New technologies like the internet of things (IoT), big data, and social learning platforms have the power to transform the supply chain to make them more efficient, leading to competitive advantages across industries. Market research firm Gartner Inc. is betting these technologies will help to further digitize the supply chain over the next five years.
In fact, manufacturing executives are optimistic about the future of their digital supply chain transformation. Five years from now, 54 percent of organizations expect to have access to most of the data from their extended supply chain, according to a 2016 survey conducted by GT Nexus and Capgemini Consulting.
Gartner’s Hype Cycle for Supply Chain Strategy calls out several new technologies and strategies that will become mainstream in the digital supply chain. These include social learning platforms, solution-centric supply chains, big data, IoT, supply chain visibility, diagnostic analytics, supply chain management business process as a service, and descriptive analytics.
"We expect several new technologies and strategies to further digitalize organizations by transforming the supply chain," said Noha Tohamy, research vice president and distinguished analyst at Gartner, in a statement. "In this year’s Hype Cycle (see Figure 1) we’ve picked out several technologies and strategies that should be on the supply chain leader’s radar, as they will reach maturity in the next five years."
Gartner forecasts the implementation of these technologies at different stages of its Hype Cycle for the supply chain - at the peak, at the trough, on the slope, and reached the plateau.
Here is a snapshot of Gartner’s forecast.
During the “At the Peak” stage Gartner expects social learning platforms and solution-centric supply chains (SCSCs) to become mainstream in the next two to five years.
Gartner believes social platforms will capture the knowledge of long-term employees retiring, which can be shared with younger workers across multiple business units and geographies. Tohamy also recommends that companies integrate social learning within their IT programs to maximize the benefits.
Solution-centric supply chains (SCSCs) are currently seen in high-tech, medical, consumer and industrial sectors and offer customers personalized products, data and services from a digitally-enabled ecosystem of partners, said Gartner.
In the “Trough Phase,” Gartner expects big data to achieve mainstream maturity in the next two to five years. Big data is seen as an enabler today, but organizations are focusing on improving analytics and integration to drive big data strategies for mainstream use. Use cases from external data sources include collaborative demand fulfillment and supplier performance management.
There are five technologies in the “On the Slope” phase that Gartner expects to mature within the next five years.
Gartner believes supply chain visibility (SCV) and centers of excellence (COE) competencies will become standard practice. SCV delivers timely, accurate and complete views of plans, events and data across the entire supply chain including external partners and will see mass adoption within two to five years as internet of things (IoT), data and analytics solutions mature.
While COE focuses on developing and implementing best practices across the business, it won’t become mainstream for another two years because it “lacks structure due to weak mandates, uncertain missions and lack of clear governance and performance metrics.”
Diagnostic analytics analyzes why an event or trend happened in the supply chain but it lags the adoption of descriptive analytics “because it requires a clear understanding of the intertwined relationships in a supply chain, which must first be provided by descriptive analytics.”
Supply chain management (SCM) business process as a service (BPaaS) is an external service that delivers standardized processes, such as compliance and regulatory reporting, freight forwarding, customs processing and aftermarket services, through a cloud-sourced technology platform.
While targeted supply chain segmentation has been used in business for a decade, Gartner expects it will reach mainstream adoption within two to five years.
Gartner said descriptive analytics is the only technology that has “Reached the Plateau” of productivity in this Hype Cycle. With descriptive analytics capabilities spanning reporting, dashboards, supply chain visibility, data visualization and alerts already improving supply chain insight, mainstream adoption is less than two years away, according to Tohamy.
In the context of recent hurricanes in Texas and Florida, digital supply chains can improve a company’s response to supply chain disruptions. These natural disasters have caused logistics disruptions due to port, airport and road closures across industries including the high-tech supply chain, chemicals, consumer goods, and construction materials.
“Companies already using analytics software to manage goods in transit will have the benefit of gleaning insights from the volumes of big data accumulated. And to maximize optimization, they should also analyze historical data to forecast what might happen down the road,” said Savi Technology.
Gartner also expects several other technologies and strategies to drive supply chain improvements beyond the five years.
"Looking further out than five years, we can even more exciting technologies coming over the horizon," said Tohamy. "We expect that artificial intelligence, machine learning, corporate social responsibility and cost-to-serve analytics will all drive significant shifts in supply chain strategies within the next decade."