by Alex Tran Alex Tran
Reading Time: 4 minutes

Supply chain management is constantly evolving in response to and in anticipation of new developments. Learn why Supply Chain 4.0 is the future of the supply chain and which supply chain trends are most important to take advantage of in order to operate more effectively.

Supply Chain 4.0

Whether or not you’ve heard of the term “Supply Chain 4.0,” it is likely already visible in the increased digitization of your supply chain management processes. But what exactly is Supply Chain 4.0?

Supply Chain 4.0 is the application of Industry 4.0 technologies to the supply chain, such as the internet of things, advanced robotics, and big data. The future of the supply chain, Supply Chain 4.0 will be faster and more efficient, flexible, granular, and accurate. As such, Supply Chain 4.0 will help companies reach a new level of operational effectiveness.

The rise of Supply Chain 4.0 will bring with it numerous supply chain trends in 2020 and beyond, a few of which are explained below.

2020 Supply Chain Trends

Artificial Intelligence and Machine Learning

Expect to see the use of artificial intelligence (AI) and machine learning (ML) in the supply chain increase as companies become more aware of their tangible benefits, which include:

  • End-to-end visibility: The constant data crawls that cognitive automation platforms perform allow them to create a virtualized data layer, revealing bottlenecks, cause and effect, and opportunities for improvement in near real time.
  • Reduction in manual human work: Cognitive automation eliminates the heavy lifting usually done by supply chain professionals, including countless hours collecting data from disparate applications and systems and using spreadsheets or BI tools to make plans. It’s also able to deliver a much deeper analysis than is practical with a manual approach, even down to the SKU level.
  • Actionable insights and informed decision-making: Cognitive automation platforms can process huge amounts of data to discern patterns and trends, quantify tradeoffs, and make predictions and recommendations. As a result, teams can make informed decisions and take the most cost-effective path available.

Companies are already enjoying the payoff of implementing artificial intelligence in the supply chain: 61% of executives surveyed in McKinsey’s global AI survey reported decreased costs as a direct result of supply chain AI.

More than half the executives reported increased revenue, and more than one-third of them reported a revenue increase exceeding 5%.

[Related: Infographic: 7 Technologies in Supply Chains]

Robotics

Innovative tools and technologies of all sorts will be making headway in supply chain management, but autonomous mobile robots (AMRs), in particular, are expected to be widely adopted over the next four or five years.

Supply chain robotics will be especially helpful in automating and streamlining picking and packing processes for both single pieces and entire cases. Robotic exoskeletons, wearable technology that imitates human physiology to support manual straining movements, can increase warehouse productivity, prevent injuries, and monitor performance.

We can also expect robotics to become much better integrated into warehouse operations, and automations to become much more holistic. In some warehouses, integration may even extend to production loading points, removing any need for manual intervention in the process.

Of course, the expertise of supply chain professionals will still be crucial. For instance, autonomous mobile robots may automate the picking process itself, but in order to do so they rely on information from the company’s warehouse management system (WMS), which is managed by human supply chain professionals.

[Related: Shipping, Technology, and Supply Chain Integration Strategies From Industry Pros]

Technology Integration for Smarter Warehouses and Supply Chain Planning

While the assumption used to be that overlapping technologies must be competing against each other, supply chain technology providers are beginning to realize that this isn’t the case.

For instance, although autonomous mobile robot technology may render some of a company’s warehouse management system tasks unnecessary, the WMS probably performs many other functions that the AMR isn’t capable of. Management teams will need both technologies to optimize their supply chain processes.

That being said, another new supply chain trend to watch out for consists of technologies and tools working together and integrating with one another. Tools will also become much more specialized, with new tools carrying out highly specific functions. Rather than replace old tools, these new tools will be added to the current technologies to spur massive growth in productivity.

Supply chain planning is also very important. It allows the supply chain to become more lean and effective. Data and analysis software can be used to determine future supply chain strategies.

[Related: What Elements Make a Successful Supply Chain?]

Blockchain Technology

Blockchain may not be the newest technology around, but that doesn’t mean that it’s no longer important. As the hype surrounding blockchain has been cooling off, the actual technology has continued to evolve.

In 2020 and coming years, supply chain processes will continue to benefit from blockchain technology’s ability to:

  • Secure all information within the blockchain.
  • Provide up-to-date, accurate information in real time.
  • Provide visibility into information and data for stakeholders.

Despite these significant benefits, most supply chain teams seem to lack either an understanding of the value blockchain can add or follow-through in implementing the technology: Only 10% of blockchain supply chain initiatives will reach their intended targets by 2023, according to Gartner predictions.

That 10% will certainly be far outpacing their competition, considering the importance of data throughout all supply chain management processes.

[Related: Shifting Patterns: The Future of the Logistics Industry]

Preparing Your Supply Chain for the Future

Now is the time to start leveraging Supply Chain 4.0 practices and associated supply chain trends to increase operational effectiveness.

At Hollingsworth, we’re committed to helping companies complete a digital supply chain transformation with features such as our SAP enterprise resource planning (ERP) technology, which helps us manage every aspect of the supply chain process, and seamless e-commerce integrations. We’re always looking to the future for innovative ways to improve supply chains.

For more information about how we can help you achieve more efficient and effective supply chain processes, contact us or request a quote.

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