse stations, shipping containers, and finished products that transmit data to the people who need to make quick decisions.
IoT devices can track information such as the location and condition of goods, weather, and traffic in real time to monitor your assets and resources and proactively mitigate problems.
6. Exploring “what ifs” with digital supply chain twins and control towers
A growing number of businesses are adding digital twins to their supply chain technology resources. A digital supply chain twin is a virtual environment that pulls data from your actual supply chain so it can run simulations to improve your decision making. A digital twin can help you spot ways to increase productivity while finding fast and economical solutions to challenges.
Control towers also yield insights that can help you with “what-if” scenarios. Control towers are dashboards that bring together key data, metrics, and events to give you real-time, end-to-end visibility. They are a vital supply chain innovation to streamline and protect operations in logistics, supply coordination, inventory, and fulfillment.
7. Using blockchain to record the exchange of goods
Blockchain may seem like an unexpected supply chain technology trend. You’re probably used to hearing about it in the context of cryptocurrencies. However, blockchain is a valuable tool because it creates an unalterable record of transactions. It can make the exchange of goods a more trustworthy process.
Providing transparency about the origin and journey of goods and materials is growing in importance. Governments need to ensure that companies are complying with regulations, and companies want to build a reliable supplier network. Consumers are also increasingly interested in the provenance and sustainability of the goods they buy, making blockchain technology a forward-looking investment.
How these supply chain trends impact your business
Supply chain optimization technology is dramatically improving operations and increasing resiliency for businesses in a wide variety of industries. The visibility and agility that the digital transformation of supply chain processes affords is a vital competitive advantage in a fast-paced market. Your customers don’t think much about supply disruption, logistics issues, and production delays. They simply want to know if you can get high-quality products to them as fast as your competitors.
Here are just a few ways to use supply chain technology to mitigate disruption, increase customer satisfaction, and boost profit.
Forecast demand more accurately
Traditional demand forecasting involved looking at past sales data, making educated guesses, and hoping for the best. Use AI-enabled technology to reduce guesswork and risk at the same time. Having visibility into real-time upstream and downstream activities and connecting them with external factors such as weather, current events, and customer reviews will help you make better decisions to meet demand. Avoid lost profits by using predictive data analysis to reduce stockouts, replenish on time, and optimize warehouse inventory levels.
Enable on-demand logistics and delivery
No matter what your products or services are, speed is key to your customer experience. New supply chain technology can deliver on that customer promise. Deploy robotics and automated workflows in your business to make fulfilling and delivering your products as fast and economical as possible—which is exactly what consumers expect.
Streamline procurement processes
It used to be labor-intensive to search for ways to save money along every link of the supply chain. But companies that use advanced supply chain technology have the advantage of AI working in the background to crunch numbers. Use AI-enabled software linked to vendor collaboration portals and catalogs to save money and make procurement decisions quickly.
Monitor operations in real time
With the help of sensor-enabled IoT, supply and demand information can stream continuously into your business—no matter how quickly fluctuations happen. Maximize the efficiency of your operations and build resiliency with supply chain and logistics technology that reacts automatically to challenges.
How to implement new supply chain technology
Your supply chain won’t slow down while you implement new technology, so it’s important to choose solutions that can be quickly deployed and will work with your existing systems. Start by:
- Convening teams to identify which areas of your operations need critical new capabilities.
- Prioritizing each new supply chain innovation you want and making changes incrementally to ensure business continuity.
- Considering prepacked solutions that don’t require custom coding.
- Choosing a low-code or no-code interface on a cloud that allows you to unify your data.
- Taking advantage of software that offers the latest AI, machine learning, and automation capabilities on the market.
Make your adoption of new supply chain technology simpler and more cost-effective by implementing Microsoft Dynamics 365. It can help you build a more resilient supply chain with a modular platform that integrates with the systems you use now. With Dynamics 365 Supply Chain Management, you’ll gain agility and real-time visibility across your operations—so you can prepare for whatever’s next.
Frequently asked questions
What are the latest technologies in supply chain management?
The latest technologies in supply chain management include sensor-enabled IoT, robotics, AI and advanced analytics, automated workflows, digital twins, control towers, blockchain, and composable software solutions. All these supply chain innovations are creating remarkable new efficiencies in a variety of industries.
What is supply chain technology used for?
Supply chain technology is used to gain real-time visibility over operations, inventory, and demand and to streamline processes across diverse business areas. It can help businesses act quickly on cues from suppliers, customers, and the outside world to minimize costly disruption.
What are emerging supply chain technologies?
Emerging supply chain technologies focus on using advanced and evolving capabilities such as AI, robotics, geolocation, and IoT to make it easier to mitigate supply chain challenges, speed delivery, and optimize manufacturing and fulfillment processes.
What is the future of the supply chain industry?
The future of the supply chain industry will be marked by increased speed and business agility to meet consumers’ constantly shifting expectations. Supply chain optimization technology is enabling new efficiencies across business activities, ranging from the sourcing of raw materials to the delivery of finished products.
How is technology improving supply chains?
Technology is improving supply chains by giving businesses greater visibility into all their data, analyzing data to enable optimal decision making, and automating processes to free human workers from mundane, error-prone tasks. New supply chain technology is also helping businesses meet customer demand for product availability, quality, and delivery.