Top 6 Supply Chain Trends for 2019

The year 2019 has only just begun, so now would be a suitable time to look into the question of which supply chain trends lie ahead for the coming year.

In the globalization era, the supply chain is more diverse than ever before. Every day new technical innovations offer the opportunity to reduce this complexity. Gartner vice president David Cearley describes this development as an “intelligent digital mesh” that “will be characterized by smart devices delivering increasingly insightful digital services everywhere”.

These circumstances are transforming the supply chain from a technology-enabled procedure to a technology-centric one. The enormously increasing complexity of markets as well as dynamically increasing customer requirements calls for trend-setting action from all industries. It is therefore not surprising that companies continue to concern themselves with ongoing trends in the areas of Artificial Intelligence (AI), Internet of Things (IoT) or Blockchain.

1. Artificial intelligence (AI)

AI embodies the technology of tomorrow. A wide variety of self-learning algorithms can be found on the markets. Masses of data are not only generated, but analysed, linked and patterned by data scientists. This added value enables a customized and individualised customer approach. With the associated machine learning, it is not the amount of data that is decisive, but the knowledge that can be drawn from it for the future. AI also offers a wide range of applications in the supply chain. For example, intelligent or autonomous technologies such as robots, drones, vehicles or appliances facilitate logistical coordination and organization in warehouses. In the service area, so-called conversational systems such as chatbots offer a direct point of contact for questions or comments from potential customers, which are presented in the form of virtual employees.

A report by ZMR (Zion Market Research) states that global AI in supply chain market estimated to cross USD 6,548 million by 2024.  AI is and remains a far-reaching topic, which fundamentally revolutionizes and determines the supply chain.

2. Internet of Things (IoT)

The alarm clock rings at 6 o’clock, you come to a perfectly heated bathroom and a freshly brewed cup of coffee is already waiting in the kitchen. Some would think the helping hand in this scenario is a loving partner, but – if you want that every day – realistically it concerns optimally networked devices that know exactly what they have to do and when. A wide variety of things, such as wearables, primarily provide data on consumer behaviour. In the future, the number of networked devices will increase enormously, thus boosting efficiency and productivity in supply chain. Gartner estimates the number of networked devices will be 25 billion in 2021. In the future supply chain, for example, these could be smart sensors on manufacturing floors in order to efficiently manage planned and predictive maintenance work. These sensors could also be used to closely monitor and track stock and the entire inventory. Not only does this save a lot of manpower, but it also allows you to optimally plan your future production.

However, it is actually a trend that poses major risks. The danger of a hacker attack increases with the number of connected devices. Therefore, the security aspect will play an even more important role in the future.

3. Immersive technologies

Augmented, virtual or mixed realities are nothing new anymore, especially in supply chain. Particularly in the areas of logistics, manufacturing and warehousing, AR offers numerous assistive technologies to facilitate the everyday work of employees. Hands-free picking with Augmented Reality, for example, where wearable technology, such as smart glasses, displays all relevant information in the user’s field of sight exactly when they need it. This way, picking tasks and barcode scanning can be done simultaneously. Smart displays, glasses or simulators can significantly simplify and improve future tasks in the supply chain.

From the customer’s perspective, AR can also be beneficial to them when making purchases; technology may enable them to view or test a product virtually, or to visit a virtual store. In the long run, this new consumer behaviour will have an impact on the retail supply chain, with fewer items stored at the point of sale and faster shipping from local warehouses.

Gartner predicts that “by 2022, 70% of enterprises will be experimenting with immersive technologies for consumer and enterprise use, and 25% will have deployed to production.”

4. Blockchain

There are many advantages to using blockchain: potential cost reduction (especially in administrative costs), shortened transaction processing times and improved cash flow. The blockchain allows two or more companies to process a transaction directly with each other without the need for involvement with financial institutions. This can be a decisive advantage, especially in the financial sector or in the energy industry. With regard to the supply chain, it also offers a good solution for counterfeiting, traceability and an increase in efficiency, as every transaction, no matter how marginal, is always presented transparently. Although the importance of blockchain has already been recognised, the majority of companies lack expertise and experience in this area. Gartner advises evaluating the technology soon as the blockchain is expected to create $3.1T in business value by 2030.

5. Digital twins

The computer-aided duplicate of things has evolved in many ways: Today, digital twins are not only used for real-time product monitoring, but also for opening up new business areas. Scenario testing and analysis can be used to assess future potential success. In manufacturing, for example, a digital twin can answer all the crucial questions: How much do I produce or am I able to produce? How much capacity do I have? Are my plans still realistic? In the unlikely case that demand for a particular product increases dramatically, you can adjust to such a scenario by testing it with the digital twin before. The current focus is on the IoT, where digital twins can enable intelligent decision-making.

6. 3D printing

The 3D printing hype continues, as it has found application in almost every industry but still has not reached its limits. Today, 3D printing is not only used for small series products or prototypes, but is even used in the mass production of car parts, for example. In the future, the advantages of 3D printing will be exploited to a much greater extent. Particularly in more cost-intensive productions for individual parts, such as those required in the aerospace industry, as 3D-printed parts can be produced much more cheaply and without loss of quality. The technology has been a hot topic for years but has not been seen as particularly revolutionary, so why is it one of the supply chains trends in 2019? Courtney Rickert McCaffrey, Manager of Thought Leadership, A.T. Kearney, explains why perceptions surrounding 3D-printing are changing across industries, due to rising consumer expectations and increased political risks. 3D printing can meet these needs and significantly shorten the supply chain.

Experts also expect to see the ability to produce multi-material items, such as smartphone components, according to individual customer needs using 3D printing. The potential for 3D applications is high, particularly in the aerospace, medical and consumer goods sectors, given the dynamics of innovation.

Final thoughts

In conclusion, it can be said that all these trends will clearly shape the efficiency and dynamics of the future supply chain. For companies, this means they are required to always be aware of ongoing changes and constantly be on the lookout for innovative solutions. Arguably, the most influential trend is Artificial Intelligence, as it currently holds the greatest potential. Precise and comprehensive goals, which meaningfully integrate AI while optimally adapting it to the industry and company, can contribute to significant competitive advantages and ensure lasting viability.

Header Photo: Alfa Photo – shutterstock.com