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STAMFORD, Conn., September 11, 2017 View All Press Releases

Gartner's Hype Cycle Reveals the Digitalization of the Supply Chain

Analysts Will Explore Supply Chain Trends at the Gartner Supply Chain Executive Conference on 20-21 September 2017, London.

Supply chain organizations must maintain a delicate balance between innovation and operational excellence said Gartner, Inc. This balance hinges upon bimodal supply chains that can improve and run established practices profitably, while introducing new technologies and strategies that lead to competitive advantage.

"We expect several new technologies and strategies to further digitalize organizations by transforming the supply chain," said Noha Tohamy, research vice president and distinguished analyst at Gartner. "In this year’s Hype Cycle (see Figure 1) we’ve picked out several technologies and strategies that should be on the supply chain leader’s radar, as they will reach maturity in the next five years."

Figure 1. Hype Cycle for Supply Chain Strategy, 2017

Source: Gartner (September 2017)

At the Peak
Gartner expects two entries to enter mainstream use in the next two to five years:

Social learning platforms address the large number of long-term employees retiring, capturing their knowledge to share with younger workers in a way that can be scaled across multiple business units and geographies. A more fluid and continuous learning experience that appeals to younger employees has obvious benefits, but chief supply chain officers (CSCOs) should avoid a siloed ‘shadow IT’ approach. Instead, they should integrate social learning within the context of an organization-wide IT program to maximize the benefits, but to be feasible for most organizations will take between two to five years.

Solution-centric supply chains (SCSCs) offer customers a personalized collection of products, data and services from a digitally-enabled ecosystem of partners. It’s an approach seen mainly in high-tech, medical, consumer and industrial sectors at the current time.

In the Trough
In this phase Gartner expects big data to achieve mainstream maturity in the next two to five years.

Some supply chain organizations have piloted big data technologies to use larger datasets, and others are incorporating structured data from external sources or trading partners in areas like collaborative demand fulfillment and supplier performance management.

There is a now a post-hype realization that more data does not necessarily equate to better insights. Today, big data is seen as an enabler, but organizations are focusing on improving analytics and integration to drive big data strategies to productive mainstream use.

On the Slope
There are five technologies on the slope that Gartner expects to mature fully within the next five years.

Supply chain visibility (SCV) and centers of excellence (COEs) are competencies that will soon be standard business practice. SCV is about generating timely, accurate and complete views of plans, events and data across the entire supply chain including external partners. Many organizations currently lack an end-to-end approach to SCV, but as more mature and capable Internet of Things (IoT), data and analytics solutions become available, SCV will head toward mass adoption within two to five years.

A COE develops ways to find, design, develop and implement best practices across the business. While Gartner research indicates that 78 percent of supply chain organizations have one or more COE, there are reasons why the COE still hasn’t reached the plateau. One is that where COEs have been adopted, they often lack structure due to weak mandates, uncertain missions and lack of clear governance and performance metrics. As more organizations advance their expertise, Gartner expects the COE to move to productive mainstream use within two years.

Diagnostic analytics in the supply chain seeks to explain why something — an event or a trend — happened. Diagnostic analytics lags the adoption of descriptive analytics, which has reached the plateau phase of the cycle. This is because diagnostic analytics requires a clear understanding of the intertwined relationships in a supply chain, which must first be provided by descriptive analytics. Improvements in the maturity of analytics solutions are now contributing to wider adoption, as well as the increased availability and integration of real-time data in IoT-enabled supply chains.

Supply chain management (SCM) business process as a service (BPaaS) is an external service that delivers standardized processes through a cloud-sourced technology platform. Examples include compliance and regulatory reporting, freight forwarding, customs processing and aftermarket services.
The time is right for supply chain leaders to monitor the SCM BPaaS market for opportunities to gain incremental capabilities and efficiencies in their organization without needing to license new software or hire new employees.

Targeted supply chain segmentation is a technique used in business for decade. Examples of segmentation include categorizing customers or suppliers as high priority or treating parts or inventory differently based on volume. Gartner expects that within two to five years there will exist a documented consensus approach to targeted supply chain segmentation that will drive mainstream adoption.

Reached the Plateau
Descriptive analytics is the application of analytics to describe what is happening, or has happened. It is the only technology that has reached the plateau of productivity in this Hype Cycle.

While some organizations still use enterprise wide business intelligence tools from other business units like sales or finance, generating reports this way is too time intensive and does not provide the right level of insight in a timely manner.

Descriptive analytics capabilities spanning reporting, dashboards, supply chain visibility, data visualization and alerts are already improving the level of insight for many organizations, meaning mainstream adoption is less than two years away.

"Looking further out than five years, we can even more exciting technologies coming over the horizon," said Ms. Tohamy. "We expect that artificial intelligence, machine learning, corporate social responsibility and cost-to-serve analytics will all drive significant shifts in supply chain strategies within the next decade."

Gartner clients can read full analysis on the technologies in this Hype Cycle in "Hype Cycle for Supply Chain Strategy, 2017." This research is part of the Gartner Trend Insight Report "2017 Hype Cycles Highlight Enterprise and Ecosystem Digital Disruptions." With over 1,800 profiles of technologies, services and disciplines spanning over 100 Hype Cycles focused on a diversity of regions, industries and roles, this Trend Insight Report is designed to help CIOs and IT leaders respond to the opportunities and threats affecting their businesses, take the lead in technology-enabled business innovations and help their organizations define an effective digital business strategy.

To gain valuable external perspective on supply chain, visit SCM World, a cross-industry community of the world’s leading supply chain practitioners. Now a fundamental pillar of Gartner’s supply chain services, the community orchestrates and curates the most innovative strategies, insight, expertise and knowledge from across the SCM World community.

Gartner analysts will provide additional analysis and information on supply chain trends at the Gartner Supply Chain Executive Conferences taking place September 20-21, 2017 in London. You can follow news and updates from the events on Twitter using #GartnerSCC.

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