Blog post by Diego Bermudez Bermejo (Cardiff Business School PhD candidate)
A..B..Connectivity would be the keyword that I would define as the cornerstone in this moment in supply chain management. This is what is making the difference for some businesses to evolve faster than others, adding competitive advantage. The business clock speed, as Charles Fine calls it, determines how fast any industry is evolving according to the complexity of the activities performed, but the digital evolution has made everything move faster in some ways, also adding more complexity.
Here are some of the most important trends that are influencing the future of supply chains:
- Autonomous business units
Fast decision making relies on having small independent groups that can take their own decisions but also coordinate with other teams, like an army campaign, but without war. Every team must be aware of the implications of each decision, looking for optimization but adaptation along the journey, someone said AGILE?
- Blockchain visibility
Keeping track of everything that happens in your supply chain is difficult, but one of the technologies that promises to make it possible is BLOCKCHAIN with its collective-distributed network, where also everybody is made accountable.
(Disruptor daily, 2019)
- Cloud-based shared platforms
Accessibility from anywhere by anyone who’s authorized which could make the processes more efficient by sharing capabilities among the different businesses (i.e. Economies of Scale and Lean). Why buy a software license? just rent it for the time you use it.
(Direction forward, 2019)
- Digital-value chains
Feedback enhanced consumer interaction through API in a mobile interconnected environment (i.e. IoT). A service where most companies are exploding now is the information collected from the internet and the apps that people use to foresee their behaviour. Predictive environments might be able to make more accurate forecasting in the future, which will allow to reduce costs and increase profits for companies as variability is reduced. Here is an example applied to the automotive industry.
- Environmentally friendly
Reduce, reuse and recycle are principles that are becoming more common for companies and not only individuals. The circular economy is finding more echo around the world, some people prefer a clean world (i.e. 5 S’s) some others are starting to realize the effects of global warming. A good example is Patagonia’s footprint chronicles, where they track their clothing social and environmental impact.
- Integrated supply chains
Companies are focusing on activities where they can add value, outsourcing all the rest, but how to keep track of everything when you have a medusa-like company where each head needs to feed itself? A mastermind control could help with the performance tracking, yet there might be a problem related with the process ownership.
- Machine learning
A.I. Algorithms and super computers can help to provide fast information and take automated decisions. Applications are related with predictive maintenance in the manufacturing environment, which is a controlled environment in terms of variables. As technology evolves, more applications will surge in an open loop environment where almost anything can alter your process.
- Resilient supply chains:
Humanitarian supply chains confront difficult situation in which they need authorization for treatment with non-standardized products, so sometimes they must improvise and create a hack to overcome restraints. Resiliency comes from not only from the physical side but also the digital side, as more digital dependable supply chains imply more vulnerabilities, the challenge is to make the information available but maintain the confidentiality and integrity of it.
Business resilience framework (Janellis, 2019)
- Short product life cycles
Competition, along with other factors, is making companies to lean down their processes to offer new products more frequently, according to their industry clock speed (Fine, 2008) and maintain costumers satisfied. Some other trends are on the side of build it yourself with a 3D printer, kind of a fast-food solution.
(Dansk Am Hub, 2019)
- Welfare conscious
Living wages, NO modern slavery, ethical supply chains, this are still developing concepts that will become more common every day if people become more aware of the situations around the world and are also able to track them.
The bits and pieces are there, but the complete picture is still unclear, the pluribus will determine how things work or don’t in the world, the geographical regions and in each industry, but at this moment we might not be sure of how the machine looks like, but some academics in a remote country called Wales belief a systems thinking approach could help…
(Supply chain brief, 2019)
I want to thank the Logistics and Systems Dynamics Group (LSDG) and Cardiff Business School (CARBS) as they are supporting my research.
Agarwal, S. (2015) Creating digital value chains. Akana. Available at: https://www.akana.com/blog/creating-digital-value-chains-apis [Accessed: 22 July 2019]
Dansk am Hub (2019) 3d prints are older than you think. https://am-hub.dk/en/3d-print-er-aeldre-end-du-tror/ [Accessed: 22 July 2019]
Direction forward (2019) Shared Drive. Available at: https://cloud.directionforward.com/services/shared-drive [Accessed: 22 July 2019]
Hayley (2015) Janellis Business Resilience Framework – assurance risk response readiness. Available at: https://janellis.com.au/janellis-business-resilience-framework-assurance-risk-response-readiness/ [Accessed: 22 July 2019]
Hugos, M (2010) Five Traits of an Agile Enterprise – Parts 4 & 5. Available at: https://www.cio.com/article/2372922/five-traits-of-an-agile-enterprise—150–parts-4—5.html [Accessed: 22 July 2019]
Mire, S. (2018) Blockchain In Supply Chain Management: 13 Possible Use Cases. Disruptor Daily. Available at: https://www.disruptordaily.com/blockchain-use-cases-supply-chain-management/ [Accessed: 22 July 2019]
Smartsheet (2019) Integrated Supply Chain Management: Horizontal and Vertical Integration. Available at: https://www.smartsheet.com/integrated-supply-chain-management-vertical-and-horizontal [Accessed: 22 July 2019]
Supply chain brief (2017) Supply Chain Cartoon Caption Contest. Available at: http://www.supplychainbrief.com/edition/daily-supply-chain-logistics-2017-09-27/?open-article-id=7274850&article-title=supply-chain-cartoon-caption-contest-starting-sept–25–2017&blog-domain=scdigest.com&blog-title=supply-chain-digest [Accessed: 22 July 2019]