Meeting today’s distribution challenges

Supply Chain Management Technology report

This article is brought to you by Retail Technology Review: Meeting today’s distribution challenges.

RetailTechnologyReview.com spoke with leading representatives from the vendor and analyst community about many of the current constraints and solutions within the world of supply chain management. 

The current big themes and trends for supply chain management are certainly varied and span everything from managing increased logistics costs and addressing bottlenecks to handling capacity constraints and creating greater agility in today’s post-pandemic realities. 

In the view of David Krebs, executive vice president enterprise mobility & the connected worker, VDC Research, and Richa Gupta, consultant AutoID & Data Capture, VDC Research, one of the biggest buzz phrases over the past two years has been supply chain resilience and therefore the need to implement solutions that provide greater real-time visibility into operations that can be shared with trading partners. “This in turn is creating vast amounts of data, so we are seeing greater demand for AI-supported SCM and for edge compute/processing capabilities to create architectural efficiencies,” they explain. Krebs and Gupta also point out that this is driving greater demand for more sophisticated data capture solutions, including solutions that support serialisation. 

The growth of RFID 

Krebs and Gupta add that while line-of-sight barcode technology remains the de facto ID choice, they are seeing growing adoption of RFID and also RFID in combination with sensor-based solutions including temperature, impact and location. Krebs and Gupta are also seeing a growing commitment from supply chain management solution providers and operators around ESG strategies and finding opportunities to reduce their footprint. “Supply chain waste is a huge issue, and we are seeing a greater focus around identifying and quantifying where waste occurs so it can more effectively get addressed,” they say. 

In terms of the main drivers for these trends, Krebs and Gupta cite the need for more resiliency and flexibility in times of supply chain uncertainty and the importance of effective supply chain management in the wake of the pandemic and Brexit.

They also reference the impact geopolitical events such as the war in Ukraine can have on supply chains. “What ultimately is happening as a confluence of these issues is that there is greater attention directed towards supply chain operations,” they explain. “Supply chain operations/performance has become more mainstream, all the way up to the boardroom.

Organisations are dedicating more resources and budge to modernise their operations and identify opportunities to driver great automation – especially as labour costs continue to increase and availability continues to be a challenge for many. That said, labour remains critical to supply chain operations so making labour more efficient and investing in solutions that not only improve labour productivity but also empower labour has been a point of emphasis.” 

Volatile geopolitical conditions

Zoe Jackson, vice-president and head of automotive and manufacturing growth, Capgemini UK, reflects that, traditionally, supply chains have been challenged by factors such as global inflation, high working capital, poor data quality and complexity of product portfolios. Jackson considers that these issues continue, but she believes they are being compounded by a new set of challenges that dictate how supply chains are set up, planned and operated.

These, she says, include volatile geopolitical conditions, connected consumers who expect instant choice and hyper personalisation, omni-channel sales via ecommerce and sustainability and CO2 emissions targets. According to Jackson, to adapt to this landscape the future supply chain needs to be:

• Resilient – proactively identifying and mitigated risk factors, integrating planning and operations and establishing an ecosystem of partners.
• Sustainable – integrating circular practices and bringing end to end traceability to product and material flows. Organisations should also encourage collaboration with suppliers and cross-enterprise synergies.
• Integrated – via a connected partner ecosystem to provide end to end visibility, deploying harmonised performance management and incentives. Cybersecurity is increasingly important, along with anticipating evolving worldwide regulations.
• Consumer-focused and agile – differentiating service offerings, whilst enriching and personalising the customer journey throughout the product lifecycle. Focus on improving forecasting accuracy to reduce order fulfilment time and anticipate customer needs.
• Efficient – touchless processes can be enabled by big and small technologies and routine activities can be automated. Data-driven activities can be centralised for scale and efficiency, with automated decision-making.

In terms of the main drivers for these changes and trends, Jackson makes the point that the manufacturing supply chain is currently being influenced by geopolitical conditions such as the ongoing conflict in Ukraine. “The sanctions placed on Russia by governments around the world has restricted access to many natural resources,” she says. Jackson adds that a second aspect on the geopolitical stage stems from Brexit, with bi-lateral arrangements being few and far between, leading to increased border controls and tariffs far in excess of what was in place before.

A further driver of change, according to Jackson, derives from the aftermath of COVID-19, with an increasing reliance on technology across multiple channels having since transferred to the boardroom where executives are seeking to become more connect throughout their value chains.

Finally, Jackson believes we have to turn to our existential climate challenge. “As a focus for all engagements that Capgemini pursues, we know that this issue presents a major problem for our clients in terms of not only how they manage their own Co2 footprint, but also that of their supply chain to drive total emissions to net-zero,” she says. 

Jackson adds that theses drivers underpin the need for increased resilience within the supply chain. “The need for flexibility to be able to overcome these challenges and meet demand poses some of the most significant problems for our clients today,” she maintains. 

Technology disruption 

Gopal R, global leader supply chain and logistics advisory, Frost & Sullivan, considers that there is currently much discussion regarding technology disruption. “Of course, supply chain-related technology had existed in the pre-COVID world, but the implications of the technology post COVID have been quite different in the sense that accelerated adoption is now very significant,” he says.

Gopal believes the reason for this is prior to 2020 companies saw technology as an option. “It was often considered to be a tool for differentiation,” he says. “Now, in a post COVID environment it's no longer a differentiation between the haves and the have-nots, companies now really need some basic elements of technology to operate efficiently. Standards have grown post COVID. In transportation, as a vendor you might offer a solution that provides 24/7 tracking of cargo. However, this is now taken for granted so you need to offer something more.” 

Now, more companies are talking about trying to be more resilient, according to Gopal. “This is because they've realised that the disruptions or the shocks in the supply chain have been so significant that there is a need to build a more resilient supply chain,” he says. “Consequently, companies are diversifying their supply chains – for example, looking for suppliers from territories other than China. We now often hear the phrase ‘China +1’. The +1 in question could be from South-East Asia, India, Latin America or the Middle East. In essence, companies just want to make sure they have hedged their supplier network.”

In addition to resiliency and China +1, Gopal makes the point that we are now hearing more about digitisation. “The choice of digitisation on the whole used to be very different in a pre-COVID environment,” he says. “Now, people are realising technology is available in a cost-effective manner and there are many more tools available.” Additionally, Gopal observes there is now a strong emphasis on sustainability initiatives in logistics. “So, decarbonisation and looking to make the supply chain loop more circular than linear are common themes,” he says. 

Gopal also highlights that we are hearing more about near shoring within the context of manufacturing and supply chains. However, as a concept he doesn’t believe this trend is mainly because of the current state of geopolitics or post COVID factors. “In reality, near shoring has largely been a product of nationalism,” he says. “For example, many countries in the Middle East are driving localisation programmes and that's the genesis of near shoring. As oil prices came down in the UAE, people started looking at boosting other forms of local production and consequently the export of other businesses.

They wanted to be more industrial in a way that ensures their GDP becomes less and less dependent on oil. Indeed, this is a practice being adopted by many countries globally. The US, for example, wanted to reduce its dependency on China's produce, so it brought things back. It’s a similar scenario in Europe. Near shoring is really about concentrating more on local opportunities, boosting local produce and looking to ensure that the GDP contribution from industry sectors in these countries becomes higher.”  

From a software perspective, Gopal makes the point that many of the traditional on-premise user licences have always been relatively expensive. However, he states that users can now benefit from similar functionality on a SaaS platform for around $250 per month. Aside from the affordability aspect, Gopal says another advantage is that users don't need to worry about upgrading or improving the technology. “Somebody else's will do that at the back end,” he explains. “If users continue to rely on an on-premise solution, they’re probably stuck with the current version for six or seven months, or even a year or more. They’re not keeping pace with the changing technology.” 

Within the transportation segment of the supply chain, Gopal observes that there are innovations concerning making ports smarter, ensuring there is greater visibility in the logistics space. Additionally, Gopal is watching the development and deployment of automation via, for example, autonomous vehicles and other tools, and even the inclusion of robotics within automation technology. “There’s also a need for more predictive analysis rather than reactive,” he says, adding that AI and blockchain are becoming more mainstream, including within the cyber security realm. “The increase in cyberattacks means more secure systems are needed,” he says. 

Managing the ‘pandemic hangover’ 

Bryan Ball, vice president and group director, supply chain, ERP and GSM research practices, Aberdeen Strategy & Research, highlights the need for collaboration among departments and potentially all levels of management in order to keep processes such as sales & operations planning (S&OP) running as smoothly as they can in what he refers to a ‘post-COVID hangover’ environment. 

Ball makes the point that the main purpose of S&OP is to have a supply and demand match. “You don't want an imbalance,” he says. “If you’re making more goods than you’re selling you’re going to build inventory because you’re tying up cash.” Secondly, Ball explains that companies need to keep an eye on their capacity to realise when they have to buy more equipment, hire more people or add a second or third shipment and so on. However, further to this, he maintains they need to be looking 6 to 9 months ahead or even further.

“This is why S&OP meetings are important,” he stresses, adding that these meetings should have every relevant person in the room, from schedulers and planners to business personnel and the bosses. “These meetings are the best way to ensure you’re looking far enough ahead with the best all-round knowledge as to what to expect so you don’t run into issues that could have been better anticipated and prepared for,” he says. 

Ball makes the point that personnel from management need to be involved too because, for example, if there is a requirement for a new machine to meet demand, they need to approve the outlay. Similarly, he explains that if a machine goes down and it’s going to take four months to source replacement parts from another country, management need to be aware of this and be part of the discussion as to what alternative production options are available in the meantime. “There are a million things that could crop up, so actions need to be taken based on a fully rounded discussion with all the right people in the meeting room,” he says. 

Ball believes the value of this collaborative business and operational approach is all the key decisionmakers are jointly listening to how things are faring on the supply end as well as hearing from the sales team and the marketing team. “For example, they could share news that a main competitor has just ceased to trade and may be about to declare bankruptcy or whatever the issue might be,” he says. “Everybody involved needs to be aware of all these supply and demand issues.” 

Ball reflects that, as a process, S&OP worked fine and more predictably for many companies before COVID hit. “Things were running smoothly for many companies, and some felt as if they could pretty much run on automatic. Markets were booming, demand was steady and supply requirements were largely predictable. Even when the pandemic started to have an impact, I don’t think many good companies lost control of the processes altogether.

However, whereas maybe the boss didn’t need to be in the room when everything was running smoothly because many of the processes and supply demands were largely predictable and under control, when the turmoil of COVID really kicked in everyone needed to be involved, from management to planning, scheduling, supply, operations, sales and marketing. On all sides of the supply chain fence, people really needed to be part of the discussion and needed to pay close attention to what was going on.” 

Ball makes the point that hardly an S&OP meeting takes place where something new and important isn’t brought up. He explains that someone may have decided to launch a promotion and received the go-ahead, but not everybody was informed. “Or maybe a supplier went on strike, a piece of equipment went down or the company’s having trouble hiring people to satisfy demand on the second shift. These things need to be addressed and they can have an impact on different groups within the organisation in terms of how they can adapt their own processes or realise they can help in some way.” 

Supply chain visibility 

Ball adds that supply chain visibility is in need of improvement within many companies, including financial information, all the way back to the suppliers, knowing if they are pushing deliveries out or if they are having trouble meeting schedules. “So, the importance of supply chain visibility is important upstream on the demand end, but also on the execution side. Once a product starts to move you want visibility of the longest tailed supplier all the way back to ports of China, for example.” 

If things seem to be running smoothly and there's no obvious disruptions and no direct evidence related to the pandemic hangover, then all might seem fine. However, Ball believes the longer-term effects of the pandemic hangover haven’t gone away yet. Therefore, he maintains that companies still need to be as prepared as they can be for the unexpected. 

Intelligence and responsiveness 

Gartner research finds the top three business priorities for supply chain professionals are increasing productivity, improving resiliency and fostering innovation. Christian Titze, VP analyst with Gartner's Supply Chain practice, explains that although cost and labour pressures remain, leading supply chain organisations are maximising their organisational performance by investing in technologies that can engage employees, improve asset utilisation and make operations more intelligent and responsive.

Titze adds that internal and external supply chain challenges, such as network complexity, inflation and cost volatility, as well as leadership issues and the need to retain talent, are forcing supply chain organisations to reassess their IT portfolios. “Supply chain IT leaders have the opportunity to lay a stronger foundation by reimagining core architectural elements of their portfolios,” he says. “This will allow them to scale business and respond to challenges quickly while maintaining high performance levels.”

Titze also makes the point that advancements in technology provide supply chain technology leaders and other executives an opportunity to support new business models, enhance decision making and improve integration with trading partners. “This is causing supply chain organisations to fund new initiatives focused on digitising asset tracking and management, supporting digital supply chain transformation, improving user experience through technology, and reskilling and upskilling their workforces,” he explains. 

In terms of some of the motivating factors to invest in supply chain technology, Titze cites as examples: the desire to better support new business or operating models, the aim to enhance decision-making processes. 

Workforce resourcing 

Philip Jarrett, commercial director, Dakota Integrated Solutions, considers that one current concern within the supply chain world is workforce resourcing. “Many companies now are struggling to retain their existing personnel because workers can seek salaries that are now more favourable than they’ve ever been,” he says. “Therefore, many companies find it difficult to employ and retain the right calibre of staff. However, a key mechanism to enable staff retention is technology.

Many supply chain companies are KPI driven and if they have the right technology their staff will be able to earn good money, enjoy greater job satisfaction and stay with the company over the longer term. If companies don’t have the right technology and are behind the curve, their workers will be more likely to leave and go elsewhere.”

Jarrett adds that workers who leave due to their employer not having the right technology will likely seek higher-paid employment with the big retailers and fulfilment centres in distribution hubs often in remote areas. “The dominance of these large hubs can suck the life out of surrounding businesses that used to have warehouse operatives happy to earn minimum wage,” he says. “Many workers are no longer willing to accept that type of salary anymore. In the South-East, for example, the struggle to recruit and retain staff is a major issue. However, technology such as voice-enabled pick-and-replenish solutions can be the answer.” 

According to Jarrett, if providers of these types of solutions, such as Dakota, can increase a company’s productivity by 25 to 30%, then if it employs 100 personnel in the warehouse and it loses 25 to one of the big sheds, then it is still going to achieve the same level of output. “So, this type of technology can not only improve a company’s efficiency and accuracy levels in the warehouse, it can also provide a little bit of insulation for those companies through the fact that they have that technology that can keep up fulfilment and throughput even with less staff,” he says. 

Jarrett adds that technology can also help people on the shop floor. “If you give them the right tools to do the job it increases their satisfaction levels,” he says. “Also, because the technology can substantially enhance their productivity and accuracy levels, their pay packet at the end of their working month can also be increased – and as a consequence of the improvements offered by the technology the companies can become more profitable too.” 

Another current key talking point within the world of supply chain management, according to Jarrett, is the ever-shrinking window of supply. “Consumers within retail and even companies within B2B have wanted goods delivered by the next day for some time now, but now we are increasingly wanting things today or even this morning,” he says. “So, there is now a need to have the right technology to enable companies to future proof their business and also make them as optimised as possible to get products out the door quicker than they’ve ever done before.” 

Jarrett adds that we all recognise the e-commerce driver behind that 24-hour window and have accepted this as a given for some time. “We are now looking at 12-hour windows – for example, within the flower industry,” he says. “This will increasingly become the norm in other market segments too. So, to achieve this, companies need the right technology and the right processes and workflows in place to deliver what the customer expects in today's marketplace. There is now an even bigger speed expectation from the customer waiting to sign on the device screen once his or her parcel has been delivered.” 

The impact of lost mobile devices 

Adrian Lawson, managing director, Waizu, considers that one of the prevailing constraints within supply chain, warehousing and manufacturing and retail is that of lost mobile devices, which can result in lost productivity, idle work time and ultimately monetary loss and goods not being delivered to the end customer on time.

“Research from Zebra Technologies shows that organisations lose between 12% and 15% of their mobile device estate every year,” he points out. “Also, the operational overhead per single shift in issuing out and receiving back shared devices in a typical organisation represents at least 50% of the typical device cost every single year.”

Although established device management (MDM) solutions have been available for some time, Lawson makes the point that the asset management issues around lost or mislaid devices often still aren’t being solved. “If you are part of an IT department with responsibilities for IT-related functions it's a critical tool to be able to lock a device down, provide some security, enrolment and all the other key things that an MDM does,” he says. “However, the audience that looks after the devices every day is not necessarily IT focused.

Whether in manufacturing or supply chain, when you go into a shared warehouse and you see operations running on a day-to-day basis it's not IT people in that office issuing devices and checking them. The people managing this process are likely to work in operations: the DC manager, operations manager, service delivery and so on. So, there are different personas, and some personas might not even know what an MDM is.” 

Lawson explains that this is the type of issue that spurred Waizu to develop Device Finder, which is specifically focused on finding lost devices, preventing devices from being lost in the first instance and proactively letting a customer know if there's a lost device. Waizu has also added features around the device check-in and checkout process so users can sign a device out on the screen of device. “This replaces that manual check-in and checkout process in the security office or gatehouse,” says Lawson. 

He adds that these solutions are proving to be increasingly popular and proving to save companies time and money. They are becoming even more widely deployed through our recently announced partnership with managed service provider Dakota Dakota Integrated Solutions Ltd, which is now promoting and selling the entire Waizu software suite, including the Device Finder software application, the Virtual Smart Cabinet and the Waizu Analytics Platform. 

Optimisation in the age of omnichannel 

Alex MacPherson, director of solution consultancy and account management at Manhattan Associates, reflects on the importance of transport and distribution systems in today’s modern supply chain and retail landscape, and considers how retail technology needs to align with customer needs.

“Technology is changing the way every industry does business by helping to create efficiencies, save money, and provide customers with better products and services,” he says. “Retail businesses are no different and, especially in a post-pandemic world, it is clear that retailers need to continue to adapt and adopt new technologies to stay ahead of their competitors and in-step with their customers.

Technology, today, is helping to play a crucial role in shifting and shaping how consumers think about their experience with a particular retail brand and, in certain cases, even helps define the very brand itself. At the heart of this new technologically driven shopping experience lies data. If retailers can’t access and use data effectively across all sections of an organisation, including fulfilment and delivery, then how can they really improve and optimise their supply chains or the overall sales and customer experience?”

MacPherson believes modern demands on supply chain organisations within retail have exceeded the ability of yesterday’s traditional, portfolio-based supply chain solutions. “These traditionally created artificial boundaries between distribution and transportation capabilities and limited productivity and adaptability,” he says. “Today, a reliable and robust supply chain eliminates these barriers by merging viewing, planning, optimising and executing supply chain tasks into a single application for retailers to benefit from.

What is more, with traditional supply chain solutions, transportation, distribution planning and execution processes are performed independently. By unifying distribution and transportation, supply chains can unlock new levels of agility and responsiveness within operations, providing retailers with a blend of visibility and control across all supply chain operations like never before.”

MacPherson explains that advancements like this mean employees managing deliveries can do everything they need from one application in order to do their job well, from drilling down into labour productivity and robotic performance, to responding to real-time shipment alerts and re-broadcasting capacity needs in order to change carriers quickly and easily. “This approach, for example, lets retailers navigate seamlessly through shipments they are managing, or they can view the real-time status of an order.

Further, as retailers comb through associated data gathered from these various, now, joined-up systems, they are then able to take action on this information. This is because in-line operational analytics is built directly into these modern execution systems. Which means retailers can quickly make informed data-driven decisions that benefit the customer.” 

Reshoring 

MacPherson also cites re-shoring as a key current supply chain-related trend. He makes the point that the main reasons tens of thousands of North American and European organisations decided to offshore significant business operations overseas during the past four decades have included increased flexibility, access to larger workforces and reduced operational expenses.

“Whilst offshoring gathered significant pace during the 1990s, it has maintained its popularity into the 21st Century and even accelerated over the past decade as price became the driving differentiator for many brands,” he says. “However, with the supply chain challenges that have followed in the wake of the global pandemic, and further disruption causes by geopolitical events such as the ware in Ukraine, some of the less positive aspects associated with offshoring have come to light.” 

As a result, MacPherson observes that many companies are considering the benefits of moving their manufacturing and supply chain functions closer to consumers in an attempt to guard against the inevitability of future market volatility. “The expansive global supply chains that had gained prominence since the turn of the millennium have undoubtedly brought cost efficiencies. However, they have also introduced a level of fragility which, until recent events, was not entirely tangible.  

MacPherson considers that as the global pandemic put these sprawling networks under pressure, cracks in processes and underlying strategies became apparent, and as this happened, the realisation gave way to a growing idea that maybe, the era of offshoring was coming to an end; replaced by a new ideological and practical approach where networks, processes and ultimately goods, should be located closer to the end-user. “Where price was once the defining factor for brands, the disruption that followed the beginning of the pandemic shifted emphasis towards resilience, reliability and agility, not to mention other softer imperatives such as sustainability,” he says. “After all, it doesn’t matter how low a cost a product can be produced if it can’t get to the intended market or customer in a cost-effective and sustainable manner.

By moving supply chains closer to consumers, brands can achieve these new goals. Take inventory and distribution as an example: using stores as mini fulfilment hubs, deploying dark store sites and creating hyper-local micro-fulfilment centres are all approaches to fulfilment that could mitigate against single points of failures inherent in sprawling supply chains. By moving product delivery (and potential returns too), closer to the consumer it puts a premium on inventory visibility, but it comes with an added bonus in terms of environmental impact.” 

MacPherson adds that with a smart transportation management solution in place for more local distribution hubs, shorter, more sustainable routes can be planned for deliveries and returns collections can be incorporated into these same routes too. “With the ongoing popularity of e-commerce and growing numbers of returns, the cost and environmental benefits of moving goods and supply chains closer to consumers are tangible, providing you have the right technology in place to deliver it effectively,” he says. “Simply ‘onshoring’ manufacturing and moving supply chain processes closer to consumers is not enough in itself, however. The ‘Eureka moment’ for brands can only be achieved by a marriage of theory and practice.” 

Greener supply chains 

MacPherson also highlights that there is a strong emphasis from increasing numbers of consumers (driven primarily by the Gen Z demographic) on sustainability and ‘green’ credentials. Combined, these trends and challenges are creating the perfect stage for what Manhattan Associates refers to as supply chain commerce.

MacPherson makes the point that while supply chains underpin globalisation, capitalism and consumerism they can also be primary causes of the current climate emergency. However, he states that the right technology can empower and enable companies to offer their consumers options that are more informed and greener at every stage of the purchasing process. This technology, he explains, can be operational from the moment a person clicks on a buy-now button, to a more-efficient packing process that reduces shipping volumes, to optimised transportation routing that reduces travel miles, trucks on the road and planes in the air.

The end results, states MacPherson, are reduced CO2 emissions, improved customer experiences and greater alignment with consumer sentiments. “Unifying every element of purchasing, from warehouse and transportation, to commerce, and fulfilment, makes this all possible,” he says, adding that supply chain commerce offers capitalism an opportunity to take a different path. MacPherson believes it represents a chance for capitalism to become a catalyst for a greener, more sustainable future where consumer expectations and the health of our planet can coexist. 

Integration 

Have ways of best integrating SCM with other systems developed to any notable degree over the past year or two? Krebs and Gupta don’t consider changes in this regard to have been particularly notable. What they are seeing on the mobile side, however, is the development of native mobile capabilities in some of the leading WMS, TMS, ERP solutions. “As the mobile market has migrated to Android we are seeing ISVs build out those capabilities in part to help customers migrate their legacy mobile solutions,” they say. 

Titze considers that with the emergence of ‘composability’ the availability and degree of utilisation of APIs have helped to achieve better integration. “Driven by the broad shift to cloud services, APIs now dominate mainstream application design and integration,” he says. “Mainstream organisations’ growing expertise in managing API-centric architectures is a precursor for the step up to composable architecture’s modularity of business capabilities.” Titze adds that the growing demand for productivity in application engineering, the fast proliferation of SaaS as the preferred form of application delivery and the frequent formation of fusion teams at mainstream organisations have all pushed low-code/no-code engineering platforms to wider adoption. 

Jackson states that the need for lean and agile processes have increased operational and fixed costs imbedded within the supply chain supported by high inflationary elements. She considers that, as a result, companies are putting a large focus on supply chain technology integration.

• Data capture solutions: Real Time Location Systems (RTLS) enabling real time tracking and movements of objects in large indoor facilities. Leveraging RF technologies and wireless devices delivering actionable location data that can be used to visualise the location of key personnel, assets, vital equipment on a live, indoor map or integrated into automated workflows or IoT-enabled applications, asset and supply chain management solutions.
• Voice and wearables: Benefits of the hands-free, task capture nature of these technologies, improved voice recognition technologies using cloud technology for workers using different languages. Improved hardware options with vest devices with built in speakers and microphones eliminating the need for headsets. Wearable scanners in gloves allows workers to focus on materials handling tasks.
• Use of drones: Self-flying drones with on-board imagers to read barcodes and perform inventory counts autonomously. These drones can automate inventory counting tasks, increased frequency and accuracy, leading to fewer unexpected issues.
• ERP Personalisation: AI-based conversational user interfaces such as chatbots, which interpret user voice or text input and respond to questions using order information stored within the ERP.
• ERP AI-powered insights and improvements: Artificial intelligence and machine learning embedded into ERP systems to help meet increased demand for personalisation and improve a range of business processes.
• Smart forklifts and automated vehicles: Smart Forklifts and Automated Vehicles have the ability to place the goods on their designated shelves and also pick the assigned items from their allotted spaces for deliveries. Reducing the need for human resources and manual assistance, increasing productivity. 

Software as a Service 

Jackson observes that the ability of manufacturing businesses to adopt and adapt Software as a Service (SaaS) is influenced by multiple factors including strategy, culture, legacy, approach to future of work, relationships, IT infrastructure and digital capability. According to Jackson, SaaS’s advantages include:

• Scalability – flexibility to quickly scale up/down access to applications based on business need in potentially volatile market conditions; operational efficiencies can be quickly realised.
• Sustainability and cost – less software and hardware management as well as reduce maintenance and operational costs yield both lower overheads and a more sustainable approach to manufacturing.
• Mobility – SaaS promotes worker mobility with real-time access to software and data on demand, aligning with the varying demands of hybrid working.
• Accessibility – SaaS makes machine learning and AI accessible to businesses where previously it was out of reach, thereby acting as an enabler for smart factories and Industry 4.0
• Interoperability – cloud-based interconnection between applications is readily available, mitigating issues typically experienced across traditional manufacturer-vendor relationships.

Its disadvantages, in Jackson’s view, include:

• Security and data – access to and management of sensitive data as well as related security protocols via cloud hosted services could be a concern for manufacturing businesses.
• Lack of control – in house managed software and hardware gives businesses a higher degree of control and tailoring compared to a third-party provider. Upgrades cannot be deferred, and features may be limited.
• Connectivity – if Internet connectivity either fails or is inaccessible, software and data cannot be accessed by workers regardless of whether they are mobile- or site-based.
• Performance – with software not hosted locally, latency and slower speeds may be experienced by users versus on-site hosted applications.
• Limited applications – there is still a limited range of applications that offer a hosted platform; hybrid software hosting solutions may be required by businesses to offer the required range of ITcapabilities.

Krebs and Gupta consider that Platform as a Service (PaaS) – and especially cloud-hosted development platforms – are gaining in popularity across a number of sectors as organisations want to leverage their internal developers and a ready to use cloud-hosted platform. In addition, they add that most of the leading SCM ISVs are evolving their cloud and SaaS offerings as their customers look to upgrade their applications. “However, in comparison to other enterprise applications/system of record, supply chain management generally lags when it comes to PaaS and SaaS adoption,” they add. 

Titze believes supply chain integration services elevate the role of integration from a tactical, execution-centric and technical view of system interoperability to a strategy-led vision of a more-interconnected world. “Interoperability is both internal between a heterogenous portfolio of application and technologies as well as external, with a growing ecosystem of trading partners,” he says. “Historically, integration was viewed as exclusively an IT issue, and it was approached purely from a technical perspective. Supply chain integration services encompass technology platforms, integration teams, strategic decision making on which applications to connect when and how (different Integration strategies), and finally, cloud services to manage these integrations.” 

Artificial intelligence and machine learning 

Titze makes the point that artificial intelligence (AI) leverages computers and machines to mimic the problem-solving and decision-making capabilities of humans. “As a starting point, AI augments decision making where humans are still in the loop to validate and monitor system behavior and then develop into actionable AI,” he explains. “Actionable AI then allows for model behaviour change after deployment by learning behavioural patterns from past human and machine experience to adapt more quickly to changing, real-world circumstances autonomously. Actionable AI targets numerous supply chain use cases where it can adapt, evolve and learn based on how humans engage with the solutions. This adaptability is supported by supply chain planning to supply chain execution.” 

Titze adds that drastic disruptions in increasingly unpredictable environments have significant impacts on supply chain organisations. “For many of them, these changes demand resilience by design and actionable AI by definition,” he says. “Therefore, decision making is an increasingly complex core capability. Decisions are becoming more connected, more contextual and more continuous, so decision making must be re-engineered as part of building actionable, often automated systems in the future that allow organisations to leverage data for insights, decisions and strategic actions. The value of actionable AI lies in the ability to rapidly develop, deploy, adapt and maintain AI across different use cases in the supply chain organisation. Given the engineering complexity and demand for faster time to market and rapid return on investment, it is critical to build adaptability into AI models.” 

Jackson considers that over recent years, supply chains have become more and more challenging to manage. “Complexities of product portfolios are increasing; market disruptions continue through global pandemics and the need for agility and flexibility is evermore rising to meet customer expectations and experiences,” she says. “These elements have increased operational and fixed costs imbedded within the supply chain supported by high inflationary elements. As a result, companies are putting a large focus on their supply chains with artificial intelligence (AI) and machine learning (ML) based supply chain solutions being an enabler to such challenges.”

In Jackson’s view, a connected and integrated end-to-end approach can address the opportunities and constraints of all business functions. AI and ML supply chain solutions give the ability for corporations to: 

• Enhance procurement: AI and ML technology bring greater transparency to legacy costs with existing suppliers in the ecosystem. AI tools can identify best-performing carriers and partners, understand inventory requirements, and stabilise the best available rates at the current market and economic conditions.
• Planning: Business are empowering planners to make fast, confident data-driven decisions by combining human intelligence with artificial intelligence and concurrent planning tools and methodologies.
• Optimise inventory management: AI and ML tools can provide accurate insights into inventory and operational processes and handle quantities of goods more efficiently. It can also enable smooth management of ever-changing stock levels through the increased levels of fluctuating demand.
• Analyse transportation and logistics: As operational costs continue to rise and negatively impact shipping capacity; manufacturers must look to overcome these obstacles. AI and ML can analyse large data quantities and provide intelligence on how to secure the most optimal logistics and transportation avenues available at the time.

Jackson adds that AI and ML give the opportunity for companies to increase the overall resiliency of their supply chain: “An integrated and connected end-to-end approach can provide full transparency and collaboration through large volumes of data, provide visibility into operations and support better decision making at all nodes of the value chain,” she says. 

Mobility solutions 

Are mobility solutions such as mobile computers and tablet PCs etc. having an impact or influence on SCM? Jackson reflects that as technology developments advance, and interaction experiences between technology and humans become ever more seamless, many corporations have adopted mobile devices and tablets to increase their supply chain efficiency. Jackson makes the point that tablet PCs and other mobile devices have enabled operations at each major node of the supply chain, allowing individuals to perform their tasks more efficiently and effectively:

• Warehouses and DCs: Warehouse workers can complete jobs faster through technology such as barcode scanners and wireless communication. The seamless integration of mobile devices and technology platforms enable instant updates of data to ERP and WMS systems. Tablets can also be more affordable than fixed computers and systems on the warehouse floor.
• Manufacturing: Engineers and plant managers can use tablets and mobile devices to review product, operation and maintenance information as they need. Mobility solutions using such technology allow the collaboration of many functions: Supply chain, manufacturing, engineering, quality etc.
• Transportation: Transportation operations of goods to warehouses, manufacturing sites and end consumers can be enabled through mobile devices through increased convenience of the user. These devices can provide GPS and telematics capabilities, as well as being tools to scan packages, manage schedules and update transport details on a real time basis.

What to look out for 

What might be the next innovations and developments to look out for in the world of SCM software over the next year or two? Krebs and Gupta believe future trends will be largely centered around AI and predictive analytics to support greater operational visibility, and the ability to operate with greater agility and make real time decisions at scale. 

Jackson makes the point that supply chain leaders across industries are focused on maintaining service levels through mitigating risk and managing disruption whilst battling to keep on top of escalating material costs. “Software offerings are evolving in line with these challenges,” she says. “Supplier collaboration portals, intelligent planning tools and control towers have been around for a time and are developing rapidly as user-friendly, bolt-on capabilities that provide supply chain teams with relevant and timely information to support decision making.” 

Jackson adds that manufacturers should expect to be using AI and automation more and more and be ready to take advantage of cloud-hosted, subscription-based software to focus on their specific supply chain challenges, including resilience, visibility, scenario modelling and ‘what-if’ planning. Jackson believes manufacturers should also be looking to use software as the enabler for improving information flows and communicating change through the supply chain, with methods such as model-based systems engineering allowing more efficient design and manufacture. Titze cites multi-agent orchestration platforms, logistics platform business models, last-mile delivery and the industrial metaverse as being some of the technology themes to watch over the coming year or two.

Jarrett believes machine learning, AI, robotics and even drones will continue to come to the fore over the next year or two within warehouses and DCs. “This also ties in with the issue of staff resourcing,” he says. “It can be difficult to recruit people with the right skillsets. It’s all about ensuring companies have enough resources to drive efficiencies to keep to the specified lead time, increase customer satisfaction boost their bottom line.” 

Lawson reflects that the issue of lost or mislaid mobile devices in the workspace won’t go away. “However, more companies are becoming aware of the benefits of today’s device monitoring and management solutions such as Waizu’s “Device Finder,” he says. “This can only bode well for more business benefiting from improved asset management and increased productivity.”