The Impact New Technologies Have on the Supply Chain
I’d like to bring your attention to the new whitepaper, “New Supply Chain Technology Best Practices: The Application of New Technology in the Physical Supply Chain,” released by the University of Tennessee, Knoxville. It’s one of the most comprehensive whitepapers that explores the pros, cons and overall readiness of the emerging technologies, such as drones and driverless vehicles, to support the increasingly sophisticated supply chain.
As the author, Dr. Paul Dittman noted, this whitepaper offers a peek into an amazing future, and I fully agree with his perspective. The amazing transformations in logistics happening in the past five years have been influenced by advances in technology both on the machine or device side, as well as on the digital side of technology.
All of us supply chain professionals are facing this unprecedented wave of innovation faster than ever. Whether we choose to be on the leading edge with these new capabilities or not, I strongly believe that we need to at least stay up-to-speed with the rapidly moving developments in these fields, assess against our existing capabilities, align with our customer expectations in the future and consider building a roadmap to improve our current capabilities (and offerings) in the future. Doing so can lead to many advantages, including the development of new market capabilities, faster and more profitable response to disruptions and a stronger brand presence.
There’s a quote from Henry Ford that’s sewn into the fabric of modern experience design. It’s simple, super-quotable, and everyone “gets it.” It goes like this: “If I had asked people what they wanted, they would have said faster horses.” Get it?
The whitepaper focuses on five innovative technologies that could greatly impact the supply chain. Below is a summary of what the whitepaper offers. I highly recommend everyone use this whitepaper to navigate and develop your own innovation roadmap.
Supply Chain Innovation
One of the coolest depictions of the practical application of innovation, looking five years out into the horizon, is shown below in Figure 2. Based on discussions with numerous industry experts for the whitepaper, the majority believed robotics would have the most immediate impact on the supply chain. Following robotics, the industry experts listed driverless trucks, followed by drones, then wearable technology and lastly 3-D printing, as shown below.
Trying to estimate the impact of these technologies on supply chains is daunting. Let’s take a deeper look into each new technology to see what’s going on currently and what the future could hold.
Is drone delivery the next step to enhancing customer service? While it may be too earlier to determine, several companies are showcasing a wide range of drone applications for internal use within supply chain operations. Walmart, for example, used a drone to verify inventory in one of its large distribution centers (DCs). The drone reportedly checks the entire one-million-square-foot Walmart facility in a day, as opposed to the month it takes for a human. Another example is UPS and FedEx and how they’re considering a program where a drone will fly from a UPS or FedEx truck to deliver the last few miles.
Many believe that drones will become a major supply chain tool that goes beyond residential delivery. In the near term, however, drones will likely be used more for supply chain visibility.
Robotics applications are inextricably linked to the digital side of innovation. Because of this link, robots can become learning machines that are able to deal with dynamic changes in the environment in an efficient manner. Out of all the new technologies listed in Figure 2, most people interviewed believe robotics is the most advanced today for supply chain application. In fact, some predict that many companies will soon have a robotics department and even a chief robotics officer responsible for defining the robotics strategy and coordinating implementation.
In the coming years, robots will take on many jobs currently executed by humans. The incursion of robots will require more technical skills and less manual labor.
Wearable Technology/Smart Glasses
Smart vision has the opportunity to make a major impact on the supply chain. However, the applications will need to improve and create a compelling business case to be feasible. An example of this is Microsoft hololens, which is a mixed reality (MR) product that’s being used for a range of applications in the supply chain, especially for training in hazardous environments. It can be used to project holograms of unsafe conditions in a DC. Another example is DC pick, pack and ship applications. DC applications are currently very limited and experimental, but with hands-free augmented reality (AR) solutions, such as smart glasses, warehouse pickers can theoretically finish tasks more quickly and efficiently, while reducing mistakes.
Smart glasses have the potential to positively impact the warehouse of the future in many ways. The technology will need to have multiuse capability and make performance of repetitive tasks more efficient and accurate.
Additive Manufacturing/3-D Printing
3-D is used today in many companies for rapid prototyping. But its applications within supply chains are advancing well beyond this daily. The question is how fast will this technology broadly impact the supply chain? Will it be a quick game changer or will it find its way to a broad scale application? The consensus tends to be the latter.
3-D printing technology continues to advance. Current applications generally have some of the following characteristics: Low volume, complex geometrics for assembly, need for faster consumer response and need for customization. An example is how Nike, Adidas and New Balance are all experimenting with printing soles designed specifically for the user. The customer runs on a treadmill and the custom insole is printed in the back room.
It’ll be interesting to see how this technology evolves, and its evolution will be highly dependent on the speed of operation in the 3-D process, the materials that can be used and the overall cost. If significant progress can be made on those challenges, this could result in a supply chain revolution.
Driverless vehicles have continued to make major advances over the past decade. In mid-October 2015, it was reported that Mercedes Benz introduced a production driverless truck. The driverless systems use short and longer-range radar and a camera for detecting lanes and markings. Another recent development includes actual deliveries. An Uber-Otto/Anheuser Busch beer delivery occurred on October 16, 2016, from the Ft. Collins Brewery to Colorado Springs, a 120-mile journey. For most the trip, the driver left his seat and observed from the sleeper cabin.
Driverless trucks may be a lot closer to reality than people realize. Legal issues and government regulations will be the main barriers. Driverless trucks will first appear on the interstates with local drivers doing the first mile and last mile pickups. It’s certain that technology will greatly outpace adoption.
Pursuing Innovation in the Supply Chain
There’s never been a time with so many developments that could immensely impact the supply chain. These technologies have the potential to disrupt the competitive balance among companies. There are huge risks and enormous rewards associated with the coming change and it’s imperative that companies keep up. Try to understand what your competitors are doing, launch a few pilots, attend conferences and tradeshows. The landscape will shift, and it’ll shift quickly. We’re now in a new era of unprecedented advances and business as usual will be fatal.
Learn more about these new technologies and what’s going on now, what the future could hold, the benefits and the barriers that must be overcome in the whitepaper. Download it now.