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BizReport : Internet : October 25, 2018

Why No One Can Agree Where the Supply Chain Is Headed

Despite a well-documented and well-understood path of development that's led us to this moment in the history of the supply chain, experts can't agree where we're headed in the future--making it difficult for companies to anticipate and prepare for the inevitable changes to come.

The supply chain, and supply chain management, are responsible for billions of dollars of transactions and economic movement worldwide. As an industry, it's constantly evolving thanks to new technologies, emerging sources of materials and production, and new philosophies on how to approach these logistics. But despite a well-documented and well-understood path of development that's led us to this moment in the history of the supply chain, experts can't agree where we're headed in the future--making it difficult for companies to anticipate and prepare for the inevitable changes to come.

Why are there such discrepancies in predictions regarding the supply chain, and are there any ways to consolidate these conflicting visions?

What We Know for Sure

It's much easier to predict developments in the supply chain for the short-term future than it is to make a guess at the long-term future, due to the proximity of the technology and the path taken by existing companies. For example, we know that the following technologies are going to play a major role in how the supply chain evolves in the next decade or so:

- Artificial intelligence (AI). AI is already rearing its head in supply chain management, fueling the data processing algorithms we need to understand how our logistics are flowing, and in some cases, automating key functions within the supply chain.

- The internet of things (IoT). We're also seeing the budding emergence of IoT technology, in the form of RFIDs that track the movements of assets from one area to another, portable devices that make employees' jobs easier, and other integrations designed to automate workflows and improve accuracy on the floor.

- Predictive analytics algorithms. Finally, we're seeing leaders invest more into predictive analytics algorithms, which have the power to use historical data to make guesses about the future. Ironically, these algorithms can't predict which technologies may emerge next.

But what about the long-term future for these technologies, and developments beyond them?

Contradicting Visions

Experts hold opposing views on the following topics:

- The role of technology. Tech is certain to play a role in shaping the supply chain of the future, but experts disagree on how big that role may be, and how it might impact current employees. Some argue that technology will continue to automate human tasks until the field is practically jobless--or at least relegated to designing and improving tech systems rather than handling their previous roles. Others suggest that the human element will continue to be a central part of supply chain management, with technology continuing to be a secondary tool.

- Locations and sources. Experts also disagree about where the supply chain will move in physical space. Some suggest that cities with abandoned industrial infrastructure will become host to more ventures, including fulfillment centers for massive distributors and new distribution-focused startups. Others suggest that pockets of the developing world will begin to flourish and completely change how materials are routed.

- Sustainability. There's also the sustainability question. Modern supply chain managers frequently operate with sustainability in mind--in other words, they specifically create routes and implement processes designed to work in the long-term. But with many supply chain managers reluctant to make the transition for fear of sacrificing productivity, it's uncertain whether sustainability will be a universally defining trait for supply chains in the future.

Why the Future Is So Hard to Predict

So why can't there be a clear consensus on these issues?

- Pace of development. Technology has emerged rapidly for the past 50 years or so, but with Moore's Law at its end and significant challenges ahead for AI, IoT, predictive analytics, and other breakthrough technologies, it's hard to say how quickly we'll see technology emerge in the future--let alone what that technology could look like.

- Speed of adoption. Even assuming we see a consistent stream of new tech to make the supply chain faster and more efficient, there's no guarantee supply chain managers will be willing to adopt them. Managers can be reluctant to change, even in the face of long-term improvements.

- Economics. It costs money to change systems and adopt new technologies, and investing in new areas is always a bit of a gamble. Economics rely on too many factors to be sufficiently predictable, making it hard to chart the expansion of the supply chain globally.

No matter how hard we try, we may never get a clear consensus on what the future of the supply chain will look like--at least until those future events and changes come to pass. In the meantime, the best we can do is leave room for flexibility and adaptation in our own supply chain management approaches, so we can respond to those changes as they arise, rather than locking ourselves into a single-minded system.


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