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Future-Proofing Tomorrow's Supply Chains

Posted by Deepak Mandot, Senior Industry Principal, Infosys

Over the past few years, supply chain management (SCM) has evolved from a labor-intensive local process to a 'low-touch' - in some cases 'no-touch' - complex global network. Today, SCM involves end-to-end and integrated planning and execution processes with real-time collaboration across the value chain. Such a system possesses tremendous flexibility in adjusting to a dynamic and consumer-driven marketplace. For some organizations, SCM advances have been gradual while for others, they have been transformational. Let us take a look at the journey of SCM to better understand how technology has influenced its evolution.

Until the 1990s, SCM involved replacing manual processes with automated systems and leveraging advances in engineering. The increased adoption of enterprise resource planning (ERP) systems during this period significantly improved SCM integration across various organizational functions and for different stakeholders in the entire value chain. ERP systems addressed several challenges within the extended supply chain including demand volatility, changing supply dynamics, shrinking margins, shortening product lifecycles, high product complexity, and lack of inventory visibility across supply chain nodes. Thus, the adoption of ERP fostered progress across the supply chain in areas such as planning, procurement, manufacturing, warehousing, distribution, and logistics.

The 21st century, with dramatic leaps of technology, has accelerated the SCM transformational journey to a lightning pace - one that is expected to continue over the next decade. A number of factors have contributed to this accelerated change such as Social, Mobile, cloud, Big Data, Internet of Things, and the emerging markets of Brazil, Russia, India, and China (BRIC), etc. In fact, the amount of data generated is expected to double every two years; and there are already more connected devices than people in the world. Thus, in an age where data drives revenue, SCM continues to evolve beyond ERP systems.

In view of this, one can only predict how newer technologies such as 3D printing, connected homes, smart cities, Google Glass, virtual reality, driverless cars, robotics, deep learning, etc., will change the supply chain of the future. Let us explore the possible impact of two such trends to better understand what's in store for tomorrow's enterprises.

  • Robotics - Robotics is already influencing supply chains within the automobile industry and this trend is set to witness extreme adoption across several industries. With the potential of robots to replace human labor for simple or repetitive jobs, several tasks within warehouse systems can be easily automated, thereby reducing labor cost and human error and improving operational efficiency. From here, it is only a mere step away to imagine how the use of drones can revolutionize the logistics industry.
  • Internet of Things - Known as the next step in the evolution of the Internet, the Internet of Things generates Big Data that is enabling smart analytics. With capabilities to extract, collate, organize, and analyze data, organizations are getting better insights to make strategic business decisions. The power of intuitive insights can trigger new advances in technology and automation, thereby increasing efficiencies. As device connectivity becomes popular, mobile applications are already making significant in-roads within industries such as retail, consumer and commercial telematics, smart metering, consumer electronics, remote health monitoring, etc.

Despite the technological promise of the future, the explosion of new trends has led to several SCM challenges such as:

  • Product obsolescence
  • Need for increased supply chain visibility and real-time collaboration
  • Responsive customer service solutions that can track complex and dynamic patterns to deliver a superior customer experience
  • Shrinking cost arbitrage opportunities between different economies leading to rising cost pressure
  • Pressing environmental concerns and increased competition owing to globalization

To address the above challenges and keep pace with these disruptive changes, organizations must become more responsive. The winning players in the SCM battle are those that can prepare themselves for increased complexities, global uncertainties and rapid change, thereby ensuring profitability.

To know more, please visit us at Booth # 1101 at Oracle Open World 2015. Infosys is a Diamond Sponsor at the event.


Also, there is an additional Supply Chain challenge resulting from counterfeit products in the market. This is more true in China where there are a number of new companies each day.

Hi Deepak,

Your article has correctly touched upon all possible areas of the supply chain dynamics and the IT perspective of it. Thanks for such informative blog. One area of my interest, which I have witnessed as well, is the diversified supply chain models practiced within a same organization, resulting in lack of non unification of common processes, with a high delta and process level cost. This mainly varies with large accounts specific processes, requirements specific to geographies, and other factors. I believe this has been also a major contributor towards the SCM challenge.
Just a thought!

Very understandable & interesting write-up; Would like to know more on the new trends - Robotics, Drones, IOT etc. and how these gel with the Supply Chain.
All the best to Team Infosys for OOW!!!

Good overview of how future changes in manufacturing shop floor may bring challenges to existing supply chain solutions, Effectively captured how Supply chain is not just ERP but much wider than that

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