New Technology in Supply Chain Management
Streamlining CPG industry operations and meeting consumer demand hinges upon staying abreast of today’s supply chain technology trends. Key to this is developing an understanding of how new technology in the supply chain can improve management and execution.
How technology helps logistics and supply chain management
The impact of technology on supply chain management can take shape in a number of ways, including improving operations by increasing visibility, marrying disparate data sources to detect historical patterns, and enabling companies to more proactively anticipate potential challenges. The right tech investments can also foster more streamlined collaboration to improve data and information sharing for additional benefits of technology in supply chain management.
Eighty-three percent of organizations plan to invest in ecosystem-enabling technologies in the next three years, according to Gartner, including such technologies as multi-enterprise collaboration platforms, supply chain planning platforms, and blockchain.
What are the new technologies impacting supply chain management
There are a number of new technologies garnering attention when it comes to their ability to impact a CPG company’s supply chain.
“Big data and supply chain analytics will be key in helping businesses create efficiencies, lower costs, enhance customer service, and boost overall performance,” says Douglas Kent, EVP of strategy and alliances for the Association for Supply Chain Management (ASCM). “Data and analytics tools are especially important right now as supply chains remain volatile and unpredictable — in-depth forecasting can help mitigate disruption-related risks.
The increased use of artificial intelligence and machine learning are also reshaping and improving supply chains, he says. “In a warehouse setting, for example, AI-enabled technologies or ‘cobots’ can take over manual burdens, increasing worker productivity and safety, while reducing overhead costs. Overall, we’ll see automated tools permeate a range of industries from retail and transportation to logistics to perform problem-solving tasks.”
Ara Surenian, VP product management at Plex by Rockwell Automation, echoes this, noting that with the advent of machine learning, being able to take contextual information into consideration makes industry forecasts much more dynamic, comprehensive, and accurate.
“Leveraging [machine learning] to analyze heaps of historical data is a new approach to demand forecasting. As such, CPG manufacturers already operating on thin margins may be skeptical of the new technology and strategy,” he says. “However, companies that deploy [machine learning] for inventory management and forecasting will see nearly immediate measurable benefits. Especially in times of uncertainty, achieving even a 1% improvement in accuracy allows for higher levels of service to customers because manufacturers can confidently meet shifting volume and timeline demands.
Interestingly, John Harmon, senior analyst at Coresight Research, notes that some manufacturers are adding older-generation manufacturing equipment, adding, “Leading edge factories are adding capacity and constantly developing smaller feature sizes, which means more chips on a wafer.”
What technologies are reinventing the supply chain?
“Technology that focuses on predictive analytics and historical sales analysis will be very important in the coming years,” says Mike Graziano, consumer products senior analyst with RSM US.
Implementing these tools provide management with better visibility into their core consumer and their product needs, and they also enable CPG companies to evaluate historical sales results and ensure products can reach the right consumer at the right time.
How does blockchain technology impact supply chain performance?
Gartner cites blockchain as a promising technology for supply chain ecosystem management thanks to its potential for broad collaboration while enabling partners to define the scope of such collaboration through data access rights.
“A few years ago, blockchain seemed like a solution looking for a problem, positioned squarely on the Peak of Inflated Expectations on the Gartner Hype Cycle for Supply Chain Strategy,” notes the research firm. “Since then, early adopters continued to experiment with the technology to understand its fit in targeted supply chain use cases.”
Sourav Banerjee, Infosys SVP and industry head, consumer retail and logistics, says blockchain technology is being explored to enhance transparency and traceability in supply chains. “It's particularly valuable for industries where tracking the origin and authenticity of products is essential, such as food and luxury goods,” he notes.
How is blockchain used in supply chain? (Examples)
There are a number of consumer goods companies that are trialing the use of blockchain (or have tried it in the past) in their supply chains, most commonly for traceability. Here are a few blockchain in supply chain examples.
Unilever has utilized blockchain technology to enhance traceability and transparency in its worldwide palm oil supply chain. Considering that 90% of the globe's raw materials are traded in bulk, there's a significant chance that verified materials may become mixed with unverified ones, leading to concealed or lost information throughout the supply chain. To mitigate this risk, the CPG employs blockchain to record commodity information, such as the production conditions and the biodiversity levels in the region, and to disseminate these details throughout the supply chain on a large scale.
Deoleo collaborated with IBM for its Bertolli and Carapelli brands, utilizing IBM’s Food Trust blockchain-based QR code technology. When scanned, consumers can trace the olive oil's journey to confirm its origin and quality.
Fresh Del Monte Produce invested in a startup known as Decapolis with the goal of enhancing food traceability using blockchain technology. As with some of these other examples, this new supply chain technology also employs QR codes and blockchain to provide detailed insights into every stage of production, from planting to purchase. By scanning a QR code, consumers and distributors can access a complete record of product information, including assessments throughout the production process. Del Monte Produce seeks to certify end-to-end traceability and improve food safety and quality assurance with this technology.
What are 3 emerging supply chain technologies?
Future technology in supply chain in supply chain can be exciting, and John Harmon, Senior Analyst at Coresight Research, offered several emerging technologies worth keeping an eye on for improving performance:
Artificial intelligence: “AI, especially generative AI, is at the tip of everyone's tongue, and an army of companies are developing new platforms and applications.”
5G: “5G wireless networks have been turned on, and vendors are still coming up with new applications. 5G enables a much larger number of devices to be connected to the Internet.”
Micro-LED: “For consumer electronics. technologies like foldable and micro-LED displays are promising. I think Apple's upcoming adoption of USB-C on its smartphones (and likely Airpods) will be good for consumers and sustainability since we all will be able to carry fewer cables.”
What’s more, the electrification of automobiles turns them into consumer products, unlocking new avenues for in-vehicle entertainment and connectivity, he says.
How will mobile connectivity drive change in a supply chain?
The ability to use technology and data integrations across the globe will continue to drive massive increases in the efficiency and resiliency of the supply chain according to Dustin Verdin, executive director of business innovation at Zipline.
“When material providers, manufacturers, warehousing, transportation, retailers, end users, and AI/automated systems are always in sync, many of the current challenges we experience today will be resolved in real-time,” he says.