The future of Supply Chain Management: What can we expect?

When we talk about the evolution of Supply Chain Management, the question about the future of it always comes to our minds demanding an answer. Of course, most part of the predictions may be speculative (read, for example, this article about some SCM trends for the next ten years), but all of them are interesting and help us to draw a detailed picture of the future of production, logistics and industry itself.

Perhaps it’s easier to predict the future of Supply Chain Management than to precise the way they are going to be implemented. In a fully enabled scenario, the supply chains of the future are expected to function with close coordination between business processes, and, in consequence, partner networks will operate as virtual organizations.

However, it is not a secret that the distribution chains of the future will certainly have to deal with a progressive, turbulent and uncertain environment. Mega trends, such as climate change global resources scarceness, artificial intelligence will be responsible for that. Our current kind of supply chain, that connects the world in the way it does, would have been unthinkable in the past, and maybe the predictions made in latter centuries were not so accurate when we compare them with how things are right now. It is hard to imagine what would they have thought about Internet, satellites and robotics.

The truth is that the supply chain of the future will be very different than what we may think. What we can do is to wonder. There are researches going on with the aim of teleporting matter from one point of space to another. 3D printing is making huge steps that will bring a revolution in the world of production that no one saw coming. Just imagine the possibility of moving products through cyberspace, such as machinery parts from a plant in Japan to a Canadian factory. Immaterial pieces, software, ideas, becoming real and touchable thanks to technology. That’s not impossible.

Of course, in twenty years the modes to transport goods will be still trucks, trains, ships and airplanes; very much the same of what we have right now. Nevertheless, there will be differences, because the level of precision of such means of transport will be almost molecular. The supply chain of the future will not be so different, but in 2033 its visibility will be extraordinary. The most important goods and resources will be information.

We are already approaching that level of transparency, but in the future, thanks to a much more pervasive labeling of each product in shipments it will be possible that thanks to tiny built-in sensors managers achieve an unprecedented degree of monitoring and real-time location.

Producción_logistics_supply chain management_david kiger
Image courtesy of Brainco Social Media at Flickr.com

David Kiger, the chief executive officer of Worldwide Express, believes that thanks to the marvelous advances experienced by technology, very complex innovations have been produced, and they are changing and will change completely the supply chain we have known to date. Of course, says Kiger, the users that will benefit first from these new developments will probably seek to achieve more improvements in efficiency and performance, which, according to the logics of today’s production, might be difficult to understand.

In order to develop competitive advantages for the future, manufacturers have adopted a strategy of tying products within integrated offers, such as “power by the hour” system. The core offer is complemented by a package which consists of a combination of services, tailored to customer requirements: financing, maintenance and repair, for example. Instead of selling such services separately, and with high profitability, now the manufacturer has the incentive to control all costs and the revenues are fixed in contracts. Consequently, final assemblers seek to hire based on the capabilities of its suppliers.

These developments open up a new challenge for the future supply chains. The need to integrate processes across the supply chain, with a synchronized flow between each stage is becoming more attainable thanks to advances in IT and the use of Internet. Not only the manufacturing process needs to be integrated: they require stages of distribution and retail.

If we think about what it should be, and not about what it might be, some people think that the current strategies of the supply chain should be reevaluated. Their initiatives, phases, development and future processes should be restructured completely and become much more intelligent and resilient in times of unprecedented instability. The reason of this is because the supply chains of the future will know unprecedented levels of collaboration, as suppliers, manufacturers, distributors, will not be the only ones who interact in the chain. Even materials and products can communicate in real time and make decisions without any human intervention.

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