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Regular Industry Development Updates, Opinions and Talking Points relating to Manufacturing, the Supply Chain and Logistics.

Four Predictions for Supply Chain Operations to Kick Off 2018

16-Jan-2018
Four Predictions for Supply Chain Operations to Kick Off 2018
For years there has been an ongoing debate in the supply chain industry as to whether technology is, or should, be a competitive advantage. That debate may well be over. For 65% of the respondents to a recent Gartner survey of supply chain professionals, the answer is yes.

We’re now at a point where technology innovation — from artificial intelligence to blockchain — is intertwined with supply chain management (SCM) strategy and operations. This means SCM is on its way to becoming technology-centric, as opposed to simply technology-enabled.

There is no doubt that deploying innovative technology can improve efficiency and customer service, and can help raise maturity and transform supply chains. Gartner has created a five-stage logistics maturity model against which supply chain and logistics leaders can measure their organization’s maturity. Ninety percent of companies operating at stages four or five maturity levels outperform their peers, and many are considered industry leaders.

Autonomous mobile robots are coming
By 2021, one in 10 warehouse workers in established economies will be replaced by autonomous mobile robots (AMRs).

AMRs offer innovative, intelligent platforms to replace the “dumb” automated guide vehicles used in warehouses and factories since the 1950s. Driven by cost and labour challenges in Europe, Japan and North America, the shift to AMRs is expected to lower warehouse costs and complexities. Today’s AMRs do not have lift capacity, which currently limits adoption. However, as they add lift and become even more autonomous and intelligent, they will transform warehouse operations.

AMRs are coming, even if your business is not ready for wholesale adoption, it is well worth should be monitoring the market, speaking to early adopters, and acquiring test units to gain hands-on knowledge.

Many artificial intelligence (AI) initiatives will stall
By 2021, three out of five factory-level AI initiatives in large global companies will stall due to inadequate skill sets.

The hype around AI – and more specifically its promise to do more with less - has made it a critical initiative for manufacturers. Although some AI eliminates basic human tasks, other components are highly cognitive and need support from employees with specialist capabilities. Examples of such capabilities include content curation or data ingestion. The talent pool for these types of skills is extremely limited, meaning that the pressure is on manufacturers to develop the required skills. If they don’t, the success of factory AI products will be hampered.

To prevent this situation from happening, manufacturers should develop a knowledge management system that maximises human potential and redefine the data science skills required for manufacturing operations.

Blockchain initiatives will remain proof of concept
Through 2020, 90% of supply chain blockchain initiatives will be proof-of-concept initiatives.

While supply chain interest in “blockchain” grows, the required technology has not yet been fully developed. What has emerged in its place are multiple pilots and proofs of concept across the supply chain in various industries, geographies and product categories. It is likely that supply chain blockchain initiatives will remain concepts unless significant barriers are overcome, including business ecosystems, business rules and governance, and layers of physical and digital authentication.

Organizations shouldn’t be plunging into blockchain without a thorough assessment of the capabilities, practical applications and value-add blockchain can deliver to their supply chain.

Virtual customer assistants make a mark in customer service
By 2021, 20% of all customer service interactions will be handled by virtual customer assistants and chatbots.

Presently, virtual customer assistants (VCAs) and chatbots handle 2% of customer service interactions. In four years this will increase to 10 times as much. Virtual agents will also be more empathetic, understanding, and able to manage high-volume complex interactions without human referral. We can expect to see this transformation as early as 2018, when industry leaders such as Amazon, IBM and Salesforce introduce a new, general-purpose conversational AI platform into the market. It will offer organisations a genuine alternative to human agents that is cheaper and faster to deploy than what is currently available.

With this in mind, it is certainly worth companies exploring the capabilities of VCAs to understand the use cases and benefits that conversational AI platforms can bring to a customer service offering.

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