Supply chain management is the study of how different departments or organizations work together to provide the end consumer with a product or service. A supply chain includes all of the sourcing, transportation, and production elements of a business. As a whole, supply chain management takes a deep look at how these disparate parts of the chain communicate with each other.
Successful supply chain management seeks to improve efficiency by eliminating physical workflow obstacles to create a more effective process. In today’s ever-changing business environment, new technologies and consumer preferences are bringing fundamental changes to the way supply chains operate. There are several trends managers need to be aware of that are shaping supply chain management and creating a new supply chain paradigm.
Supply Chain Management Trends In 2016
Cloud storage services have revolutionized project management and collaboration in every area of business, and the addition of cloud services for supply chain management is an essential next step. Cloud services can help remove physical limitations on data access, leading to improved communication, decision making, and analysis for managers at every step of the production chain.
Internet Of Things
The Internet of Things (IoT) networks physical items with a set of sensors, which then provides essential data to managers for decision-making. Adding the IoT to supply chain management processes can enable companies to address supply chain issues in ways that were previously impossible. For example, tracking technology can help companies to adjust shipping routes in real-time, saving time and fuel costs on deliveries, or receiving a forewarning about potential material shortages can allow companies to find alternative solutions. The increased availability of real-time data will enable companies to become more flexible and adaptable within their supply chains.
Augmented reality superimposes computer models over a person’s physical surroundings, typically through a wearable glass display. Decreased costs for the hardware and more readily available software are making augmented reality accessible for companies.
The augmented reality technology has multiple applications in supply chain management, most notably in order picking and path optimization. Augmented reality can significantly reduce the amount of time warehouse workers spend finding and sorting through products to pick an order.
The glasses guide them through space along the most efficient path, helping eliminate much of the pen and paper work traditionally required for order picking. The next development in augmented reality is expected to be HUD style overlays for fleet vehicles, which will use real-time driving and traffic data to calculate the optimal route for deliveries.
Today’s consumers demand multi-channel retail access to their favorite brands and products. They enjoy the convenience of shopping online, but they still appreciate the immediacy of shopping in brick and mortar locations. The evolution of multi-channel sourcing for consumers creates a logistical issue for supply chain managers.
The biggest area of concern for supply chain management in multi-channel sourcing is where the inventory should be located. Inventory location affects almost every other issue along the supply chain, from shipping networks to managing in-store inventory. In 2016, supply chain managers will work to reduce costs by improving the efficiency of distribution, especially the cost of moving products from the distribution center to the store. To keep up with evolving customer demands, supply chain managers will also need to evaluate their blended distribution systems, where customers order online and pickup items in-store.
Though most of the discussion about supply chain management involves improving product development or delivery efficiencies, customer demands for sustainability are also shaping supply chain management for many companies. Modern consumers are more environmentally conscious and look for companies who use sustainable resources and act in a socially responsible way.
Locally sourced produce and organic food options contribute to a sustainable supply chain and act as a sign of goodwill for consumers. Companies in other industries will need to explore alternative production methods, such as investing in recycling technology to enhance the sustainability of their current supply chains. Early adopters of the sustainability movement have found sustainable supply chains more efficient and cost-effective than some older models, which has helped to drive the movement forward.
Companies that can adapt their supply chain management to reflect these trends in technology and consumer demand can yield stronger, more stable supply chains. It is important for supply chain managers to stay up to date with these growing trends, as well as to continue building on their skill sets to help implement these changes where possible within their organizations.
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The Importance of Supply Chain Management, Council of Supply Chain Management Professionals
Reimagining the 10 Megatrends That Will Revolutionize Supply Chain Logistics, Transportation Journal
How the internet of things will streamline the supply chain, The Chartered Institute of Procurement and Supply Link
The Mandate for Multichannel Retail Evaluating Supply Chain Models, Strategyand.pwc.com
Building Bridges: Toward Alternative Theory of Sustainable Supply Chain Management, Wiley Online Library