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Gartner Predictions for the Future of Supply Chain Operations in 2018

December 21, 2017

Contributor: Jill Beadle

Adopt and invest in emerging technologies to gain a competitive edge.

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. In a recent Gartner survey of supply chain professionals, 65% said the answer is yes.

Following that, Gartner Predicts 2018: Future of Supply Chain Operations paints a picture of a world 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.

“ By 2021, one in 10 warehouse workers in established economies will be replaced by autonomous mobile robots”

“There is no doubt that deploying innovative technology can improve efficiency and customer service, and can help raise maturity and transform supply chains,” says C. Dwight Klappich, research vice president at Gartner. “For example, 90% of companies operating at stages four or five maturity levels outperform their peers, and many are considered industry leaders.”

Autonomous mobile robots

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 labor 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. As they add lift and become even more autonomous and intelligent, they will transform warehouse operations.

Recommendation: If not ready for wholesale adoption, monitor the market, speak to early adopters and acquire test units to gain hands-on knowledge.

Stalled artificial intelligence (AI) initiatives

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

AI’s promise to do more with less has made it a key initiative for manufacturers. Although some AI eliminates basic human tasks, other components are highly cognitive and require support from employees with specialist capabilities, such as content curation or data ingestion. The pool for this talent is extremely limited, which puts the burden on manufacturers to develop the needed skills. If they don’t, the success of factory AI products will be hampered.

Recommendation: Develop a knowledge management system that maximizes human potential and redefine the data science skills required for manufacturing operations.  

Proof-of-concept blockchain initiatives

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 (POCs) across the supply chain in various industries, geographies and product categories. Until significant barriers can be overcome — including business ecosystems, business rules and governance, and layers of physical and digital authentication — Gartner expects that organizations’ supply chain blockchain initiatives will remain POCs.

Recommendation: Assess the capabilities, practical applications and value-add blockchain can deliver to the supply chain before plunging ahead.

Virtual customer assistants

By 2021, 20% of all customer service interactions will be handled by virtual customer assistants and chatbots.

Today, virtual customer assistants (VCAs) and chatbots handle 2% of customer service interactions. In four years, they will handle 10 times as much. Virtual agents will also be more empathetic, understanding, and able to manage high-volume complex interactions without human referral. The transformation will be visible as early as 2018, when industry leaders such as Amazon, IBM and Salesforce bring to market a new, general-purpose conversational AI platform. It will offer organizations a genuine alternative to human agents that is less costly and faster to deploy than what is currently available.

Recommendation: Explore 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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