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The future of Supply Chains – 7 Key areas of Technological change

Filed under: Technology

The future of Supply Chains

These days, technology is advancing at a faster pace than ever before. Let’s have a look at how seven areas of the supply chain could be affected by future advancements. The supply chain of tomorrow will be vastly different from the supply chain of today.

1. Tracking & Reporting

The days of decision making based on pure instinct are over. Supply Chain Managers (SCM’s) are now able to access virtually limitless amounts of information with tracking becoming a reality in nearly all aspects of the supply chain. If it moves it can be tracked, from ecommerce orders with detailed real time reporting on stock levels to tracking forklifts & freight movements.

The entire supply chain process can be tracked & reported on with new technologies such as ERP systems, RFID’s, GPS tracking, Zone Control, Geo Fencing, demand signal repositories and smart meters. A key challenge, which is now faced by SCM’s, is how to best maximise utility of all this newly available information. Businesses will now be faced with challenges such as how to ensure quality of data and must also decide on which metrics are the most useful. If utilisation is correctly maximised, this data can provide an organisation with a major competitive advantage.

ForkTrack is a prime example of this new wave of easily attainable technology. ForkTrack, a system which is fitted to all forklifts/materials handling equipment in a fleet, features the latest communication and zone controlling technologies giving fleet managers an in-depth, real time report on their forklifts and other materials handling equipment. This enables superior management of the movement and storage process as well as giving access to the increase of productivity levels within a warehouse.

Ecommerce is also enabling the entire supply chain to see more information, regarding real time location, than has been previously possible. Data direct from the store fronts can now be easily accessed by manufacturers and suppliers, making total visibility from start to finish now within easy reach of the SCM’s. This benefit allows for more in-depth decision making and more timely resolutions when a problem occurs within the supply chain process.

2. Manufacturing

During the industrial revolution manufacturing moved from simple small scale localised production to large scale centralised mass production. However, over the next few years we can expect to see new trends emerge. Changes can be forecasted as it is clear that the required input of labour for manufacturing is continually dropping. This is due to the increase of robotics & other technologies which are persistently evolving and being utilised more and more within the manufacturing industry. The introduction of these technologies into the manufacturing industry has had a major effect on the overall time it takes to manufacture products.

There has been the suggestion that a Third Industrial Revolution is on the horizon. The development of 3D printing and scanning is already dramatically changing the supply chain process. This process involves a 3D scanner, which maps an exact image of an object and the data is then transferred to a computer. A 3D printer creates objects by laying down successive layers of materials. The object is slowly built up; in comparison to traditional machining that uses a subtractive process of removing material. A major benefit of 3D printers is that they don’t produce any waste materials; they only use what’s required to build the object.

Through this particular development, the cost & time of prototyping and designing in the manufacturing process is now able to be halved. A designer can easily scan an older or current model, redesign it using the technology and then print a prototype of their new design within a few hours instead of previous methods which required weeks or even months.  Designers and engineers now have the ability to physically print and see their designs within minutes and can also showcase their designs at a lesser cost.

 

It is the aim of developers that one day, 3D printing will be capable of building complex objects and not just prototypes. When developed, the effect on the supply chain could be enormous. Freight and shipping could almost be eliminated and road and rail transportation costs would be significantly reduced. By manufacturing locally where the demand is, a new wave of customisation for consumers would be enabled.

3. Robots

Kiva warehouse robotsKiva robots system is an exciting example of this and was recently purchased by Amazon.com. These robots enable a quicker sorting process and shorten the time taken to process orders. In the not-too-distant future, this robotic technology has the potential to replace carousels and conveyor systems, and reduce order picking and waiting time significantly.

Automated equipment, such as automated forklifts, are still in the early stages of development. However, automated applications for mining trucks are progressing at an outstanding rate. This technology is going to have a significant impact on how materials handling and warehousing is conducted. It is also currently having a major effect on the mining industry. It’s clear that the total supply chain is going to undertake a massive shift from human labour to robots in the next 20-30 years. Major reinvestment in the USA is currently taking place with many businesses taking advantage of the downturn to reduce staff and invest in AGV’s and other such technology as a cheaper alternative. Within the mining industry, many global organisations, such as Rio Tinto, plan for all aspects of their mining operation to be automatic using robotic technology within the next 5 years. This new wave of technology is changing the labour workforce and the traditional means of manufacturing and transportation within the Supply Chain.

4. Energy

With limited resources and unlimited demand, SCM’s are continually assessing alternative fuel resources to power the supply chain. Fuel consumption is a major expense for logistics companies and for the past 50 years, diesel has been the energy fuel of choice. This natural resource has fuelled almost all aspects of the transport process, however, many experts are now predicting a shift to battery power but the viability of this technology can still be questioned.

Lead and lithium batteries are leading the way in regards to battery power equipment, as they are becoming more and more cost effective. Despite batteries being a promising alternative they still have 4 major limitations that need to be overcome in order for them to become the backbone of the world’s supply chain.

Weight, cost, distance & time: Lead batteries simply weigh too much and are easily damaged if not correctly looked after. They are also costly and often supply chain managers refer to this power solution as ‘purchasing all your power needs upfront’. This can create an issue for current cash flow as most current business models are set around purchasing fuel in increments.  Batteries also have distance limitations; this means long distance trucking is impossible without battery recharging infrastructure.

Batteries require extended periods of time to recharge; as every supply chain manager knows time equals money. Therefore, having equipment charging for long periods of time is not a desirable option. One solution to this issue, it to have second shift batteries but the key downside is the large upfront cost that is required to have two sets of batteries for all equipment.

These days, green energy strategies are being looked upon more favourably than ever before in regards to a change in energy consumption within the industry. However, certain limitations must be overcome before any sort of transition can be expected. The implementation of hybrid cars by Linfox is an example of the evolving attitude towards both fuel consumption and also the reduction of emissions.

5. Shipping

solar sails container ship The continued search for alternative energysources to fuel the supply chain has also extended to the sea. With rising pressures on going green and curbing carbon dioxide emissions, ships are now looking to solar power as an alternative to old fashioned fossil fuels.

Due to this, the future of the shipping industry could change dramatically. Not only could the physical look of ships as we know them be altered but also the process in which they operate could be very different. With solar panels already being installed on ships in Japan, these “solar sails” not only absorb energy from the sun to fuel itself but also double as sails for the ship.

The possibility of advanced sail power for container ships is being considered for new container shipping power of the future and may be exporting and importing products between countries as early as 2013. This greener energy alternative would mean lower costs for transportation of products between countries as well as a less harmful effect on the environment than current shipping practices.

6. Road Transport Technologies

Scientists have now invested research into the development of tyres which have the ability to change shape according to the conditions of the road surface. These tyres are able to re-mold themselves to a new height and width on command. The development of the “Pumplon” is a tyre that has a steel shaft with adjustable rings, which adjusts the wheel deformation to either wider or narrower. The narrow setting allows for an increase in contact pressure, which increases traction in wetter conditions. The wider setting is preferable for muddy terrain and the driver can alter the individual tyre settings, allowing for the vehicle to manoeuvre out of difficult situations, which is not possible with regular tyres.

The implementation of this type of tyre technology would have a great effect on the flow of the supply chain. Transportation times could be dramatically reduced, where transport over unpredictable terrain is anticipated and fuel efficiency could also be drastically increased. This would allow for a speedier and more fluent supply chain and reduce costs for the transport industry.

7. Air

Currently, E-Green Technologies is investing in the return of inflatable giant airships. These environmentally-friendly airships run on algae and could be used by the transport industry to carriage heavy loads at a lower overall cost. These airships differ from traditional blimps/Zeppelins as they use bio-fuel, algae and the special water concentrate recovery system for fuel economy, as well as a simple construction combined with futuristic technologies. Bullet 580 is the first commercial airship to be launched; however E-Green technologies together with 21st Century Airships plan to build a large fleet to rent out to consumers.

The airships can reach a maximum speed of 130kmh and the Bullet 580 can carry loads of up to a ton, 20,000ft in the air. The airship can take-off vertically as well as land vertically, meaning area required for landing is far from vast. This reinvented style of transport could change the way the future supply chain is construed.

These changes in the Supply Chain process could have a major impact on how companies buy and supply to consumers. Whether we like it or not, the Supply Chain is evolving. How do you think consumers will be affected by these changes? What other future supply chain technologies can you think of?

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2 comments

This information is really helpful while i’m doing Logistcis course and having group assignments about these areas . Thanks a lot

Febryan
March 21, 2014 - 4:05 am

   
That was an enjoyable article to read. I support the University of San Francisco’s supply chain management programs and your article has given me many ideas to use for future content. Nice job! I invite you to USF site to visit our resource center located at this link. http://www.usanfranonline.com/resources/supply-chain-management/

Dean
June 27, 2014 - 12:51 am

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