Submitted on Wed, 2015-06-03
By irms|WM Warehouse Management

Digitization Emerges as Next Big Supply Chain Shift

Digitization is now at the top of the corporate agenda in every industry. The digital business movement was the overarching message from the Gartner Supply Chain Executive Conference this year, weaving its way through keynotes and breakout sessions of supply chain leaders and analysts.

 

“Simply stated, every business unit is a technology start-up. There is a shift of demand and control toward digital business units closer to the customer, where business units, such as the supply chain organization, are taking on more technology spending. In leading organizations, one-quarter of enterprise costs will be devoted to the digital transformation. About 20 percent of that will be allocated directly to supply chain transformation.”
-        Keynote by Peter Sondergaard, Global Head of Research, Gartner


We returned from this event inspired and excited about the future of cloud warehouse management systems. During the show, Gartner also announced its annual 2015 Supply Chain Top 25, an award that highlights the best practices of supply chain leaders.  Digital leader Amazon took the top spot this year, overtaking longtime traditional supply chain powerhouse, McDonalds, proving automation and cloud technology are revolutionizing the industry.

The application of digital technology and its transformation dominated all aspects of this year’s event. Digital technology’s ability to connect people, businesses, and things to drive revenue has led to rapid adoption. This is demonstrated by the fact that 86% of all businesses claim they will be digital within the next 5 years. Here are the top trends that our team identified that will have a significant impact on the supply chain industry shortly:
 

Top 5 Supply Chain Trends for 2015

  1. Big Data:  During his keynote, Gartner Global Head of Research Peter Sondergaard referred to data as “the oil of the 21st century.” Forbes put it into perspective by describing data in and of itself has no value at all. Its value is when it is effectively utilized as part of a process. Once accessed, the most important next steps are managing it and ensuring that it is used in a meaningful way that improves business.
     
  2. Smart Devices: The steady climb of automation in the supply chain is enhancing the workplace. A recent MHI Solutions feature notes that in 2015, robots will not only be streamlining the process and facilities of the supply chain, they’ll be working alongside human co-workers. Automation and Mobile enhance the ability for businesses to produce and distribute products faster, allowing them to be competitive and enjoy stronger growth.
     
  3. The Internet of Things (IoT): While the definition of IoT mystifies some, the value for supply chains is clear. Simply put, the Internet of Things is the concept of connecting any device with an on/off switch to the internet (and/or to each other). Increased connectivity brings increased visibility, proactive issue resolution, enhanced customer experience, end to end collaboration and data – anytime, anywhere. The following stats currently surround IoT, substantiating its impact on business now and in the future:
    • In 2014, 74% of enterprises will have a hybrid Cloud strategy
    • By 2015 there is expected to be 180 billion mobile application downloads
    • By 2017 90% of all internet connections will take place via mobile device
    • Gartner estimates that there will be about 50 billion autonomous connected devices
    • by the year 2020, which is a thirty-fold increase
    • Data is expected to double every year from 2012 to 2020
       
  4. Customer Experience: Third party logistics providers are now expected to understand truly their partners’ supply chains, acting as an extension of it. The trend leans toward a “cradle-to-grave” approach to customers, in that logistics partners provide complete strategic guidance and capabilities from the beginning to the end of the supply chain
     
  5. Regulatory Management/Pharmaceutical Traceability: Stricter product tracing requirements will start this year as reported by the Healthcare Distribution Management Association,  leading to the establishment of a single system of federal electronic, unit-level traceability requirements across the entire supply chain.The Drug Supply Chain Security Act (DSCSA) was enacted on November 27, 2013 and made mandatory the acceptance of “3T” information (Transaction History, Transaction Statement, and Transaction Information). The goal of the DSCSA is to implement enhanced security and accountability for prescription drugs throughout the U.S. pharmaceutical supply chain, with phased-in obligations for the various “trading partners” over the next 10 years. 

 

Catch up on our Cloud WMS Budget Series:

  1. How to Budget for a New Warehouse Management System
  2. How Your Budget Predicts Your Revenue Potential
  3. 3 Questions to Ask Before Finalizing Your WMS Budget
  4. What Costs Are You Forgetting to Add Into Your Cloud WMS Budget?
  5. Don’t Be Fooled by Fake Cloud WMS Technology
  6. How to Get Approval for Your WMS Budget

 

Blog Type: 
IRMS WM Blog