When you produce basically anything, strong supply chain management is imperative. When a supply chain works well, the customer experiences better product quality and distribution. When it doesn't, productivity, revenue and customer satisfaction plunge.
Fortunately, business innovation in the supply chain management space has flourished over the last few years, mainly due to digital advances. Here's a look at 10 business innovations that are positively impacting the space.
1. Data Analytics
Big Data analytics improves in sophistication every year, allowing supply chain managers to derive knowledge and insights from huge amounts of both structured and unstructured data coming in via a variety of sources. Solutions powered by machine learning algorithms analyze data to predict machine malfunctions and transportation delays and help managers make more cost-effective decisions up and down the supply chain.
2. Transport Management Software
Known as TMS, these programs are a critical underpinning of supply chain management. They provide a logistics platform allowing supply chain managers to optimize fleet operations and efficiently execute the physical movement of goods. This business innovation is increasingly important as shipping costs and customer demand for faster delivery continue to rise. Using TMS, supply chain managers can better track inventory and materials across the supply chain in real time.
3. Radio Frequency Identification
RFID has been around for a few years now, but its integration into supply chain management has experienced stops and starts. This business innovation uses electronic fields to automatically identify, follow and track data like the temperature of objects that have attached RFID tags. The tags look like barcodes, and their implementation has recently become less cumbersome and expensive due to smart advances in sensor technology and increases in data processing speeds.
RFID isn't the only business innovation improving the tracking aspect of supply chain management. New geolocation solutions leverage low-power wide-area (LPWA) networks and are decreasing both the cost and the energy consumption associated with more traditional tracking. By securely connecting trackers and sensors to the cloud via the Internet of Things, supply chain managers can view and transmit data globally.
5. Robotic Process Automation
In its infancy, RPA-driven robots performed simple, repeatable tasks on factory floors. Supply chain management components that required more skills-based, complex interactions were still reserved for humans. That's changing, however, as advances in cognitive process automation and optical character recognition allow robots to make judgments and recommend actions based on data patterns rather than rigid, pre-programmed rules. As intelligent bots, they may also have direct interaction with customers.
6. Augmented Reality Inspections
Augmented reality involves overlaying virtual information on a real-world environment, and it's increasingly being used in supply chain management to perform asset inspection and maintenance. Several applications have already been developed that eliminate the need for human inspectors to physically travel to sites. Even customers are getting in on the action, as new AR programs provided by manufacturers allow purchasers to inspect and troubleshoot their own equipment.
7. 3D Printing
When we think about 3D printing applications, prototypes come to mind. But as the technology becomes more pervasive, its uses are spreading across the supply chain. Three-dimensional printing is the process of making a physical object from a digital model by laying down many thin layers of a material in succession. It's also known as additive manufacturing, and its advantages include easily modifiable designs and far less labor-intensive assembly.
Business innovation in the supply chain management space has flourished over the last few years, mainly due to digital advances.
This new model for fulfillment involves a network of local couriers who transport customer goods from one place to another. Businesses pay couriers per delivery or shift and they use their own transportation and mobile phones, eliminating some of the typical complexities associated with supply chain management. Customers like it because they can receive an ordered item immediately (i.e. instant gratification) and can select a timeslot when they'll be home.
9. Alternative Fuels
Diesel has been a mainstay in the supply chain management world, but slowly but surely, organizations are taking advantage of more sustainable energy sources like electricity, hydrogen cells and natural gas. Although switching from diesel to a renewable fuel source can present upfront cost, infrastructure and standardization challenges, it allows companies to decrease their environmental impact and avoid the well-known price volatility associated with diesel.
10. Driverless Vehicles
Trucks that don't require human drivers for long hauls will, of course, transform supply chain management. But in addition, machines will control these trucks so they follow each other in close formation, improving safety and lowering fuel consumption. In the near future, they may also be fully electric as enhanced battery life makes greater distances possible.
Which of these 10 business innovations have come to fruition in your organization? What challenges and opportunities have you seen so far?
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