Marketing spin or actually making a difference?
When it comes to supply chains, certain words seem to be bandied about like the ball at a championship tennis match. Back and forth, over and over, these supply chain buzzwords seem to have an endless lifespan. But are they just creative marketing spin (after all, developing them is kind of part of the job), or is what they stand for actually making a difference in your supply chain planning? I set out to find the answer and share my findings on whether they’re all hype, or actually helpful.
Internet of Things – HYPE
Ok, ok, I know a lot of folks may disagree with me on this one. But I stand by my claim that IoT in supply chain planning is more hype than helpful. At least for now. Let me explain.
The Internet of Things, often referred to as simply IoT, is hard to ignore. With advancements in technology and new IoT-enabled devices launched daily, there’s little question as to why supply chain leaders are taking note. IHS Markit Ltd. estimates the number of IoT-enabled devices will surge to more than 30 billion by 2020 and 75 billion by 2025.
According to Gartner Research Director Andrew Downard, IoT enabled devices power supply chain planning by letting you continuously sense, communicate, analyze and act. In one of my earlier blogs, I recapped his presentation at this year’s Gartner Supply Chain Executive Conference, where he noted several real-world IoT examples, including Coca Cola’s Freestyle machines, HP’s Instant Ink subscription model and Tesco’s virtual grocery stores. He also provided commentary on the rise of IoT order buttons, like Amazon Dash, and the impact they’re having on customer orders.
I am reading this absolutely fascinating book “Deep Thinking: Where machine intelligence ends and human creativity begins” by Garry Kasparov, former world chess champion. As the title suggests, in this book Kasparov shares a highly provocative point of view on artificial intelligence and its implications for the human race, with the backdrop of his 1997 loss in a highly publicized chess match up against IBM’s chess computer Deep Blue. The book did make me reflect on my own experiences and views on the division of labor between the machines and human supply chain planners.
Much has been written and said about how machine intelligence is impacting supply chain planning in the form of automating a human planner’s function, with implications on the future of the profession itself. I would be remiss in stating that automation will have no impact on planning profession. Yes! The focus on automation in planning is increasing and will continue to increase. However, this has to take place in the context of empowering planners and significantly augmenting their productivity to handle activities with larger scope and with higher levels of cognition that can drive strategic value for business. When done in a thoughtful and deliberate manner, automation initiatives can significantly benefit planners who are willing to adapt and change, and organizations as a whole.
There’s no getting around it. Artificial intelligence (AI) is here. From self-driving cars to intelligent digital assistants (one of whom I share a name with) to advanced robots working on the shop floor. But conspicuously absent in all this fervor around what’s new and next in AI are details and examples of how to implement these emerging technologies in supply chain planning. Everyone it seems is focusing on supply chain execution.
Don’t get caught in the spin cycle
While examples of AI and machine learning in supply chain planning are few and far between, that doesn’t mean folks aren’t making progress in this area. The trick it seems is not getting caught up in all the hype – and there’s certainly a lot of it. Nearly every company under the sun is touting their software as having advanced AI capabilities. Well it’s time for a little truth – most of those claims are just creative marketing spin (it’s ok, I work in marketing so I can say that!). There isn’t a supply chain management tool on the market today that can catapult your supply chain planning into a realm where humans are strictly hands-off.
That’s in part because AI in supply chain planning is still in its relevant infancy, but mostly because that isn’t the direction we’re heading. The robot apocalypse isn’t here. And there’s a good chance it’s never going to come. The likelihood of robots and smart machines putting everyone in the unemployment line is miniscule at best.
There’s no denying the Internet of Things (IoT) has taken hold of nearly every aspect of our lives. With the number of connected devices estimated to surpass six billion next year and more than 20 billion by 2020, the steady stream of data these devices are providing can easily crowd and clog your supply chain planning processes if you’re not prepared.
Gartner Research Director Andrew Downard addressed the issue during his presentation at the Gartner Supply Chain Executive Conference by outlining three macro trends affecting supply chain planning, chief among them IoT.
He defined IoT as a system of inanimate internet-connected devices linking the physical and digital worlds, and predicted that retailers engaged in IoT partnerships with major manufacturers will take significant market share from their competitors as early as 2018.
When it comes to your supply chain planning, the data sourced from IoT-enabled devices lets you continuously sense, communicate, analyze and act.
Recently, Madhav Durbha, Vice President of Industry Strategy at Kinaxis was interviewed by SupplyChainBrain on supply chain planning in the digital age.
I wanted to share their fascinating conversation with our readers – check out the video interview and transcript below:
SupplyChainBrain: What are you hearing from your customers about the biggest challenges they are facing right now in supply chain planning?
It’s fairly simple. It’s complexity and volatility are the two themes that I constantly hear from our customers, regardless of the industry, that seems to be the recurring theme.
Santen Pharmaceuticals has begun a significant transformation of its global supply chain environment. Santen is headquartered in Osaka, Japan and the company sells ophthalmic pharmaceutical products in approximately 60 countries. The company was looking for a single end-to-end planning platform that would reduce global planning cycle times and raise efficiency.
I’m thrilled to share that Santen Pharmaceuticals has selected Kinaxis RapidResponse for supply chain planning. Following a thorough evaluation, Santen selected Kinaxis RapidResponse because of its concurrent planning capabilities. With the deployment of RapidResponse, Santen will reduce global planning times, manual activity and eliminate the use of multiple disconnected spreadsheets. Having a consolidated view of the entire supply chain, Santen will plan for its expected performance, monitor its progress, and respond to variations to the plan as reality hits.
This blog is part of a video interview series. Check out the video below as well as links to other supply chain practitioner and Kinaxis executive interviews.
It’s no exaggeration to say that supply chain planning is seeing a revolution, says Jack Noppe, chief technology officer at Kinaxis. Now, no function or department has to plan in the dark or without knowledge of how a plan affects others in the supply chain.
Traditional supply chains planned in isolation because plans took place independently within each function. RapidResponse, the planning platform from Kinaxis, enables what the company calls concurrent planning. In other words, all functions plan in concert now. “That allows them to get better outcomes for the business and make decisions faster,” says Noppe.
The software’s single platform enhances end-to end-supply chain management for a number of reasons, not least that data from every source is made available much more quickly than before, Noppe says. “At the end of the day, it comes down to how much information you have when you need to make decisions, and how fast you can understand the impact of decisions.”
It is a great time to be a supply chain planning professional. Advances in processing power, networking, and storage aided by the enduring power of Moore’s law have opened doors for some exciting new developments in supply chain planning. Specifically for planners, the advent of real time planning, ability to process massive amounts of data, and the rise of machine intelligence are all opening up newer challenges and opportunities. Mundane tasks such as gathering data and processing it into information are being automated to a larger extent. The ability to run end to end network-wide scenarios is a reality now.
While this revolution in supply chain planning is in early stages of adoption, it is only a matter of time before these capabilities become mainstream within many organizations. Given that such a future is inevitable, how will this change the supply chain planning profession? Let’s examine the possibilities:
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