Supply Management asks futurists what business will be like in 2050, and how that will affect procurement
Futurology is an imprecise science – and sometimes the results can be unintentionally hilarious. Take, for instance, the predictions experts have previously made for what the world would be like in 2020. In 1967, the RAND Corporation think tank told Americans the year 2020 would see us being served by super-intelligent, specially bred apes capable of performing household tasks and acting as chauffeurs. Other experts have variously suggested we would be seeing in the dark by now, that helicopters would be as common as cars and that everything from sawdust to rayon underwear could be chemically converted into sweets to eat.
But not all suggestions are as outlandish or inaccurate. And when it comes to understanding what supply chains will look like in the future, or what type of procurement roles will be required in a generation’s time, the views of forward-looking experts can offer valuable insight.
There are plenty of developments out there that mean the supply chain of tomorrow could bear little resemblance to the world we know today. But there is also an overarching concern that caveats all crystal ball-gazing: if we do not tackle the growing environmental crisis, we will not have a world left to conduct business in.
“My natural inclination is to suggest we are headed for the apocalypse,” says Dr Elouise Epstein, a digital futurist, vice president at AT Kearney and co-author of a series on the future of procurement. “Tomorrow’s supply chains need to put environmental impact front and centre. Consumers are increasingly demanding it and governments will too. Despite propaganda, most people can see global climate change is real. And most corporate responsibility programmes are a joke.”
“The big game in town is climate change,” agrees fellow futurist Mark Stevenson. “There’s no point delivering anything to anyone if we’re all burned to a crisp. We need the people who care about this to move quickly… If you can start to make supply chains more sustainable you’re going to be a hero. It should be the ambition of every supply chain professional to say: ‘We’re here to clean up the world’.”
Tackled properly, climate change represents not just an existential threat, but an opportunity to rethink business models. Pierre Mitchell, chief research officer and managing director at Azul Partners, says logistics will need to be nimbler and more localised in the decades ahead. He points to shifts in the food supply chain – with a heavy focus on hydroponic farms where produce can be grown in giant greenhouses – and the water supply chain, where desalination plants and local water condensers will be vital in a world of increased scarcity. Lithium and other rare earth metals will become essential to manufacturing.
Stevenson expects carbon labelling will become prevalent and believes we have between 20 and 30 years in which to make supply chains sustainable or face the consequences. He names Unilever and Danish energy giant Orsted [formerly Dong Energy] as businesses making huge strides away from reliance on fossil fuels.
Agile supply chains, and broader economic shifts, will also mean new opportunities for regional rebalancing.
Sam Achampong, head of CIPS in the Middle East and North Africa (MENA), says local supply chains have a tradition of being highly agile, especially in the face of rapidly changing geopolitical conditions. As it attracts inward investment and trade as a result of diversification initiatives, future indicators suggest the MENA region will increasingly benefit from its strategic geographic position, he says, with the potential for becoming the world’s largest trading hub.
“Areas such as Jebel Ali Port in Dubai, the rapidly expanding Al Duqm Port in Oman and King Abdullah Port in Saudi Arabia cement this view,” says Achampong. The region is already an early adopter of technology, with drones, robotics and ‘smart gate’ systems already common.
Meanwhile, China celebrated 70 years of Communist Party rule in October 2019, outlining its two centenary goals as the economic and territorial rejuvenation of the nation by 2049. According to McKinsey, the country is the world’s largest trading nation in terms of goods and is expected to become the largest economy within a decade, regardless of controversy over the blacklisting of some Chinese technology suppliers by Western countries.
These factors mean businesses will have to continue to manage the competing priorities of delivering the best product to customers in a sustainable fashion, but it is likely there will be an increasing expectation they will look close to home for goods or services.
Nick Jankel, futurist and speaker on business transformation, believes supply chains will forever be both global and local, but adds: “It is likely there will be increased globalisation of supply chains as transactional frictions drop, with technologies like blockchain allowing for seamless and immediate information on everything from embodied carbon to the town or field of manufacture. At the same time, a combination of our ongoing identity crisis – the rebirth of nationalisation and city-level thinking – and the climate crisis will be driving local manufacturing, sourcing and supply to reduce carbon and pollution and increase ‘localness’.”
He says national and local leaders, particularly at a mayoral level, will increasingly have the power to set trade agreements that deliver on low carbon and other regional political agendas. “At the same, the empowered consumers from the ‘disrupted generations’ such as millennials will continue to demand ethical and low-carbon supply chains and locally sourced materials that drive community value and wealth.”
Epstein says she has no doubt supply chains need to be more local. “We have spent so much time and money building global supply chain systems, but in reality, technology such as 3D printing, popup manufacturing and biotech is eviscerating that way of operating.”
Why would medical devices, for example, be designed in the US, manufactured in China and shipped back across the Pacific, she asks, when 3D printing means they could be produced directly at the point of need.
The answer, says Stevenson, is balance. “We’ll still have physical supply chains and many will be global – otherwise we’ll need new sustainable and regenerative supply chain infrastructure for food and energy. You can’t find raw materials like titanium dust in Swindon. But supply chains will operate more in a collaborative ecosystem of partnerships – something some of the more sophisticated companies already do.”
When it comes to the impact of technology, the predictions become trickier because it is harder to foresee the precise innovations that are coming down the line. And not all of them are positive. Mitchell, for example, expects huge amounts of procurement will be automated through AI-based systems, while Epstein is concerned about the security of the data that underpins transactions: “Talk to security people and you realise how fragile and susceptible digital systems are to breach. Once we have new ERP systems, we will need new ways of digital security.
“Businesses need to put greater efforts into IP protection, R&D, security and financial stability… To build or operate a supply chain in the future will require businesses to build extensible, flexible and resilient chains that can flex local or global with changing political and economic conditions.”
Glenn Steinberg, EY global and Americas supply chain leader, says it is no longer an option to not incorporate digital elements into your operations, but it is important to identify the right approach.
He points to three key developments that offer hope for procurement professionals. First, ‘lights-out planning’ greatly reduces the reliance on human input into the planning process and replaces it with machine learning and artificial intelligence. Meanwhile, blockchain produces one source of truth for a whole value chain or ecosystem, which enables companies to truly understand their pricing and associated costs throughout their entire value chain.
“Those who are able to effectively apply new technologies to their supply chains are likely to be the leaders both in an environmental and economic context. For example, the unfolding trade discussions involving the US, China and the EU, together with Brexit, could end up as the perfect use case for emerging technologies such as blockchain in supply chains,” says Steinberg.
The goal here is to identify the right kind of “fourth industrial revolution” technologies that will converge to create genuinely smart supply chain ecosystems that can self-optimise, freeing procurement professionals for a whole range of value-added tasks. But in the meantime, there are more pragmatic concerns to tackle first.
“I hope supply chain capabilities will be built proactively by leaders to stave off climate change rather than just reacting to the terrible decisions, and indecisions, we’re faced with today,” says Mitchell. “Put simply, supply chains will need to help us save the world.”
Trust me, I’m a robot…
By 2050, routine legal work, medical diagnostics and even surgery could be undertaken by robotic process automation (RPA). This would free up professionals from repetitive work such as processing claims, administration and some finance and accounting, as well as providing prescriptions, collecting patient data and billing in healthcare.
We could see a boom in precision medicine, where tailored, granular-level treatments are given to patients to suit their genetic makeup, lifestyle and environment. At the moment, that means getting the right blood type in a transfusion. But by 2050, you may be able to take a supplement that treats your individual diagnosis of diabetes or cancer with personalised compounds.
Asteroid mining could become a reality as soon as 2025. A number of businesses are already looking into the commercialisation of space, including those exploring thousands of near-Earth asteroids to see what valuable metals and minerals they contain and how they can be prospected. Meanwhile, robotic fabricators could in future assemble lightweight structures in space.
Oh yes, I’ll have that
Although he missed the mark with his recycled underwear forecast, science writer Waldemar Kaempffert correctly predicted by 2020 we’d be shopping with picture phones. It now seems likely by 2050 fashion sales will feature VR changing rooms and AI-enabled shop assistants that remember your measurements. Gap already operates an app that lets customers “try on” clothing through a smartphone – and others will surely follow suit.
Talk to the hand
Advanced brain-to-computer communications could revolutionise human capabilities. Some artificial devices are already replacing the function of impaired nervous systems, but in time, brain signals could talk to external systems and be applied in areas such as gaming, where we will be able to control the action on a screen via the power of our thoughts.
Beyond 2050, fusion reactors could start generating electricity – and never stop. Unlike the current power plant process of nuclear fission, nuclear fusion requires less fuel and produces no radioactive waste. But it does require immense energy to get started and experimental reactors currently consume more power than they produce. Scientists are working on making it a viable option and believe once it is tapped, we’ll never run out of power.
Prepare your CV: procurement jobs of 2050