Gartner's four factors of the future supply chain

posted by Steven Steutermann
1 July 2019

Supply chain leaders must invest in advanced technologies to keep up with shifts in society and prepare their organisations for the future.

Understanding trends and impacts is a challenge for leaders, particularly during a time when the supply chain is undergoing a major transformation. Before we know it, supply chains will be more autonomous, self-regulating, and take appropriate actions with minimal human intervention. This, in turn, will increase human capability well beyond what it is today.

Gartner has identified four main factors that will converge as the supply chain transforms. Leaders are well advised to take heed of these changes and act accordingly in order to capitalise on the opportunities that lie ahead.

Factor 1: a diminishing labour supply

In 2012, the world labour supply hit an inflection point: the proportion of non-working-age population growth was greater than the working-age population. This trend is expected to continue and will have a significant impact on supply chain talent planning. Programmes built to attract and retain talent will prove invaluable.

The future supply chain workforce must possess digital dexterity. Adaptability to technology and readiness to engage with advanced analytics and artificial intelligence (AI) will be crucial. Digital dexterity training will come to be an integral part of every supply chain talent programme.

Factor 2: intelligent machines

We are yet to witness AI’s  full potential, but this is likely to change within the next few years, particularly when it comes to supply chain use cases such as demand planning and order-to-cash processes.

Supply chain leaders already use machine learning to handle daily tasks. In the future, AI will thrive across supply chain environments thanks to its ability to remove complexity, automate daily decisions, predict orders, and reduce costs.

Factor 3: virtual is the new reality

Certain industries are already using image technology to identify out-of-stocks and retail store conditions in near real time. 3D digital products enable on-demand production and personalisation. These are just two examples of virtual capabilities that will continue to emerge and impact the supply chain.

Leaders should also be aware of “digital twins,” a technology that is set to redefine supply chain models. Digital twins will create a digital representation of not only physical products or assets, but also processes and their characteristics. This technology will be perfect for experimentation and modelling to test for critical variables.

Factor 4: a circular mainstream economy

In the future, we will no longer be dealing with a linear economy, due largely to society’s growing resistance to avoidable waste production. Supply chain leaders will have to embrace a circular economy in which a product can be returned, recycled, or reused in some form.

Delivering customer value with minimal waste will be the supply chain’s ultimate goal. To achieve such a system efficiently, automation will be key — and this is where the previous factors come into play. Adopting technologies such as digital twins and AI will enable supply chains to exist in line with circular-economy principles by acting autonomously and ultimately becoming their own ecosystems.

☛ Steven Steutermann is managing vice president, supply chain at Gartner

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