The Future of Supply Chain Management in Businesses 

The Future of Supply Chain Management in Businesses 

Business 31 May 2024 8 Mins Read

In the Future, supply chains will be very complex. It will only be possible to manage them with intelligent tools. So, most companies will use techniques like digital alert systems or risk heat maps.   

Most companies need skilled people to handle multiple channels and variable market characteristics.   

Digitization will play a vital role in the complex Future of supply chain management. Techniques like NLP, genAI, and deep learning will be used to analyze complex variables quickly, such as MRO inveigle.   

I also feel that the digital transformation of the supply chain will make it more cost-effective. But there will be a lot of factors that will increase costs, too.   

Supply chain resilience will be another factor to be worried about. The labor shortage will impact SCM in the US. Hiking pot costs will have the same effect, too.   

I take a deep dive into these issues and more in this article.    

Steps to Supply Chain Leadership  

Steps to Supply Chain Leadership  

Influential supply chain leaders encourage their teams to collaborate. They also inspire team members to share their workload and expertise.   

Building Foundational Capabilities 

Building Foundational Capabilities 

Many companies need foundational capabilities. Some of the foundational capabilities are empowering employees, supply vendors, and partners. Here, I have discussed a few SCM approaches to developing foundational capabilities.   

Creating a data-driven supply chain strategy  

You can make your supply chain data-driven in many ways. But I suggest you use those tools that interpret product information from multiple production points.   

Some US-based companies like Uber, Coca-Cola, and Google have a data dive supply chain. Experts say that Neo4j is the leading global platform for graph data. They use Google Cloud technology.   

Many US-based companies use this technology to drive their data-driven supply chain.   

 Conducting supply chain diagnostics  

Diagnostics is essential for many reasons. Most importantly, it helps find the relevance of your SCM strategies to supply and demand needs.   

For instance, you must first evaluate the financial performance of the existing SCM procedure. Secondly, you can determine the benchmarking practices in the supply chain.   

Identifying use cases for value generation  

We can take the example of Schneider Electric for example. This company does not rely on siloed change processes. However, they set up a collective campaign called “The Zero Carbon Project”.   

Before the end of 2022, all suppliers reduced their carbon footprint by 10%. As a result, the entire supply chain became more resilient.  

Developing digital ways of working  

Many companies use digitalization throughout their operations. But how does it benefit your supply chain? Let’s take an example.  

Colgate Palmolive has one of the most technically sound SCMs. They partnered with NASA to explore consumer products that are mainly used.   

They will access NASA’s data center and algorithms to test consumer data.   

This data will be absorbed at different supply chain points to make it agile.  

Developing a Digital Ecosystem 

Developing a Digital Ecosystem 

Most disruptive and transforming companies should use a digital ecosystem.   

Collaborating with internal and external stakeholders  

 Most companies with a diverse product portfolio need a strong bond between internal and external stakeholders. For example, warehouse employees must communicate inventory health to suppliers and vendors quickly.   

Implementing digital channels for collaboration and visibility  

Speaking of collaboration and visibility, we must mention PepsiCo. This company is a leader in advanced SCM technology. They use digital-twins technology, AI, and big data to anticipate issues in their vast production repertoire.   

This technology helps the production franchises of PepsiCo to report any issue in real-time.  

Aggregating data for 360º visibility  

To improve collaboration, PepsiCo uses data aggregation. Any supply chain partner can access and interpret the issues that the production department is facing.   

For example, if a plant’s pipeline flow is less, all plants will get alerts to check their respective flow rate. This is how the Future of Supply Chain Management will change.   

Continual Innovation 

Continual Innovation 

To drive continuous innovation, you need a better system for decision intelligence.   

Building a decision intelligence system  

Top companies like Oracle, IBM, TCS, Intel, and others develop decision intelligence systems. Many companies use these systems to explore supply chain issues in real-time.   

 Using AI and ML for data analysis and decision-making  

The use of AI in the supply chain is a futuristic technology. PepsiCo already uses this technology in its supply chain. But how?  

Simply put, PepsiCo uses AI in its manufacturing to send automated supply and inventory orders. As a result, the time taken for interaction between the production and inventory teams is reduced.   

Ensuring a resilient and sustainable supply chain  

Digitization solves the common problems that a company faces in its supply chain. It also paves the way for continual improvement. It reduces manual effort and increases the scope of real-time reporting of supply chain issues. As a result, the supply chain becomes more sustainable.   

Key Success Factors for Future Supply Chain  

Key Success Factors for Future Supply Chain  

To drive successful SCM, you need strong digitization. It would help if you also had more resilient SCM approaches. At the same time, you need to reduce the SCM cost.   

Digitization 

Digitization 

Digitization is the fundamental need for better SCM.   

Importance of becoming supply chain leaders  

In the Future, the SC leaders must be more resilient in setting SCM targets. For instance, future supply chains must drive more resilient goals.   

Experts say that there are some major grey areas in this regard. About 43% of leaders need to be clearer about the performance of their Tier 1 suppliers. Again, 62% of the leaders suffer from the labor shortage challenge in their supply chain.   

Digitization can play a vital role in the Future of Supply Chain Management to optimize these gaps.  

Investment in AI and machine learning for agile decision-making  

KPMG reports that Generative AI will redefine supply chains in the future. It can sync logistics with procurement without manual interference.   

So, supply chain leaders must check their dashboards for interactive reports, suggestive procurement decision leads, and many more.   

Resilience 

Resilience 

The Future of Supply Chain Management depends on quickly responding to flexible planning and better demand forecasting.   

Comprehensive transformation program for network, product design, and sourcing  

The Future of Supply Chain Management will witness many AI-based changes. These are:  

  • Automatic detection of SCM tools for cost optimization  
  • Automatically selecting the best modeling tools and suitable vendors  
  • Modelling changes in the supply chain automatically  

Essential component of ESG and net zero commitments  

The main component of ESG in supply chains is reducing carbon footprint. That’s why you must trust companies like PepsiCo. They can use their AI modules to detect most carbon-emitting sources. They can also plan better AI-driven steps to optimize emissions the future of supply chain management.

Cost Optimization 

Cost Optimization 

To reduce supply chain costs, you must improve inventory control, reduce inefficiencies, and bail out all repetitive processes.  

 Supply chain as a significant cost driver in capex-heavy industries  

In capex-heavy companies, you can make the most changes to the supply chain.   

For evidence, generative AI can increase the speed and efficiency of production in the industrial production sector. The same applies to the US FMCG sector.   

You can bring down the costs by reducing errors and increasing the production rate using AI.  

Potential for value creation through transformation  

I believe that technology can create maximum value in SCM. And the leading technology in this regard is IoT. By 2030, there will be more than 25.4 billion IoT-connected devices.   

As a result, you can ensure:   

  • Better warehouse management  
  • Fleet tracking with AI  
  • AI-based inventory control  
  • Easier maintenance   

Continual innovation for a disruptive-resistant supply chain  

Continual innovation for a disruptive-resistant supply chain  

 In Future, most supply chains will have:  

  • Better calculations   
  • Better order processing  
  • Higher communication  

So it will be easier to have a more flexible contingency plan. Supply chain leaders can easily detect disruptions in the Future of Supply Chain Management. The process of addressing disruptions throughout the supply chain will become easier as well.   

ESG Commitments 

ESG Commitments 

Most companies will try to reduce the carbon footprint of their supply chain. IKEA and Unilever are some companies that already have set net-zero targets.   

However, all global companies have to take a leading role in meeting ESG agendas.   

Shift from “nice to have” to “must have” in the supply chain  

  Having a “net zero goal” in SCM was fancy in the last decade. But the Future of the supply chain must make some severe commitments:   

  • Shifting away from the use of fossil fuels   
  • Increased transparency and more vital collaboration across the supply chain through AI  
  • Monitoring emission rates throughout the supply chain.   

Advanced Robotics & Automation 

Advanced Robotics & Automation 

We all know that automation will play a decisive role in the Future of Supply Chain Management.   

Increasing automation in supply chain tasks  

There are many contact points in supply chains where robotics will be practical. But how will such a future in supply chain management benefit businesses?  

First, robotics can send automated alerts and monitor the customer’s essential demand signals.   

As a result, the teams can adapt faster.   

Secondly, it will help your procurement team to order products faster. The efficiency rate of order processing and delivery rate will also increase.     

Collaboration between humans and robots for efficiency  

The standard and monotonous task can be automated. For instance, robots can scan barcodes of each product and send it across specific conveyors. So, the Future of Supply Chain Management depends on building a blended workforce for supply chain optimization.  

Wrapping up…….  

The supply chains of the Future should be more environmentally friendly. All global SCM leaders should focus on ESG goals. However, the role of robotics in Future of Supply Chain Management will be indispensable.   

Robots will do the chunk of repetitive tasks. At the same time, you can indulge AI to do brainstorming and design thinking.  

As a result, communication, data sharing, and opinion flow across the supply chain will be better. 

tags

business Supply Chain Leadership Supply Chain Management

Ankita Tripathy loves to write about food and the Hallyu Wave in particular. During her free time, she enjoys looking at the sky or reading books while sipping a cup of hot coffee. Her favourite niches are food, music, lifestyle, travel, and Korean Pop music and drama.

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