Decades ago, when buzzwords like Artificial Intelligence, Machine Learning, and Digital Transformation were only in their infancy, Supply chains were planned manually and no data was captured at all. However, these buzzwords are starting to get meaningful in practice and that causes a lot of questions for current supply chain management employees. Let us take a deep dive into how these buzzwords come to practice in supply chain planning, how that affects employees, and what the future developments are.
The biggest evaluation of supply chains is now taking place. Previously, the multibillion-dollar company SAP was the largest supplier of supply chain planning systems. However, SAP’s software developments did not go as planned and nowadays, other companies like o9 Solutions, Blue Yonder, and Kinaxis are taking more share in the supply chain planning industry. The big difference? The platforms of the competition are way more advanced and accurate because of the application of the buzzwords. By creating a so-called “Digital Twin”, the platforms can mimic and simulate a whole supply chain. Companies like Walmart, Starbucks, and Nestlé for example chose for o9 Solutions because the AI/ML-driven platform showed how their product flows throughout the supply chain, offers solutions for supply chain constraints, and predicted demand better then what they have seen ever before.
Then there is sustainability, which is on the agenda of every large enterprise. Imagine how much more sustainable the world will become if both the supply and demand planning accuracy will be 90% instead of 65%. No more high inventories, no more huge amounts of waste, and therefore less CO2 caused by overproduction. So if the digital transformation is for the good, why are there only a few companies changing sofar? The answer is as always in the people.
Supply and demand planners are frightened of their positions since they can not outcompete the systems driven by AI/ML. However, the jobs do not disappear but actually, change in a way that the jobs of planners become even more important and valuable. Their responsibilities change to learning how to collaborate with a system that is so accurate and well-connected with data sources, that they will need to keep track of the platform’s suggestions and communicate the actions to be done towards the operators within the supply chain.
The biggest challenge for the future will not be about technological opportunities, and neither about sustainable supply chains, but about the people who need to leverage the technology. As there is a lot of opportunities to change, it will be the C-level managers who need to eventually transform the way of looking at their supply chains. The technology will continue to disrupt with endless scale due to the cloud, new technologies like the graph cube, and more. Let this be an eyeopener to every supply chain manager and up! As far as the developments state, supply chain management is evolving to a business with higher efficiency, faster implementation, and less waste. Let’s embrace the buzzwords by bringing them to practice because they cause disruption wherever they go!
Sources
https://www.gartner.com/en/documents/3970838/hype-cycle-for-supply-chain-planning-technologies-2019
https://www.forbes.com/sites/forbestechcouncil/2020/04/02/what-is-the-future-of-supply-chain-management/#59abec6053cc
https://home.kpmg/xx/en/home/services/advisory/management-consulting/optimize-your-sector-operations/future-supply-chain/supply-chain-as-a-service.html
https://www.mckinsey.com/business-functions/operations/our-insights/supply-chain-recovery-in-coronavirus-times-plan-for-now-and-the-future
https://www.scmr.com/article/the_supply_chain_planner_of_the_future
