Top 5 Supply Chain Innovations of the Century So Far
Supply chains thrive on innovation and the 21st century has so far seen tremendous advances in logistics technology, both in terms of information systems and physical solutions for storage and transportation.
It’s always beneficial for supply chain professionals to keep abreast of these developments, and with that in mind, we thought we’d publish a quick rundown of what we consider to be some of the most promising supply chain innovations of the century so far.
So here are our top five innovations which although numbered for convenience, are not ranked, since each offers amazing potential for the future of supply chain management.
1. Driverless Freight Shuttle System
Picture this scenario…
In the median of a busy highway, concrete pylons march away into the distance. A marked absence of heavy trucks on that highway contrasts with the activity taking place above, where a track acts as a conduit for an endless stream of shipping containers and road-going trailers, all piggyback-riding aboard near silent, driverless shuttles.
As futuristic an image as that may be, it could be reality within the next three years, if only on a test basis. The Texas Transportation Institute has developed a prototype driverless shuttle that runs on electricity and can carry containers or trailers on an elevated rail.
Designed to cover distances of up to 1,000 kilometres, the Freight Shuttle System (FSS) is intended to bridge the gap between road and rail freight transportation.
If you want to know a little bit more about the FSS, which may make a huge future contribution to carbon reduction and highway decongestion, you’ll find a great little article on the Material Handling and Logistics website, documenting the shuttle’s recent debut in Texas and providing some straightforward technical details about this cutting-edge transportation system.
2. 3D Printing
Taking heavy vehicles off our highways would certainly have a huge impact on the way supply chains operate, but other innovations could entirely change the way they are designed.
Additive manufacturing using 3D printing technology is already transforming some industry supply chains, particularly in the manufacture and assembly of aircraft, for instance.
As 3D printing technology continues to improve, it’s expected to penetrate the consumer demand economy, and in many sectors could turn the conventional “plan, source, make, deliver” supply chain on its head.
That’s the essence of an article published by IndustryWeek, which explains more about 3D printing in the demand economy and essentially warns companies against complacency in an age of increasing consumer control.
3. Supply Chain Analytics
The first two innovations we’ve looked at are still emerging and will not be mainstream supply chain features for a while yet. But some 21st century technologies have matured rapidly to become all but essential for supply chain success. One such technology is data analytics, at least in its descriptive capacity.
Image Source: Gartner
While predictive and prescriptive analytics may not yet be ready for the mainstream, the ability to analyse and understand what has happened (and what is happening) is now a critical factor in supply chain success. Yet just a few years ago detailed analytic evaluation was the preserve of data scientists and inaccessible to all but the largest enterprises.
Of course the big data journey is really just beginning in the supply chain, but as a recent Forbes Insights report points out, the ball is well and truly rolling.
Indeed, the few companies that can currently be classed as leading users of analytics are seeing hard financial benefits. That suggests a high likelihood that graduation from descriptive, through predictive, to prescriptive analytics and data-driven action is one that enterprises will increasingly seek to achieve sooner rather than later.
4. Drone Technology
It’s always hard to resist the temptation to make puns about cargo drones and whether they will “take off”, but one thing that can’t be denied is this… They haven’t disappeared into obscurity.
In fact, while drones’ future as last-mile delivery vehicles is still far from secure, unmanned aerial vehicles (UAVs) are already in active logistics service, although their value and utility still flies mostly under the radar (see, it happened again!).
Aside from Amazon and Google’s dogged investment in drone programs, there are plenty of other UAV trials taking place around the globe, including those conducted here at home by Australia Post. Meanwhile, in Germany and Iceland, delivery drones are already operational, albeit on a limited basis, and in New Zealand, Domino’s has successfully made pizza deliveries by UAV.
The biggest hurdles in the way of mainstream drone logistics include limitations to the weight and size of payload, safety concerns and airspace regulations, none of which are likely to prove insurmountable as time goes by.
Amazon is working hard to address the latter, having already put forward proposals to divide low-level airspace into segments designated as drone corridors.
In fact, issues of legislature and fears over drone safety and security are doing nothing to dull the Bezos empires’ belief in drones as the future of last-mile delivery. You can learn about Amazon’s latest take on drone deliveries in an article published recently over at Logistics Viewpoints.
5. Cloud Computing Technology
If we really had to rank our top five supply chain innovations, cloud technology would probably have pride of place as number one on the list. No other innovation has emerged and matured so quickly to make measurably beneficial impacts on supply chain management.
What cloud computing has done for supply chain management—which no technology could previously achieve—is to provide a single version of the truth across not just one enterprise, but many.
It also enables real-time visibility into processes and performance. These are vital prerequisites for transition from the traditional to the agile, responsive supply chains necessary in today’s globalised, consumer-driven environment. Indeed, as the graph below illustrates, agility and responsiveness are the top drivers for companies adopting cloud technology.
Image Source: KPMG – Journey to the Cloud, The Creative CIO Agenda
Global supply chain Executive Abir Thakurta elaborates sagely on these benefits in his article Taking your Supply Chain to the Cloud published on the CIOReview website, in which he explains how cloud technology has enabled important changes in the supply chain information model.
Are You Keeping an Eye on Supply Chain Innovation?
Innovation is key to a competitive supply chain, and some of the technologies listed in our top five are already making a huge difference to companies that have adopted and embraced them. Others are not likely to generate huge impacts in the short term, but no doubt their time will come.
While you might not be concerning yourself with drones or freight shuttle systems just yet, innovations sometimes have a habit of taking the world by surprise.
That’s why we like to raise awareness of the latest innovative trends from time to time and why as a supply chain professional or student of SCM, you should keep your eye on emerging technologies and solutions—however futuristic they might appear to be.