As a year comes to a close, it’s always interesting to look at past trends and make predictions for the coming year. For instance, it seems 2018 will be a year of transition for the supply chain, as digital transformation continues to gain ground.
“The supply chain is undergoing almost unparalleled levels of change. The older measures—productivity, quality and service—still apply of course, but we now see the specter of digital transformation poised to change everything,” says Simon Ellis, program vice president, Global Supply Chain Strategies, IDC. “Whether it’s the way manufacturers and retailers plan, procure or fulfil, digital transformation is both opening up new opportunities, and presenting new challenges. Business leaders who recognize the real impact of digital technologies on their industry, customers, partners, suppliers, functions and business practices stand to gain substantial advantage over their competitors.”
Indeed, in a recent report Ellis and Victoria Brown, Research Manager, global supply chain execution at IDC, explain that digital transformation is the key overriding theme in their worldwide supply chain top 10 predictions for 2018—including the impact for supply chain planning, supply chain execution/fulfillment, procurement and supply chain security. Although their predictions largely focus on the near term to midterm (2018–2020), the impact of many of these predictions will be felt for years to come. Furthermore, most of the predictions refer to a continuum of change within the wider ecosystem of the supply chain industry and global economy.
So, for example, Ellis and Brown write that by 2020, they expect 60 percent of G2000 manufacturers will rely on digital platforms which enhance their investments in ecosystems and experiences, and support as much as 30 percent of overall revenue.
In the shorter term, I was interested to read Ellis and Brown expect that by the end of 2018, half of all manufacturers will be using analytics, IoT and social collaboration tools to extend the integrated planning process across the entire enterprise, in real time. What’s more, by 2021, they expect 60 percent of manufacturers will leverage an advanced analytics-driven data aggregation platform for supply chain operational data to improve the speed and accuracy of the fulfillment process.
Ellis and Brown make several other predictions as well. Some of them include:
- By 2019, 80 percent of supply chain interactions will happen across cloud-based commerce networks, dramatically improving resiliency and reducing the impact of supply disruptions by up to one-third.
- By the end of 2018, the use of industry clouds, blockchain and cognitive will have dramatically enhanced the understanding of supplier capacities for one-third of manufacturers, enabling the iterative rebalancing of critical supply based on capabilities, rather than units and quantity.
- By 2019, robots will be used in 50 percent of fulfillment centers, resulting in productivity gains of up 30 percent—helping reduce the cost of operations and offsetting an increasing shortage of labor.
- Finally, by the end of 2019, Ellis and Brown expect cybersecurity will have surpassed physical security as a top concern for one-half of all manufacturers, and it will become a top investment priority as companies make the transition to digitally enabled, cognitive supply chains.
What do you think of Ellis and Brown’s predictions? Do you agree with them? Do you have other predictions for the coming year?