The Digital Supply Chain:

The Landscape, Trends,

Types, and the Application
in Supply Chain
Management

A PUBLICATION OF CERASIS
 TABLE OF CONTENTS

Introduction

1 What is the Digital Supply Chain?

2 Supply Chain Trends

3 Types of Supply Chain Technology

4 Supply Chain Application

Conclusion
INTRODUCTION
 INTRODUCTION
What's the core difference between today's supply chain and the digital supply chain?
Look down at your desk. What do you see? If you see paper, pen, and a computer, you
see the typical, modern supply chain. If asked, could you provide the latest information
on your current automation, key performance indicators, data, use of IT applications,
and finance government? The chances are good that much of this information is stored
digitally. However, you would probably need to look through some of the physical,
tactile paperwork to find all of the information. Also, is the information stored only your
computer or a server? Now, how long is that going to take you?

This is a model example of why the physical and digital supply chain must merge. The
use of paper in modern business and the supply chain is tantamount to inefficiencies.
What happens if you have the right documentation but your business partners in another
city have no clue what is going on? The answer is simple: your information is living in a
world of silo-based tracking. This independent, unconnected tracking of data may feel
and seem efficient, but this methodology is severely flawed. Information in one location
does not necessarily translate to efficiencies across an organization, and the increasing
use of the Internet is making more data available. Yet, supply chain giants are trying to
embrace the digital world and increase efficiency in the quest for a more digital supply
chain.

Unfortunately, the results of a 2015 report on the use of digital efforts in the supply
chain, created by SupplyChainDigest (SCDigest), indicate many supply chain partners are
somewhat out of touch with the best way of leveraging data, analytics, KPIs, and the
digital supply chain. Let's take a look at why this is important and what it means for the
future of the supply chain.

In this all new e-book from Cerasis, a transportation management 3PL, learn what is the
digital supply chain, what is the state of the digital supply chain, what are the trends &
technologies, as well as application for more effective supply chain management.
 Chapter One

General
The 5 Huge Benefits of the Digital Supply Chain

What’s Wrong With Today’s Hybrid Supply Chains?

Recall the opening example. This is a hybrid supply chain. Some information is digital,
some information is physical, and some information is kept away from the overall
scope of the company in local, individualized centers or silos. However, this model is
not conducive to modern society. In 26 years, the number of people with an Internet
connection has grown from 2.8 million to more than 3 billion.

The number of connections is increasing exponentially every second. It would stand

to reason that 20-year-old processes are inherently inefficient when applied to the
modern society businesses and consumers. Therefore, the only solution is truly
embracing the digital nature of the modern world by making it a fundamental part of
modern supply chain management.

The digitization of the typical supply chain is the most significant change in society
and history. explains Daniel McMurray. Termed the “Third Industrial Revolution,” the
Digital Revolution holds many promises for today's supply chain partners, and the
supply chain needs to change to meet the demands. However, the way of adaption to
survive, much like the extinct species of the past, relies on how well these entities
respond to their environments. As a result, the true way of adaption requires insight
into process automation, KPIs, process management, data collection and analysis,
organizational design, and the full integration of IT applications across an
organization, which make up the Digital Supply Chain Network.
What Are the Benefits of the Digital Supply Chain Network?

A supply chain is only as strong as its weakest link, asserts Accenture. For supply
chain partners who have yet to take advantage of the digital supply chain network, the
weakest link is actually every single process, communication, connection, and point in
the supply chain. True, some process automation is beneficial, but this information
lacks value if not compared against the information from across geographical,
physical, or digital boundaries. When a supply chain partner embraces the scope and
possibilities of the DSN, some real benefits are realized.

1. Become More Forward-Looking.

Supply chain entities have created bad habits when it comes to maintaining a
backward-looking approach. in fact, 40.1 percent of supply chain entities work almost
exclusively in this manner. However, most respondents in the SCDigest report
indicate becoming more forward-looking is the greatest opportunity for use of the
digital supply network.

2. Connect and Relate Data Sources

The Internet of Things (IoT) has become a fundamental aspect of a successful,

modern supply chain. The IOT is responsible for many improvements in processes,
preventive maintenance, and identification of better ways to move products.
However, the IOT relies on the sharing of data, and the DSN can catalyze the current
limitations of the IOT exponentially. for example, connected devices in the IOT can
be used to deliver its data across multiple site, processes, and even organizations. As a
result, a more connected system will naturally lead to more connections and sharing
of such data.

3. Generate Data-Driven Plans Through Data Visualization.

As data becomes more available, this data will be applied to advanced analytics
opportunities. Additionally, the use of data visualization capabilities will make
applying data simpler. For example, providing a manager with data from yesterday’s
transactions is great, but giving a manager a graph with what time performance
faltered will go much further in allowing the manager to change today's operations to
prevent the failures of yesterday. For example, the following graph, produced by A.T.
Kearney, emphasizes how data visualizations tools arise from the use of digital
technologies, which may be applied to augmented reality, customer self-service
opportunities, cloud-based tracking and processing, and precision, local technologies.
In fact, the image itself is a form of data visualization.
4. Improve Collaboration.

Since data visualization tools help make changes in both the digital and physical
aspects of the supply chain, collaboration will be improved.
 5. Enter the World of Digital Products and Services

Modern services and products are not necessarily physical. Apps, Netflix, Pandora,
and Uber represent real enterprises that are based on the Internet. Some apps, such as
Etsy, go a step further by directly linking the creation of goods with customer-
generated designs. As a result, the need for embracing change is essential. The
manufacturer, a third-party between the seller and the customer, needs to receive
customer- or seller-generated data and apply it to production. Furthermore, the
benefits of of the digital supply chain can be seen in this A.T. Kearney’s graphic.

The age of the paper-based, silo-based supply chain is dying. As the use of local information for
local production only grows more obsolescent, the need to embrace the digital supply chain
network will be stronger than ever. For supply chain entities, the question is not about how
increasing technology will help reach new markets, define new strategies, or reach more customers
more adequately. Instead, the question focuses on if the technology can be implemented fast
enough to prevent a company’s extinction.
Emerging Trends in Automation: What it Means to
Supply Chains

Imagine a world where automation comes together with technology to deliver

products without human intervention. An order is placed by a consumer. 3D printers
pickup the details and print the finished product. It’s then picked by robots from the
shelves, packaged and placed into a self-driving truck. The trucks leave the facility,
and drones are automatically dispatched from the truck to deliver products while
moving. The truck never stops until arriving for reloading.

This example generates a huge amount of data that can leverage in the supply chain.
But, the same data can have a drastic impact on supply chain professionals and
agencies around the globe. While this example may still be a few years off, it is
important that you understand how the top emerging trends in automation will shape
supply chains and transportation processes in the coming years.

The Standard Definition & Components of Automation:

Today: There is a standard definition of automation in the supply chain. Anything

that can be handled via today’s computer systems can be automated. This includes
billing, generation of bills of lading, compliance reports and even movements
throughout a factory or warehouse floor.

Historically, automation has been applied to virtual processes, like order auditing or
customer service reports. However, the trends in automation are changing to reflect
actions that function more like artificial intelligence, not just a search and locate
program on the computer.
Additive Manufacturing –

What Is It?

Additive manufacturing includes all actions in the supply chain that can enhance
existing factory production, if not replace it entirely. Additive manufacturing may be
handled manually, but automating this process is as simple as turning on the power
and connecting to the Internet of Things (IoT).

For example, additive manufacturing might involve the use of 3D printers to create
replacement parts at the store for consumers.

Today’s Status:

Unfortunately, the capacity of 3D printers remains in infancy, capable of only

producing simplified parts out of liquid polymers.

Virtual Reality Comes to the Forefront.

Meanwhile, Google Glass and other virtual reality tech are changing how customers
complete their orders. In addition, the same technology can be overlaid with
augmented reality to give repair technicians and individuals greater resource access
when making repairs, checking order contents and fulfilling orders.

For example, augmented reality glasses will soon detect package dimensions and
classify the package according to dimensional pricing models.

Today’s Status:

Today, this technology is limited to automated identification and data capture (AIDC)
applications. Advancements in virtual reality over the past year indicate its future
might be much closer than “meets the eye.”

Additive manufacturing will gradually move products from warehouses and

distribution centers to be closer to end-users. As a result, the amount of last-mile
traffic may increase.
Robotics Enhance Inbound and Outbound Logistics for Shippers.

Another trend in automation involves robotics. By definition, robotics are the icons
of automation. They perform functions at the request of a system or person, but
more of today’s robotic systems are performing duties upon request from an order
fulfillment system.

The order process automatically notifies robots in warehouses and triggers the flow
of processes as seen in the opening example.

Robotics Improve Inbound and Outbound Logistics.

Robotics are not isolated to warehouse pulling for outbound logistics. They can be
used to manage inbound and outbound processes and strategy. Through trends in
automation and robotics, supply chain companies will have the tools and resources
necessary to ramp up throughput and decrease product cycle from order to delivery.
Therefore, more trucks and drivers will be needed, but the looming driver shortage
and capacity crunch will trigger another automation trend.

Autonomous Vehicles/ Trucks:

Automation begets automation. With advances in technology and the IoT, most major
companies, including Uber, Facebook, Google, and Amazon, have launched
autonomous vehicle and truck pilot programs.

These driverless vehicle programs will give supply chains access to a new
inexhaustible resource for moving products, overcoming the challenges inherent in
the driver shortage and capacity crunch.

The driver shortage and capacity crunch are likely to come to a head in 2017 as
consumers demand more product, at lower costs and faster than ever before.

Some setbacks have occurred, like the first self-driving car wreck earlier this year.
With each setback and challenge, companies have pushed back to overcome the
obstacles.
In response to increased interest in driverless vehicles and trucks, the National
Transportation Safety Board (NTSB) has issued recommendations and created an
advisory panel to review ongoing driverless vehicle advancements and maintain public
safety.

Transporters and supply chains will respond to this direction by leveraging the trends
in automation and power of data to ensure compliance with increased government
oversight, through the agencies you represent.

Companies have already tested cross-country driverless trucks, albeit with a person
ready in the cab to take over in the event of a system failure. However, the wide-scale
deployment of this level of driverless trucks is far from implementation.

In the interim, more automated vehicle systems will work in tandem with drivers to
enhance safety and maintain vehicle control. Similar systems are already deployed in
crash and pedestrian detection systems, automated braking and tracking control in
today’s vehicles. It is not difficult to apply today’s technology and automated features
to the fleets and drivers of 2017.

Trends in Automation: Whats the Potential?

The potential applications of this type of technology can include real-time traffic
condition monitoring and warnings, redirecting traffic before pile-ups and accidents
occur, similar to Google Maps’ capacity to show traffic congestion in real-time.

Data through such systems can automatically feed back into transportation planners’
systems to automatically change signal phase and timing and enable immediate
rerouting or adjustment of traffic flow on a broader scale.
Supply Chain Professionals: Their Role as a Catalyst to
Automation in the Supply Chain

There are additional advances in automation that push the supply chain toward
greater use and deployment of technology and supply chain professionals are the key.

Drone Delivery Takes Flight.

Last December, Amazon successfully placed its first test flight and delivery by drone.
As the technology improves, drone delivery will become a reality, not just a possibility.
Unfortunately, drones are not capable of flying for extended periods or high altitudes,
so drone technology will be used in conjunction with other technology.

This might involve a system like mentioned in the opening example, where drones are
deployed and return to trucks while on the road. Furthermore, new technologies, such
as Amazon’s recent patent filing for an airborne fulfillment center (AFC), will further
revolutionize drone delivery.

The simplest way to think of an AFC is like the airship used by Shield in Marvel’s
“The Avengers.” Today’s technology is not equipped to handle such large warehouses,
but Amazon’s patent suggests the technology may be possible within the next decade.
If the example is scaled down, the AFC could be the size of a modern blimp and
hold large pallets of orders for a local area. Drones could be deployed to deliver
products, and restocking could take place while the AFC remains airborne.

Additional benefits of such technology could include avoiding weather delays,

increasing delivery windows for customers and avoiding space issues with ground-
based warehouses.
HOS rules will make ELDs essential.

The changes to the Hours of Service (HOS) regulations, specifically the mandate to use electronic
logging devices (ELDs), will come into play later this year. Increased use of ELDs will require
transportation planners and supply chain entities work together to ensure compliance and bring
information gathered together into one system.

Companies Are Measuring Performance Against Amazon & Other Retail Giants.

Accuracy and security in billing is among key priorities due to increasing demand for lower product
and logistics costs.

Less manual entry, more machine-to-machine connectivity via the IoT, will create a more efficient,
productive and cost-effective supply chain, capable of competing with Amazon and Retail Giants.

More Information poured into Big Data through the IoT will enhance traffic flows, patterns,
translates into better maintenance of roads. As a result, companies can work to reroute deliveries,
and government agencies can have a better understanding of real-time and projected demands on
the country’s infrastructure, especially roads, bridges, and fuel demands.

To Plan for the Future, Supply Chain Professionals Should…

• Expect more information will be available for decisions.

• Increase resources devoted to automated data reporting.
• Identify weaknesses within existing infrastructure.
• Understand the traditional definition of warehousing will change.
• Optimize collaboration and information sharing among departments.
• Create a pathway for information sharing with freight transporters.
• Provide feedback to transporters.
• Consider the potential impact of more autonomous vehicles on the road when planning
construction, detours.
• Understand more shipments will likely be on the road as technology advances.
• Increase cyber security and compliance with such measures in their agencies.
• Streamline today’s activities.
• Recognize that technology may evolve faster than predicted.
• Analyze and apply data gathered from across transportation industry to identify patterns and
potential issues within the transportation network.
Companies focusing on technology will reap these benefits:

• Better collaboration and improved communication.

• Competitive advantage.
• Reduced operating and logistics costs.
• Increased on-time delivery and better delivery windows.
• Fewer problems with deploying new warehouses, factories and transportation
networks.

Automation technologies that will shape supply chain professionals and supply chains
over the next year:

• Additive manufacturing.
• Drones
• Driverless trucks & vehicles.
• Transportation management systems.
• Robotics
• New technologies developed by Amazon.

How Will It Impact Third-Party Logistics Providers (3PLs)?

3PLs will transform into 4PLs, tackling traditional logistics needs while working
toward better technology to increase responsiveness and productivity. In addition,
4PLs will provide value-added services to compete with Amazon and other major
companies.

More companies will turn to Off-the-Shelf Tech, Like the Cerasis Transportation
Management System (Cerasis Rater), to provide holistic improvements while
additional advancements in tech are made across a company. These systems will
continue to provide information needed for transportation planners and managers to
perform their duties and accommodate changes in traffic flow.
The Digital Supply Chain Demands the Use of Smart
Supply Chain Technologies

Modern supply chains have access to more information and technology than ever
before, creating a new, digital supply chain. However, the digital supply chain has
grown increasingly reliant on the use of “smart technologies,” such as those involved
in automated data capture, analyses and the Internet of Things (IoT). In addition,
these technologies can introduce a new level of visibility and improve overall
operations, asserts The Manufacturer magazine. Therefore, supply chain companies
need to understand how these smart supply chain technologies can be deployed, how
to ensure value in data analyzed and how smart technologies can benefit decision-
making.

Deploying Smart Supply Chain Technologies.

Smart technology is ineffective when not deployed across all operations. All possible
points of data should be connected to transportation management system, ranging
from warehouse management to customer relationship management. There are many
ways to provide data collection, such as Bluetooth-enabled devices, radio frequency
identification (RFID), automated scanners and robotics.

Obviously, small to mid-sized shippers may look upon increasing use and deployment
of smart supply chain technologies with fear. To newcomers, the investment costs can
seem high, and staying competitive can appear impossible. However, the rise of third-
party logistics providers (3PLs) is also changing the game.
An increasing number of 3PLs are abandoning tradition in favor of becoming more
than just a provider of logistics. They have created software-as-a-service (SaaS)
platforms that can effectively replace existing enterprise resource planning (ERP)
technologies with intuitive, adaptable and smart technologies. Meanwhile, the
mountain of data gathered by the 3PL from the deployment of a cost-effective
transportation management-as-a-service (TMSaaS) system, like the Cerasis Rater, can
provide insights into operations not previously possible.

An afterthought of deploying new technologies may be cyber security. But, dedicated

TMS systems and their parent companies have already taken steps to create a secure
environment with advanced cybersecurity measures in both the system’s servers and
within the cloud. As a result, shippers can improve cyber security simultaneously.

How Do Companies Prevent Bad Data From Causing Issues?

Okay. It is time to think about the difference between good data and bad data. Good
datasets give companies greater insight and visibility, but these insights can be lost
without proper data aggregation, cross-checking, and analyses. Essentially, bad data is
the conglomeration of incorrect data capture and application. In other words, systems
that have a proven record of accomplishment and success can eliminate these pitfalls
and risks.

For example, companies needing to know their average fuel costs should also know
the miles driven per vehicle, the weight of each load, the average cost of fuel per
gallon, the speed driven, the number of trucks on the road, traffic patterns and idle
time, reports Supply Chain Digital. If a company analyzed this information by hand,
it would take days to derive an average fuel cost for a day’s worth of shipments.
Fortunately, the IoT can collect and cross-reference information instantly, giving
companies the information they need without the hassle. Thus, true improvements
can be implemented.

The Benefits of Smart Technologies in the Digital Supply Chain.

Considering the evolution of robotics, these smart supply chain technologies also
have the power to improve supply chains where skills and workers are missing.
For example, smart technologies can be leveraged to reduce wait times and delays for fleet
drivers. Thus, more product can be moved within shorter time frames. Similarly, automated
systems in warehouses can reduce the problems caused by labor shortages, as explained by
Supply Chain Dive.

Meanwhile, politics, changing business practices and the emergence of new markets are
increasing focus on visibility across supply chains. Information collected from smart
devices and technologies can be leveraged to create new key performance indicators and
identify trends or possible issues within the supply chain. Now, some may argue that
increasing advancements in technologies are replacing human jobs. But, these opponents
of advancement should consider how such advances improve human capacity, asserts Matt
Davis, Gartner Managing VP, reports Forbes magazine.

Davis notes how traditional applications of technology in the supply chain, such as
automation are changing in the wake of new technologies. The Uberization of freight,
robotics and additive manufacturing are giving supply chains new ways of operating that
go beyond automation, redefining the standard operations found in supply chains.

For example, manufacturers can now reach larger markets by positioning product parts
closer to end users and regional centers. While the role of the distribution center is not
going away anytime soon, more supply chains will look for ways to eliminate overhead and
wasted storage space, cutting manufacturing to end-user lifecycles to record-lows. Applying
this concept to the use of Big Data can also dramatically change how supply chains review
and process information.

Disconnected systems and the breakdown of organizational silos will give supply chain
managers more ways to address potential issues in less time. Consequently, the amount of
time needed to process an order and its costs will decrease.

The Big Picture.

Thinking about your operating and deploying smart supply chain technologies may seem
overwhelming, but the potential costs of not utilizing smart technologies could easily
outweigh investment costs and result in bankruptcy. Rather than avoiding smart
technologies, you can implement them in your operation today, and see real benefits
translate into savings and higher levels of operation. Ultimately, your company must
become part of the digital supply chain if you hope to stay competitive through data-
driven decision making.
 Chapter Two

Supply Chain Trends

The State of Supply Chains: The Supply Chain Has
Gone Digital

We are continuing what will become a tradition of re-evaluating the progress of

supply chains throughout the year in relation to our predictions, as explained by this
blog post. Let’s look at how supply chains kept up with expectations and where they
fell short, if at all.

Supply Chains Went Digital.

2016 marched onward with a drive to improve the use of digital technology
throughout the supply chain. In the first supply chain trends post, we surmised the
previous year’s trends would continue. However, this prediction proved to only touch
on how important the digital supply chain would become.

Within four months, the digital transformation had already reached most supply chain
organizations. Per GT Nexus, 75 percent of executives surveyed recognized the
digital supply chain as an important factor for the next five years. Meanwhile, 70
percent have also started processes to implement digital supply chain technologies
throughout their companies.

Unfortunately, many supply chain entities continue to hope for a better tomorrow. In
other words, the digital supply chain transformation has only been rated as very
satisfying for 5 percent of respondents. In addition, just less than half, 48 percent, of
respondents report continued use of traditional technologies exclusively, which
include the following:

• Fax machines.
• Manual order entry and review.
• Land-line phones, not voice over internet protocol (VoIP), which reduces overall
costs and downtime.
• Email, although beneficial, is susceptible to internet connectivity issues, security
breaches and other problems.
• Chaotic picking protocols.
This infographic, created by GT Nexus, also shows other ways the digital
supply chain evolved in 2016.
Essentially, the digital supply chain is essential to gaining and maintaining competitive advantage.
Digital technologies, reports Richard Howells of Forbes Magazine, including Big Data, analytics,
the Internet of Things, social media, and point-of-sale reporting, enable business to know more
about consumer needs and wants than ever before. Consequently, they can more accurately
respond to changes in product demand across large distances and within infinitesimally small time
frames.

Supply Chain Execs Retained Fundamentals Throughout Change.

Innovation is the driving force behind change and improvement in the modern world. Supply
chains must evolve to meet an increasing number of omnichannel sales, and technologies must be
integrated within existing systems to reach maximum efficiency and productive value.

As explained by Grant Marshbank of VSC Solutions, “The rate of change is not going to slow
down. Technology will only delivery […] if it’s implemented with strategy and operations that
adhere to best practices.”

Marshbank’s words highlighted the need to focus on fundamental concepts while responding to
changes and improvements in the supply chain. For example, an optimized supply chain is good,
but it opens more opportunities for errors. Simply putting all an organization’s proverbial eggs into
one basket may be risky if appropriate auditing and review measures are not undertaken to ensure
continued compliance and accuracy in all orders.

Change is a necessity for businesses, including the supply chain, to grow and expand. Yet many
destructive forces can severely undermine a company’s progress. Bad weather, poor hiring
practices or inefficient maintenance of consumers’ financial data can decimate a company.
However, the response to hindrances in 2016 continued to showcase the importance of
fundamental concepts, asserts Ryder, which include the following:

• Continually seeking the fastest, most cost-effective means of transporting products to

consumers, including enhanced delivery options.
• Expansion of global footprint while adhering to local, state, federal and international
requirements.
• Keeping companies accountable and focused on giving back to their domestic partners
through reshoring or nearshoring.
• Working with more outside agencies, also highlighted by Samantha Carr of Business 2
Community, including crowd-sourced logistics, warehouse optimization and outsourcing, and
greater use of cloud-computing.
Augmented Reality Found Its Place Among Consumers.

Augmented reality sounded amazing and far-fetched early in 2016, but the year has shown
it to be one of the most successful product in existence. There tends to be more
acceptance of technologies in the workplace once consumers can identify how they work.

For example, new hires are likely to pick up tablet-based systems more easily since they
have been using them recreationally for some time. Essentially, the virtual-reality (VR),
which is the precursor to augmented reality, hype of the 2016 Christmas shopping season
is making more people excited about this new way to “see the world.”

While the VR hype may seem like it only emerged for Christmas, think about one of the
hottest games of 2016, Pokémon Go! This app was built on augmented reality,
combining the digital and physical worlds into one interactive environment. This
technology, reports JOC.com, will be a key to practically eliminated extensive training
courses and repair time requirements throughout the supply chain.

Ultimately, it translates into greater use of augmented reality in supply chains, which is
growing by 100 percent annually, reports Barcoding Incorporated.

What’s Next?

Clearly, technology dominated the conversation for 2016, but there are also changes in
how supply chains operate that require a more in-depth discussion as well. In the next
post of this series, we will discuss the impact of artificial intelligence, agile processes and
procurement expansion on the supply chain of 2016.
 AI, Procurement, & the New Lean

Understanding how different factors affect the supply chain remains a top priority for
research firms around the globe. This unwavering drive represents the continued
interest in advancing today’s capabilities with state-of-the-art technology and
adaptability. From artificial intelligence to refocusing on procurement, the state of
supply chain continued to explode throughout 2016, and you need to understand why.

Artificial Intelligence

Artificial intelligence (AI) is among the most well-recognized ideas in science fiction.
However, it's true applications are becoming more apparent daily. At the dawn of
2016, Facebook CEO Mark Zuckerberg called on his team to create a personal
assistance, and he professed his belief in personally coding the assistant would be key
to unlocking the secrets of AI. While this may seem like a revelation, personal
assistants are already omnipresent, including Cortana, Siri, Google, and Alexa.

As explained by Christine Douglass of Phys.org, artificial intelligence has the potential

to change healthcare supply chains, particularly in respect to non-direct care
equipment. In other words, the use of AI may help to improve patient outcomes and
reduce delays from misdiagnoses or laboratory testing. Of course, the human
controlling capacity for actual AI is still far from realistic, but the concept of a
superior AI did make strides this year.

Additionally, the push toward creating a self-sufficient AI is growing stronger among

supply chain professionals. A 2016 Accenture survey, reports RF Gen, explained how
more companies are taking advantage of AI benefits through
 linked supply chains. Essentially, a supply chain that is linked together is more
responsive and intelligent than individual workers or silos within the company.
Consequently, all processes, including inventory management, logistics, data analytics
and ongoing performance management, as reiterated by the staff of Supply Chain
24/7, improvement, can be optimized, creating a more efficient, direct and intelligent
supply chain network.

Agile = The New Lean

Another key player in the 2016 state of supply chain report was the move away from
rigid, lean processes to agile methodologies. Ultimately, lean supply chain processes
improved efficiency, but they limited the variability and adaptability within a company.
Most importantly, agile methods allowed for faster decision making across a virtually
limitless stream of issues, and this trend held true throughout the year.

The move to agile supply chain management inherently required more data sources
than traditional supply chains, reports GT Nexus.

For example, planning, purchase order placement, manufacturing floor information

logistics operations and beyond became essential variables in the goal of creating a
more agile supply chain. Thus, more companies replaced antiquated enterprise
resource planning systems, as explained in another GT Nexus report, with an easy-to-
integrate solution, such as the Cerasis Rater. This helped to build an ideal, cohesive
center for making the best decisions possible under any circumstances. Also, it
bridged the divide between manufacturing operations and service (logistics)
operations, explains Springer Link.

Gathering this information via new systems also enables quality benchmarking across
the supply chain. Per River Logic, the first step toward the creation of any agile
supply chain is the ability to detect and project disruptions before the occur, allowing
for better mitigation of issues.

For example, the Internet of Things (IoT) may rely on temperature sensors in trucks
to identify food spoilages, which can catalyze a diversion of an existing shipment to
meet the immediate needs of the consumer affected by spoilage. In other words,
these hypothetical scenarios give companies a means of seeing problems before they
occur and devising solutions required to overcome them.
Procurement’s Role Did Become More Important.

While much of the conversation on supply chains in 2016 focuses on after manufacturing,
it always helps to go back to the beginning. The start of any product or service is
procurement, explains Jonathan Webb of Forbes Magazine, which refers to the obtaining
of raw materials needed to create a product.

The 2016 state of supply chain prediction called for enhanced procurement capabilities,
focusing on establishing new supplier-vendor relationships. This would help manufacturers
adjust to changes in the availability of raw materials, and according to the Wall Street
Journal, manufacturers are on track to spend more than $1.5 billion by 2018 to grow these
relationships. Unfortunately, there continue to be major costs associated with procurement.
In fact, as much as 70 percent of costs related to the supply chain derive from
procurement and logistics operations. Clearly, additional resources are needed to help drive
costs down.

The solution to rising procurement and logistics costs is collaboration. Collaboration,

explains Datex, can overcome the challenges unique to procurement and logistics by
creating a common ground for procurement and logistics operations. When a company’s
whole logistics operation, including procurement, is considered cohesively, different means
of reducing costs may become evident.

For example, raw materials for product A may be sourced more effectively from supplier B.
However, if the materials are much cheaper from supplier A, which is closer to consumers,
the ideal solution would be to move manufacturing centers closer. Essentially, the
interchanging of information and working together helps to build a circular supply chain,
but that will be discussed in greater detail in the next blog post.

Supply Chain Methodologies and Intellectual Capacity Grew.

Supply chains are growing smarter and more efficient. With the increasing capabilities of
artificial intelligence, agile processes and collaboration between procurement and logistics,
the next wave of supply chain management is around the corner. In fact, the recent
shopping holiday saw the highest consumer spending rates in existence, and future demand
on the supply chain will only grow. Thus, our next post will continue the collaboration
discussion and touch on the importance of a circular supply chain and resiliency.
Circular Supply Chains, Collaboration, and Risk

Supply chains have traditionally followed a linear path, manufacturing products and
sending them through warehouses and distribution centers to consumers. However,
the age of the internet and omnichannel sales has created vast opportunities to
change how the supply chain functions, creating more cohesive, collaborative, and
circular supply chains. The predictions for 2016 hinted at these trends, but recent
reports suggest the need to alter the common perception of a functioning supply
chain is growing stronger. In fact, the final two posts in this series will focus on how
the supply chain is adapting to work in a more unified manner from collaboration to
visibility.

Collaboration Continues to Grow More Important.

More companies were taking steps before 2016 to improve collaboration across entire
supply chains. This was an effort to lower overall costs, increase share of wallet,
improve word-of-mouth advertising via business-to-business channels and develop
long-term relationships, and these benefits continued to be a hallmark of this year’s
collaborative relationships. More importantly, the steps for creating a collaborative
relationship were further defined, reports PLS Logistics, to include the following:

• Work together to create common-ground.

• Create more win-win opportunities.
• Select partners based on abilities and value.
• Establish joint-performance management systems.
• Collaborate over large time scales.
• Invest in the people and infrastructure of both companies.
Unfortunately, problems with collaboration continue to exist. Per Bill DuBois of
Kinaxis, data extraction and access continues to be kept in silos, process and function
goals conflict, and teams continue to be isolated. However, the solution to these
problems lies in distributing the workload evenly, including access to data sources and
sharing of information. While reassignment of workers to global locations is
necessary, creating a single source of data storage and access may be key to increasing
collaboration in the future.

Risk Management Evolved in 2016.

2016 opened with fears of a complete shutdown of the beloved Mexican restaurant,
Chipotle. The company had seen dozens of people sickened from food-borne
illnesses, and even locations that had reopened were struggling. However, Chipotle
rose above the ashes and continues to be a major company today. Essentially, the
importance of resiliency has shown that companies can overcome problems and risks,
but they do often cause widespread losses in the short-term.

This is a prime example of business continuity risk, but risk can take many forms,
reports Wayne Caccamo of Supply & Demand Chain Executive. With relation to
inventory management and product complexity, new technologies, such as 3D
printing, are enabling more efficient inventory management and control. While
printing foods does not seem to make sense, printing of parts on demand can help
reduce storage costs, eliminate concerns about overproduction or understocking and
enable continued complexity of products. This goes back to using technology to
mitigate risk, as explained by Patrick Burnson of Logisitcs Management.

For example, the need to respond to labor shortages during times of disaster can send
a company into chaos. However, knowing more about available labor workers and
where they come from can give a company the resources needed to overcome the
immediate challenges, securing the future of the company and promoting resiliency.

The Circular Supply Chain Leaves Linear Processes Behind.

The world is changing, and more people are considering what happens to products at
the end of their lifecycles. Rather than simply tossing malfunctioning products into
the trash, the push to recycle, reclaim and reuse products and their raw materials is
becoming a core function of the supply chain. In a sense, the ideas behind reverse
logistics are becoming essential to all supply chain networks, creating a circular supply
chain.
The idea of reusing products as part of reverse logistics in the supply chain is not new,
explains Edge Environment. However, the process of implementing sustainable business
solutions includes figuring out how to handle, value, store, collaborate with others and
still maintain standard operating efficiency. Consequently, the Ellen Macarthur
Foundation is working with more than 100 companies to evoke the transition to a circular
supply chain. In other words, global supply chain leaders are helping to shape the future
of circular supply chains. However, other third-party organizations, including the U.S.
Chamber of Commerce Foundation, are also pushing this ideal.

Sustainable business practices are a core value of 90 percent of supply chain executives,
reports UPS, and as many as 50 percent of executives are already working on creating
circular, sustainable solutions in their companies. Moreover, the cost savings from
creating nationwide circular supply chains in the U.S. could surpass $1 billion by 2025,
reports Kevin Brow of CIO Review.

What’s Next?

Today’s supply chains function in tandem with one another, and more emphasis is being
placed on long-term outlook than ever before. Concerning the importance of circular
supply chains and resiliency, cross-functional supply risk councils are taking advantage of
technologies, cloud computing, and collaboration to create multiple solutions that can be
implemented at a moment’s notice. Ultimately, these three factors are giving supply chains
the opportunity to survive times of despair and problems and ensure their futures.

In the next post, we will take a closer look at how specific cloud-computing technologies,
wearables and data analytics are shaping today’s supply chains.
 Data Analysis, Wearables, and the Cloud

Modern supply chains are evolving beyond anyone’s expectations due to increased use
of cloud-computing technologies, wearables and advanced data analysis. In addition,
the role of these technologies is becoming more than a means of guaranteeing
profits; they are enabling more small businesses to compete with larger, big box
retailers, which drives prices down for end users. A common theme of the 2016
predictions was growth and scalability, so let’s look at how companies are using these
technologies as we prepare for the innovations of 2017.

Cloud-Computing Use Continues to Increase.

Cloud-computing technologies are primarily designed to enable rapid dissemination

of information and access to software suites at a fraction of the costs of tradition
systems, such as Oracle or SAP. Powered by an increasing number of connected
devices via the Internet of Things, automated data entry is empowering usable data
and allowing more companies to replace legacy systems or integrate new technologies
with existing systems.

Meanwhile, cloud technology enables companies to expand infrastructure without

significant investment or use of resources, reports AXIT of Supply Chain 24/7. In
fact, up to 70 percent of companies surveyed in Europe have already implemented
cloud-based solutions to enable rapid scalability and flexibility. Furthermore, larger
companies are also realizing the cost savings possible through cloud technologies.
Another driving force behind the increased use of cloud technology in 2016 was budgets.
More IT departments are being forced to work within smaller annual budgets, and most
IT departments only account for 11 percent expenditures on new applications.
Consequently, the need for a low-cost, high-return system is becoming more prevalent,
and cloud technology can answer this call. Moreover, cloud technology enables global
access to information, explains Ship Rocket, so companies can ensure continued uptime
regardless of local events or issues.

Essentially, the cloud is working to reduce overall risk and reduce costs along the way, but
it is also becoming key to increasing accountability and visibility throughout an
organization. In other words, greater access to identical systems prevents organizational
silos from inhibiting visibility, asserts Alex Whiteman of Eye For Transport.

Wearables Became More Cost-Effective and Available.

The Apple Watch, Fitbit and Google Glass have been major catalysts of efficiency and
improving productivity, and other wearable technologies are continuing to drive the
supply chain forward. While most of the conversation focuses on their applicability to
picking processes or repairs, they can also have significant safety benefits, such as alerting
managerial staff when employees are overexerting themselves, which can reduce costs
associated with health care and benefits to employees.

For example, wearables measuring the number of steps, heart rate and calorie
consumption can virtually eliminate on-the-job cardiac events, reports the Inventory &
Supply Chain Optimization Blog. Furthermore, the vastness of warehouses also means
wearables may be used to identify medical emergencies and call for help if an incident
occurs. In fact, wearables were recently highlighted for their benefits to employee health
and safety by Boss Magazine. Unfortunately, full implementation of wearables in
warehouses may mean greater Wi-Fi costs or connectivity access for devices that do not
function on carrier radio waves. The use of wearables will continue to be one of the top
trends throughout the remainder of 2016 and upcoming years as well.

Simultaneously, wearables could help reduce trucking accidents by reducing fatigue,

maintaining vehicle safety and security and improving driver performance, reports Christy
Pettey of Gartner. Since the driver shortage only appears to be growing worse, keeping
today’s drivers driving is essential to the success of the supply chain.
Data Analysis Grew Exponentially, Providing More End-to-End Visibility and
Continuous Improvement.

Data analysis is the companion of cloud-computing technologies. The use of the cloud
almost inherently implies co-occurring use of data analytics for integrated systems.
Consequently, the focus on data analysis also grew significantly in 2016, and the use of
beacons and connected devices, including POS systems, on-truck sensors and inventory
management applications, will continue to shape how consumers obtain products from
manufacturers and vendors. Think about the grocery stores that have implemented self-
check-out registers.

While this idea seemed ground-breaking in 2006, it has become a commonplace aspect of
nearly all Walmart locations. Unfortunately, these same POS systems are also enabling
theft, reports ABC 10 News. Consequently, the retail giant is having to rethink how it
reduces theft by making systems more accountable, which results in direct data analysis of
consumer shopping patterns. This needed degree of visibility is also present in the supply
chain. Per Steve Hitchings of Talking Logistics, supply chain visibility and business
intelligence go hand in hand, and these technologies can practically stop a hemorrhaging
cash flow. However, they also can stop problems with inventory management.

Retail sales are only showing increased ability to break previous records. Back-to-school
sales were expected to be slightly more than in 2015, and the 2016 holiday shopping
season broke all-time records. The ability of machines to learn more about today’s supply
chain is essential to achieving greater visibility as the number of transactions and their
values climb, reports Scott Dulman of Supply & Demand Chain Executive. More
importantly, the concept of machine learning is empowering a new wave of analytics
capabilities, allowing more retailers to respond to real-time data on what consumers need
and want, reducing headaches and bottlenecks throughout the entire supply chain.

2016 Was a Year of Innovation and Determination.

Across global supply chains, the focus of 2016 was clear; make the supply chain more
responsive, accountable, adaptable, accessible, flexible and based on technologies and
innovation. Most of the trends or predictions listed earlier this year came true, and many
were key in helping more companies survive the growing power of Amazon and big-box
retailers. If you can use the technologies and trends identified in this series fully, or even
begin the process of implementing them, in your organization, you will be able to stay
competitive and keep your company afloat in the coming years.
 Chapter Three

Types of Supply Chain

Technology
Technology’s Ever-increasing Role in Supply Chain
Functions

For decades, the realm of transportation management, warehouse management, and

order fulfillment remained set in near-prehistoric hands of isolated silos, inefficient
processes, and limited accessibility. However, technology has risen to dramatically
alter the execution of supply chain functions. Technology poses the greatest
opportunity for small- and medium-sized businesses to take advantage of innovative
tools to ensure end-to-end tracking, visibility, and processing of products.

In a Logistics Viewpoint survey, 50 percent of businesses reported sharing inventory

across all channels or engaging in omni-channel practices. Additionally, the
overwhelming majority, 98 percent, of businesses reported sharing inventory between
online and retail locations. However, this sharing of information would have not been
possible without the use of technology across the supply chain. Let’s take a look at
what is driving the role of ever-increasing technology in supply chain functions and
how the supply chain is adapting to meet these demands.

What’s Causing the Shift Towards Greater Use of Technology in Supply Chain
Functions?

Many different factors play into why the supply chain needs an increased degree of
technology in use. However, the direct causes are ultimately consumers and capacity
issues. Before you can understand what this means, you must consider how supply
chains do not necessarily need new technology. Conversely, they need a new type of
technology; they need a combination of their existing management platforms.
Consumers Demand More Now.

Prior to the rise of the Internet, consumers had no option for obtaining products beyond
retail stores and catalogs. Supply chain entities were focused on providing the right
product at the right place at the right time. Today, supply chain entities need to have any
product available at any place at any time. This seems impossible, yet more supply chain
entities have learned to leverage consumer demand against supply chain efficiency. If
latency, delays, and other problems occur in supply chain functions, it may lead to
customer dissatisfaction, which in turn, results in lost profits for the supply chain. Now,
let’s think about the other chief cause of this switch.

Capacity Versus Capability Versus Demand.

In previous posts, we have discussed the driver shortage at length. We have analyzed its
causes, possible solutions, and disadvantages in today’s supply chain. However, some
industry experts believe the driver shortage may not be all it’s made out to be. Yet,
shippers and supply chain entities continue to cry for more drivers and larger fleets.

Abtin Hamidi, according to JOC Magazine, believes the driver crunch is simply a
masquerade for hidden shipping spaces. Think about the facts of the driver crunch. There
are plenty of drivers hauling less-than-truckload loads in large, truckload trailers. You
must also consider how dwell time, lag time, and driver delays are giving off a sense of
impending doom and inability to cope. How much deadhead is being created by drivers
moving empty-hauls from location A to location B? Ultimately, the fact remains:
inefficiencies still exist in today’s supply chain functions. However, technology’s growing
role will change the playing field.

What Did Technology Do to Supply Chain Processes and Management Systems?

Without thinking about the supply chain, how has data storage changed for the average
household? The Cloud. Without thinking about shipping, how has technology changed
the lives of every person on a communicative scale? Smartphones. Now, think about what
these two advancements mean for supply chain functions and processes.
This Decade’s Management Forecast: Cloudy

Introduced by Apple, the cloud quickly grew to become one of the most common
aspects of data storage and retrieval. Many businesses did not realize cloud-computing
technologies had already existed prior to the launch of the iPhone. However, cloud-
computing capabilities is not limited to data storage and retrieval. It means smaller
businesses can take advantage of software previously limited to the most financially
powerful and successful businesses, which includes all levels of supply chain functions.

Cloud-based technologies allow multiple management systems, such as warehouse

management, transportation management, and enterprise resource planning systems
(ERPs), to communicate and share data. Furthermore, this means the costs of gaining the
ability to share data is significantly less than using an integrated, on-site-exclusively
sharing system. In a sense, sharing data gives everyone in the supply chain the ability to
look into their functions and determine what needs to change. For example, e-commerce
applications may be used to generate automated order picking, fulfillment, and shipping.
Although communication between systems is a definitive marker of how technology is
changing the supply chain landscape, it needs an additional data capture, and smartphones
are the answer.

Smartphones Impact Real-Time Data Capture.

Regardless of demographic identity and location, smartphones have become one of the
basic aspects of life in modernity. Every smartphone has at least five different apps. An
app controls the phone’s calling and texting capabilities. Another app accesses the
internet. An app takes pictures, and another app works with email capacities. The last
common app shows users exact GPS coordinates of the phone. Obviously, some
smartphones have many more apps, but the last of the five is has the greatest impact on
the supply chain functions.

Supply chain entities have grown to understand drivers will always carry their
smartphones. Smartphones are a necessity for staying in communication and staying safe.
With this in mind, some supply chain management firms, especially third-party logistics
providers (3PLs), have found creating a TMS-, WMS-, and ERP-integrated, native app for
the company can help cut costs.
When a driver arrives at a distribution center (DC), the app can provide direction for
which loading to find, how long the loading will take, and provide digital paperwork to
handoff at the destination. Now, this same concept can be applied to tracking a driver’s
movements and activities. For example, unloading freight at locations A and B may leave
the truck with empty space. The app could let drivers know to pick up a nearby load for
return to the DC or to drop off at another destination. Similarly, the app could notify DC
staff of an approaching, delayed, or other problematic truck, and DC staff can change
schedules, loading requirements, or other plans to meet the truck upon arrival.

The app may also be used to track mandated requirements for drivers, such as vehicle
inspections, meal breaks, and consecutive minutes spent driving. The app helps to ensure
drivers maintain an efficient schedule without spending extra time logging information
manually.

The role of technology across supply chain functions cannot be understated. The supply
chain has the tools to expand current technologies to smaller, disadvantaged companies;
however, this expansion is the ultimate cost of living in a digitally-charged age.
Technology will always have a place in the supply chain, especially as cloud-based
computing, e-commerce, smartphones, and improved efficiency analytics continue to
thrive.
4 Key Trends to Watch in Smart Manufacturing and
Supply Chain

Industrial IoT and big data are converging to enable demand-driven 'smart supply
chains.' The advancements in 3D printing and 'Additive Manufacturing,' coupled with
supply chain efficiencies, could make distributed manufacturing a reality, ushering in
the era of smart manufacturing.

The Continual Coverage and Now Reality of Smart Manufacturing with 3D

Printing

I remember reading an MIT paper on

manufacturing technology trends a
couple of years ago. It had a fascinating
mention of "Additive Manufacturing"
(AM) and how it could be a game
changer. One of the biggest challenges
facing automotive, aerospace and
defense manufacturers is the limited
shapes a part can be cut, molded or
welded in. On the other hand, a digitally
3D-printed part can be molded into an
infinite number of shapes. According to
industry standard ASTM F2792-10, AM is defined as, "The process of joining
materials to make objects from 3D model data, usually layer upon layer, as opposed to
subtractive manufacturing technologies.“

The promise of AM is the use of less material, lightweight alloys and to provide faster
cycle time due to rapid prototyping. The AM processes would produce less scrap,
address complex geometries and improve strength-to-weight ratios. AM has the
potential to move manufacturing from mass production in large factories with
dedicated machining and tooling lines to an era of mass customization and distributed
smart manufacturing.
It would be interesting to watch how AM matures in the years to come because it is still in
early stages. AM cost centers are currently more expensive than traditional CNC
machining, and the production rate is slower once you move past the rapid prototyping
phase. The powdered material availability and suitability in a variety of industrial
applications is still evolving. The mechanical properties of the parts produced with AM
have to be proven. It is especially important in the industries such as automotive, aviation
and energy, where failure of a part has direct safety implications.

Smart Manufacturing: Will it Take Hold in the Coming Years....the Internet of

Things Might Make it So

The next key trend I see coming is a more prominent role of Internet of Things (IoT) in
extended supply chains. IoT can help companies provide improved predictability of
customer demand with real-time visibility of product and service demand signals. In a
supply chain, strategic deployment of IoT technologies can improve asset utilization,
customer service, working capital deployment, waste reduction and sustainability. Real
time communication between machines, factories, logistic providers and suppliers
provides improved visibility on the end-to-end supply chain.

IoT can address compliance, regulatory and quality reporting requirements such as parts
traceability and product genealogy, emissions and country of origin. With IoT,
organizations are better suited to track shipped products for warranties, returns and
predictive support for maintenance.

The real premise of IoT-enabled supply chains is to delegate decision making on some of
the operational aspects to smart objects and systems, based on real time analytics and
machine learning algorithms.

One of my concerns is IoT security — especially on how to protect deeply embedded

end-point legacy devices that have limited resources and interfacing mechanisms available.
Smart Manufacturing will Make Supply Chains Demand Driven not Forecast
Driven

This brings us to customer- and market-driven supply chains. Most companies think they
do their supply chain planning based on the demand— in reality most of the time it is
nothing but a disguised forecast based supply chain. To gain and sustain competitive
advantage, the principles of lean manufacturing, just in time and inventory control are
simply not enough. Organizations would need to be not only aligned with true customer
demand but also shape the demand using technology and analytical tools.

Supply chains need to move away from being forecast driven to become demand driven.
Forecasts by their very nature are inaccurate. You cannot simply go by historic sales
patterns, throw in current market conditions and seasonality, and hope for the best. One
needs to shape the demand, the goal needs to be maximization of the profit, not simply
reduction of cost or maximization of revenue. The essence of demand shaping is
knowing about your most profitable customers and products, and protecting and
promoting them.
All customers are not created equal. The data science algorithms can help in customer
segmentation and clustering. They can tell which customers are the lowest cost to serve
and which are likely to buy the highest profit products. The current crop of big data and
analytics tools provide a way to integrate data from sales, marketing, action of customers,
product reviews, competitor information, warranty data and supplier status in near real
time to make demand-driven supply chains a reality.

Big data can help in capturing structured and unstructured data from sources internal, as
well as external, to the enterprise. Big data now enables "postponement"— a practice that
allows manufactures to delay building final finished products until the very last possible
moment, to be truly sensitive to customer demand.

Smart Manufacturing Driving Reshoring?

This leads us into our final trend of distributed smart manufacturing. There have been
opposing trends of strategic outsourcing of manufacturing versus bringing more and
more manufacturing in-house. The first approach provides flexibility, frees up capital
resources, lowers cost and speeds up product development. The inherent risk with the
outsourcing approach is the potential to lose intellectual capital, lack of control on the
process and quality, and the potential of brand dilution.

Strategically, smart manufacturing is the future of manufacturing. In the next few years,
Industry 4.0 will bring advances in AM, IoT enabled connected factories, manufacturers
and distributors, and end consumers will make distributed manufacturing a reality.
8 Ways Cloud Technology Is Changing the Game For
Supply Chain Management

History has taught supply chain management organizations one common factor:
failure to adjust to societal changes will contribute to business-downfall. In the
modern, digital world, the impact of the cloud can be felt in every facet of existence,
not just commerce. Cloud computing technology has allowed supply chain
management providers to take advantage of a new era of processes, specifically those
relating to the ethereal space. Traditionally, supply chain management has relied on
physical, in-person processes. Take a look at how cloud computing technology
impacts supply chain management concepts.

Advancement in Analytics Capabilities

Previously, analysis of data gathering required both a data entry clerk and a person to
conduct data analysis. The cloud, in conjunction with the Internet of Things, has
enabled rapid collection of data from various resources and analysis of this data. As a
result, businesses can eradicate these former “human” positions in favor a service that
performs the same results one an exponentially faster scale. Ultimately, this allows the
business to make better decisions for how daily activities behave.

Integration of Multiple Platforms

As more businesses have accessed supply chain management providers, a great deal
of platforms have been created to facilitate this change. Unfortunately, many of these
platforms do not coexist well with one another. The use of cloud technology enables
multiple platforms to work with one another through a series of standardized
protocols. Therefore, the previously existing digital boundaries between rapid
communication and order fulfillment become nonexistent. An example of such
binding technology is FlashTrac, Flash Global's proprietary supply chain management
integration system.
Removal of Geographic and Political Boundaries

In close relation to integration of systems, cloud technologies remove physical and political
boundaries from the supply chain management perspective. Since many cloud hosts rely on
common practices for accessing, storage, and retrieval of cloud data, the same information
may be altered from any place on the globe. Furthermore, cloud technology allows for the
dissolution of political debates between business practices; although, the rules of governing
entities may have the capacity to limit Internet access, such as was seen in Egypt in past
years.

Enhanced Security Measures

Since cloud hosts have to abide by strict government and public perception standards for
maintaining privacy, such as medical and financial data, cloud technology brings state-of-
the-art security measures and practices to the forefront of supply chain management.
Interconnectedness allows for massive security monitoring and implementation across all
cloud-based digital planes while still maintaining communication and enhancing the flow of
business practices.

Increased IT Capabilities

Agreements with cloud providers allow supply chain management providers to eradicate the
need for extensive in-house IT departments; although, some minimal in-house IT
departments are usually retained for in-house physical IT needs. When in the business of
using digital resources, such as those used for e-commerce, a business needs to ensure
customers can resolve problems with their system at virtually any time. Therefore, most
cloud hosts offer 24/7 support for those using their services, which can be rerouted to
correcting issues with your customers without your input if you prefer.

Adjusting to Market Volatility

US manufacturing is no stranger to the damaging effects of market volatility. Less than a

decade ago, the US saw the worst economic collapse since the Great Depression, and
supply chain management providers must always be wary of how resources will be used in
the event of a collapse. The use of cloud technology provides a buffer against market
volatility. Essentially, partnerships between a supply chain management provider and a
cloud host are subject to renegotiation, or even cancelation, if the market suddenly declines.
As a result, the supply chain entity is able to minimize associated costs with the collapse
and maintain service at competitive rates.
Increased Scalability Abilities

Since cloud technology insulates supply chain management providers from market
volatility, it can also be used to achieve rapid scalability. As a budding business begins to
experience higher demand for product, the respective supply chain management provider
may need to increase production by factors of five, 10, or more. With each additional
order comes the strain of extra bandwidth and processing capability, which cloud
technology provides. Within minutes, a supply chain management provider can extend the
terms, or services, with the respective cloud host to account for the instant growth in
capability. Furthermore, the use of cloud-based analytics allows businesses to isolate key
inefficiencies within the order fulfillment process, which will further grow the respective
business.

Reduced Costs

The greatest benefit of cloud technology on supply chain management providers is

reduced operational costs. Throughout the supply chain, cloud technology can reduce the
amount of workers needed to perform specific tasks. For example, the cloud could be
used to automatically generate a report of needed product at a specific warehouse, trigger
the respective shipment, and account for the product when received at the destination. As
a result of minimizing human-input within the order processing, those employees may be
then reassigned to other physical aspects of the supply chain. Additionally, supply chain
management providers reap the benefits of lower security, IT, data analysis, and more.

As society becomes more dependent on the cloud, more supply chain management
providers will come to recognize the role of the cloud in today’s supply chain. When
comparing traditional supply chain benefits and processes to the last benefit of cost
reduction alone, the lower cost of using cloud technology could easily make up for any
potential problem encountered within traditional supply chain management processes.
 Wearable Technology in the Supply Chain: 3 Core
Benefits

Do you ever watch Undercover Boss? Think back to 2012 when Sam Taylor, CEO of
Oriental Trading Company, went undercover in his own company. One of the most
surprising parts of the episode showed a warehouse worker using a voice-automated
picking system (see video below), and the worker would then scan the product with a
scanner on the tip of his finger. Well, this example shows how wearable technology in the
supply chain was being used 3 and a half years ago in 2012. However, the applications of
wearable technology in the supply chain have grown beyond the computer-generated voice
that spoke way too fast, way to monotone, and way too annoying. Today, wearables are
becoming increasingly popular, and these devices have the potential to radicalize the typical
supply chain in forward and reverse logistics processes.

What’s Happening with Wearable Technology in the Supply Chain?

The supply chain is driven by increased consumer demand and ability to meet these
demands. A decade ago, Apple and Microsoft changed how everyday computing power
was viewed with the creation of the cloud. The benefits of the cloud in the supply chain
are clear. The cloud is enabling small and medium businesses to compete with larger, Big
Box retailers for better, faster, more effective enterprise resource planning tools.

Additionally, the rise of third party logistics providers is helping the same organizations
attain the same cost and efficiency of their bigger competitors. As explained by Richard
Jones of Supply & Demand Chain Executive, 2016 will be the year of wearable technology
in the supply chain. Wearable technologies are further driving efficiency and productivity in
the supply chain by pairing advanced computing capabilities in the cloud with a small,
miniaturized way of automatically capturing data and logging this data. As a result,
companies use wearable technology are allowing workers to focus on the high-level
processes, not data entry, reducing the opportunities for error, building a better supply
chain, and increasing the vitality of the supply chain.
What Are Wearables?

Wearables are very self-explanatory. Wearables refers to devices that are connected to an
internet source and allow workers to perform supply chain tasks without the need of
taking up space or additional resources, asserts Supply Chain 24/7. Essentially, wearables
are the “new type of tablet on the wrist, face, head, or other body part.”

Use of Wearable Technology in the Supply Chain and Manufacturing

How Do Wearables Improve the Supply Chain?

In the past, the use of wearables was impractical. Workers could not logically carry
around a tablet strapped to their chest and enter data manually while still performing the
critical processes of the supply chain. However, modern wearables, such as the Apple
watch, Samsung’s Smart Watch, Fitbit, and Google Glasses, enable workers to perform
critical tasks, and at the same time, wearable devices along with the Internet of Things
(IoT) are continually providing data to the organization's ERP, and if integrated to other
systems, within the cloud through low-energy Bluetooth devices, Wi-Fi, or radio
frequency identification (RFID). However, many in the supply chain fail to recognize how
wearables will transform and improve processes. Basically, wearables look like their sole
purpose is data capture and accuracy, but wearables actually give rise to several significant
benefits for the supply chain.

Speed and Accuracy

The key benefit of wearable technology in the supply chain revolves around speed and
accuracy. If the wearable technology automatically provides the worker with information,
the worker is no longer required to review paperwork and figure out his or her tasks. For
example, wearables may be used to tell a worker exactly where a product is located in a
warehouse, according to Supply Management magazine. Since that piece of technology is
connected to the Internet, which is currently tracking the inventory levels of the given
supply chain entity, workers can automatically know if a product is in its proper location
and ready for picking.

Once the product has been picked, the information can then be transmitted back to the
ERP through automatic data capture of the wearable piece of technology, eliminating the
need for the worker to manually input what products were picked and improving
accuracy.

Identification of Inefficiencies

The best predictive analytics systems in the world are only as good as the data the process.
Unfortunately, most predictive analytics systems rely on manual and automated data
capture. As explained by Nye Longman of Supply Chain Digital, the lowering cost of
wearable technologies will help the supply chain become better able to capture more
information, which can then be used by the company’s ERP to identify inefficiencies.
This could be as simple as rerouting workers when a product bin runs empty or “telling”
workers that walking from Point A to Point B by Path C will save 45 minutes due to
freight loading issues on Path B.
Improved Safety and Quality

The supply chain is not necessarily one of a worker's favorite places. Warehouses become
hot in the summer and near frigid in the winter. Although plenty of warehouses are in
climate controlled settings, the physical workload alone makes an air-conditioned
environment seem sweltering. However, the human body can be fickle. Maintaining a fast
pace and continued perspiration can lead to dehydration, heat exhaustion, increased heart
rate, and high blood pressure, which further increase the risk for having a cardiac event, a
stroke, or other major health crisis while at work. So, how does this relate to wearable
technology in the supply chain?

The answer is simple: think about what Fitbit does. As a supply chain entity or warehouse
manager could automatically recognize when an employee's heart rate reaches a
dangerous threshold and recommend that worker take a break. Although this seems
counterproductive, it could actually save the supply chain money by reducing the chance
of having a work-related injury or event take place. Furthermore, workers who are in a
pleasant environment are more satisfied with their jobs, and these workers will be more
likely to pay attention to what they are doing. In other words, products will be placed in a
bin appropriately and not tossed aside like yesterday's garbage. This directly leads to
better quality control of the products and environment and reduced down time from
unnecessary health events.

Final Thoughts on Wearable Technology in the Supply Chain

Obviously, the use of wearable technology in the supply chain implies supply chain
entities will need to take a stronger role in ensuring security. However, the providers of
wearable technology are in a continual battle to ensure the privacy and security of these
devices is maintained at all costs. If you are still unsure, just look at Apple's current battle
over unlocking an iPhone 5C. Wearables will continue to improve the supply chain, and
supply chain entities must be willing to trust wearable manufacturers to help keep their
information safe and secure. The supply chain is approaching an era where technology is
almost unseen, resting in plain sight, on-the-person of its workers.
 What Is Blockchain Technology, and What Is Its
Potential Impact on the Supply Chain?

The modern supply chain continues to seek more cost savings and greater transparency
and efficiency in all processes. While large, centralized systems have been created to
manage the flow of goods and data, a single problem remains. This data can be
changed from its original form, causing some to feel the supply chain is not being fully
transparent with supplier, manufacturing and logistics processes. However, there is a
new type of technology on the block that possesses the potential to change how the
supply chain communicates and operates, blockchain technology.

Defining Blockchain Technology

Think about traditional supply chain functions in relation to payment processing and
order fulfillment. The payment is collected by a bank during a transaction. Now, the
only information the customer has access to is when a product may be shipped.

Through blockchain technology, the customer could gain access to more information
about where the product originated, which includes specific supplier information, by
tracking the blockchains along the path. In other words, blockchain technology allows
all participants in a given system have access to an equal about of information about
what went into producing and order a given product. This technology could be
leveraged by consumers to see how quickly a given product has been received and what
type of feedback is available.

Blockchain technology originated with the development of the payment system,

bitcoin. Rather than simply initiating changes between accounts, bitcoin goes a step
further by recording every motion in a long chain of events, explains Adrian Gonzales
of Talking Logistics. As a result, each transaction can be successfully traced back to its
point of origin, and the same process can be traced in a forward direction as well for
forecasting and customer-retention tracking.
The Impact of Blockchain Technology on the Supply Chain

The key benefits of blockchain technology can be summed up into seven primary
categories, which include the following:

1. Compliance and Transparency – Transparency is the most influential and

important benefit of blockchains. Blockchains will help to prevent organizational
silos within existing parts of the supply chain and help supply chain leadership, such
as C-level executives understand how to make the supply chain more efficient and
productive.
2. Better Tracking of Orders and Assets - Since blockchains can be effectively
tracked through all processes, companies using blockchain technology will be able to
more readily produce detailed information about a product’s lifecycle, including
supplier information, manufacturing details and logistics information.
3. Reduction in Errors in Payment Processing and Auditing – Regardless of
personal opinion, banks do make mistakes. Occasionally, auditing may not identify all
of the potential overbillings or overpayments as well. But, blockchain technology can
make reducing these errors easier by creating a finite paper-trail to isolate where the
problem occurred. Therefore, the company can verify all operating systems that were
effected and make changes to prevent the problem from occurring again.
4. Identification of Attempted Fraud More Easily – Even the most scrutinizing
audits can overlook indicators of fraud in mountains of data. However, blockchain
technology is already enabling today’s supply chain entities to identify attempted
fraud more easily. For example, an employee that goes into the system to change past
events will alter the coding of the event. However, the altered coding appears so
differently that it would be practically impossible to not notice the change This will
allow companies to recognize the fraud and who initiated the change almost
immediately, further driving down costs from poor employee practices or even
potential fraud attempts by customers. Furthermore, blockchain technology is not
patch-based, making it more secure than many of today’s cybersecurity initiatives,
explains Steve Banker of Logistics Viewpoints.
5. Greater Trust by Consumers – Customers trust what they can “see.” If a customer
knows where a product originated, they are more likely to develop a trusting
relationship with a given supply chain entity. However, this trust extends beyond
supplier information. It can show if a company provides realistic delivery
expectations for its truck drivers and more.
6. Real-Time Feedback From Consumers – The benefits of blockchain technology
also include how customers respond to products. For example, a customer may seek
to place future orders on produce when it drops below a specified rate after
purchasing food items that were prepared with produce from a given farm, as
explained by Reid Williams of Supply Chain 24/7. In addition, this feedback will be
connected to the information of the supplier and manufacturer, which will help the
supply chain create more accurate forecasts in real time.
7. Better Scalability – This benefit is actually a compounding benefit of real-time
feedback, but it is extremely important to denote how blockchain technology enables
scalability for parts of the supply chain. In other words, blockchain technology can
be used to identify potential trends and help an organization prepare to grow a
business to respond to possible surges in the market. Furthermore, the use of
blockchain technology is independent of politics, making it necessary for supply
chain entities entering new markets.

Putting It All Together

There are many different benefits of blockchain technology, and its implications range
from simple asset tracking and transparency to real-time feedback from customers. Yet,
the true scope of the benefits of blockchain technology is unlimited, and it could be one
of the most remarkable breakthroughs in the supply chain in history. With a world that is
becoming more connected on a daily basis, blockchain technology will inherently develop
into a symbiotic relationship with the Internet of Things and today’s advanced logistics
and supply chain management systems.
 Chapter Four

Supply Chain Applications

 4 Uses of Supply Chain Technology
Applications Moving Shippers into the
Future of Effective Management
In today's highly competitive marketplace, it’s imperative for businesses to innovate
new ways to streamline their supply chain and optimize productivity. With the aid of
modern supply chain technology applications, you can create better visibility within
your supply chain, which will enable you to have more control over your business and
stay ahead of the competition. Technology can help to simplify your supply chain
management, which will enable your business to operate more efficiently, give you
more visibility and control over your inventory, and help to reduce your operational
costs. Additionally, through a more stable and efficient supply chain, you can greatly
enhance customer satisfaction and retention. Here are just a few ways to integrate
modern supply chain technology applications into your business model and improve
your supply chain management.

1. Computerized Shipping and Tracking

With the aid of modern technologies and web-based software, like a transportation
management system (TMS), you can simplify the supply process and dramatically
reduce shipping errors. Utilizing systems like TMS, ERP, and even CRM enables savvy
business owners to consolidate all aspects of their supply chain in one place. The
software will allow you to digitally organize inventory data, monitor and manage
shipping, and tracking information, and create electronic bills of lading or invoices
with ease. Through the use of supply chain management technologies, you can greatly
reduce the time spent shipping, receiving, tracking, and compiling order data, which
will save your company both time and money.
Not only will the use of widely available supply chain technology applications
improve the operational efficiency of your supply chain, it will also greatly enhance
the customer experience by providing consumers with the ability to continuously
track the status of their orders. Through digitalized tracking, you can significantly
reduce shipping errors and more rapidly respond to the errors that do occur. In this
day and age, having technology is essential to running a thriving corporation that is
both business and consumer-friendly.

2. Radio Frequency Identification (RFID)

Radio Frequency Identification (RFID) is a vital piece of technology that can provide
innumerable benefits to the business owner. RFID chips are placed on every product
and provide a way for business owners to easily track their inventory. Due to the
increased visibility RFID chips provide, they will substantially improve your supply
chain efficiency by detecting any order anomalies as they occur, enabling employees to
immediately correct mistakes. In addition, it allows for easier and more consistent
tracking, enabling business owners to have maximum control and visibility over their
products at all times. Since RFID chips provide computerized product management,
they can eliminate the potential for errors, simplify the supply chain, and reduce
operating costs.

Radio frequency identification (RFID) has become one of the megatrends in logistics.
It is surprising then that despite the hundreds of millions of RFID tags sold this year
alone that, according to results from the 2014 GS1 US Standards Usage Survey, finally
saw the technology living up to the hype in the logistics industry in the last few years.

Here are only a few ways that RFID technology has changed, and is continuing to
change the not only the way we think about logistics, but also how interact with the
world around us. Check out the infographic below for all the facts! Source: Morai
Logistics

9 Facts About RFID Technology in Logistics & Supply Chain Management

Infographic (Next page)
3. Use Social Media to Streamline Supply Chain

Social media is a popular technology that has swept the world. With over 288 million
Twitter users and 1.23 billion Facebook users, it’s no wonder many businesses are
turning to social media to gain visibility for their company. In fact, over 70 percent of
all Fortune 500 companies rely on social media as part of their marketing strategy and
supply chain management. Through the use of social media, you can create more
open communication with customers, increase the visibility of your company,
improve the demand on your products, utilize cost-effective and time-efficient
marketing strategies, lower your operational costs, and enhance your company’s
overall productivity. Social media can be used to interact with customers, respond to
questions, report accidents or weather conditions that may impede delivery schedules,
and create automated updates about your inventory.

INFOGRAPHIC: Streamline Supply Chain Using Social Media (Next Page)

Social Media has been widely used in general business and marketing but the
application in supply chain management context seems to be lagging behind. As a
matter of fact, social media can be utilized to improve various aspects of supply chain
and business results can be achieved rapidly.

The purpose of this infographic is to illustrate 10 actions across 4 categories, namely,

- Supply chain event management - Relationship management - Supply chain
collaboration - Information technology Therefore, supply chain management
professionals should be able to implement these ideas immediately and gain the quick
win business results. Source: SupplyChainOpz.com.
4. Big Data Will Envelope and Empower all Other Supply Chain Technology
Applications

The scale, scope and depth of data supply chain technology applications are
generating today is accelerating, providing ample data sets to drive contextual
intelligence. The following graphic provides an overview of 52 different sources of
big data that are generated in supply chains Plotting the data sources by variety,
volume and velocity by the relative level of structured/unstructured data, it’s clear
that the majority of supply chain data is generated outside an enterprise. Forward-
thinking manufacturers are looking at big data as a catalyst for greater collaboration.
Source: Big Data Analytics in Supply Chain Management: Trends and Related
Research. Presented at 6th International Conference on Operations and Supply Chain
Management, Bali, 2014
Big Data also allows more complex supplier networks that focus on knowledge
sharing and collaboration as the value-add over just completing transactions. Big data
is revolutionizing how supplier networks form, grow, proliferate into new markets and
mature over time. Transactions aren’t the only goal, creating knowledge-sharing
networks is, based on the insights gained from big data analytics. The following
graphic from Business Ecosystems Come Of Age (Deloitte University Press) (free, no
opt-in) illustrates the progression of supply chains from networks or webs, where
knowledge sharing becomes a priority.
Simplify Your Supply Chain with Supply Chain Technology Applications

The more links there are in your supply chain, the more convoluted and complex that
chain becomes. By simplifying the supply chain and disposing of unnecessary links,
you can improve efficiency and reduce expenditures. Work directly with the
manufacturers whenever possible, rather than purchasing through an intermediary
source. By working directly with the manufacturers, you can greatly reduce expenses
and create a simpler and more efficient supply chain. Reducing the links in your
supply chain will also enable you to lower the risks associated with shipping and
receiving. Given shipping and other functions of the supply chain are contingent on
such factors as weather, international border security, economic collapse, and natural
disasters, simplifying how you accurately combine supply chain technology
applications with data as much as possible in your analysis of suppliers to include
vendors, shipping partners, and more, will improve the reliability and efficiency of
your supply chain and leave your business less vulnerable to unforeseen disaster.

In order to improve as a business, it’s essential to continually adapt to emerging

supply chain technology applications in order to stay ahead of the competition. By
integrating modern technologies into your business plan, you can greatly enhance
your productivity as a company while cutting costs and improving customer
satisfaction and client retention. Customers will likely be turned off of a business that
routinely has shipping delays, shipping errors, or products that are out of stock.
Enhancing your supply chain can minimize risk and improve your reputability in the
eyes of the public.
New Supply Chain Technology: The Real
Cost of Inaction

Knowing when it's time to invest in new supply chain technology for your business is
sometimes easy—a system fails, or you have a new line of business that requires a
change.

But other opportunities for a tech upgrade may be lost if you are not specifically
looking for ways to improve operations. When business is ticking along, issues getting
managed and deliverables being met on time, why look any further?

There are actually several reasons why you should always be on the lookout for ways
to improve operations through better technology.

First, it will keep you ahead of the competition.

Second, it will enable more efficient operations, which translates to better bottom-line
results and the ability to take on more business without the growing pains that a less
up-to-date company will suffer.

Third, advances in information technology over the past few years have come so far
and so fast that not keeping up with the opportunities they afford can put your
business in jeopardy. There can be a significant opportunity cost in failing to make
smart tech investments.

Barriers

But unfortunately, not everybody understands the importance of what is essentially a

constant process of renewal. There are a number of barriers—some real, some
imagined—to tech acquisition.
First is the "if it ain't broke, don't fix it" attitude. The logic is simple—if a process or
solution is doing an adequate job, then there's no reason to spend the money to
upgrade it.

While the desire to leave well-enough alone is understandable, this approach can lead
to poor decision making and can result in the waste of resources. For example, if your
systems are working, but you are having to add extra personnel hours to make them
work, or they require elaborate work-arounds that have evolved over the years, are you
really being efficient?

Chances are there is a better solution available.

The second principal argument managers make against getting the upgrade path is the
notion that new supply chain technology requires a huge upfront investment and
serious, long-term commitment. This is no longer the case. Businesses have choices
now, and with cloud-based applications available for a monthly service fee, the initial
investment is minimal, and the risk of committing to software that's not quite right is
also diminished.

The cost of the status quo

Ignoring the potential of new supply chain technology to improve your business
operations is like keeping your head in the sand. It's nice and quiet, even though there
could be an apocalypse going on around you.

While your head is buried down there, bad things could happen to your bottom—and
bottom line—while it's left sticking up in the air. In other words, you could be
exposing yourself to numerous risks.

If you are making operational decisions based on data that's not in sync with current
realities, you'll be unable to predict demand and trends that will affect your ability to
respond to market changes. (1)

As well, you are potentially missing out on whole new worlds of efficiencies that new
supply chain technologies are delivering.
And, to make matters worse, you are sitting on a potentially very costly IT upgrade if
your old system fails before it can be replaced with proper planning. [1]

Be brave…and reap the rewards

While it's easy to continue doing things the way you always have, just because it's comfy,
you are running a big risk of being left behind by more proactive competitors. You also
leave yourself open to the potential nasty surprise of learning how much money you
were actually wasting while you thought you were saving by avoiding outlays on IT.

Take a hard look at your processes. Better yet, get an outsider (an analyst) to take a
look—someone who doesn't know the workarounds. Research what your competitors
are doing.

In the current market, where speed, accuracy and constant evolution are the benchmarks
for business success, you may be managing, but can you advance? If your systems don't
position you for agility and efficiency you need to take another look.

Just because it's working, doesn't mean it couldn't be better. Don't be afraid of new
tech—learn about what it can do for you. And do the cost-benefit analysis. You may be
very pleasantly surprised by what you find in a modernization scenario.

As the Business Development bank of Canada noted in a recent blog: "Technology is

changing our world and ratcheting up the competition on your business. You can make
up for lost ground and win the race, but you’ll need to invest to compete and seize new
opportunities." [2]

1. "When should you invest in new technology", http://bpanalytics.com/when-should-you-invest-in-new-technology/

2. Pierre Cleroux, Technology: An opportunity not to be missed. BDC blog,
https://www.bdc.ca/en/blog/pages/technology_opportunity_not_be_missed.aspx
3. Larry Alton "How to Know When to Invest in New Small Business Technology" March 06, 2015;
http://www.smallbusinesscomputing.com/News/ITManagement/how-to-know-when-to-invest-in-new-small-
business-technology.html
Top 5 Trends to Know to Compete with
Amazon’s Supply Chain
Aside from the new administration, Amazon’s supply chain continued push deeper
into new and existing markets will define additional trends in the supply chain
throughout the coming year. While supply chain entities struggle to stay competitive
with the e-commerce giant, more organizations will look for ways to eliminate
inefficiencies and boost operations. Fortunately, these five trends may alleviate some
of the strains of competition by giving supply chain partners an advantage in the
global market.

Top 5 Trends to Know to Compete with Amazon’s Supply Chain

1. Robotics Will Grow More Versatile.

Amazon’s purchase of Kiva Robots changed the landscape of robotics in the supply
chain. However, new companies are being created and developed to fill the void. The
robotics company, Starship, released a robot that delivers meals and groceries to
people in Euro metro markets. Meanwhile, Lowe’s has created the LoweBot, which
boosts customer service, explains Dan Gilmore of Supply Chain Digest.

More companies are turning to robotics to find new ways to bridge the divide
between a dwindling number of customer service representatives, including store
associates, and maintaining around-the-clock operations. Across the spectrum,
robotics will become more versatile and accessible. In other words, robots will gain
new movements, capable of picking items from shelves in warehouses and
storefronts.

Per IDC Manufacturing Insights, the use of robotics will become more platform
based through robot-as-a-service, reducing costs of deployment and maintenance.
Furthermore, the speed of operation of robots will increase more than 30 percent by
the end of 2017. Clearly, robotics will become more important in 2017 than during
any previous year.
2. Technology Will Reshape Procurement Practices.

Better procurement practices translate into better overall sales, but the role of
procurement in driving sales’ statistics will change throughout 2017. Today,
procurement drives up to 67 percent of sales, explains Johnathan Webb of Forbes
magazine, as procurement professionals look for innovative ways to produce effective,
superior products.

For example, Johnson & Johnson procurement professionals actively review market
trends before making purchases. Upon identifying these trends, a correct forecast of
supply demands can be generated. Thus, the role of procurement has become more
focused on being physically involved in market news and research, not just signing
purchase orders in an office.

3. More Businesses Will Create E-Commerce Platforms.

Amazon’s supply chain empowered the e-commerce market by giving everyone an

opportunity to sell their goods online, which has made competing with Amazon
difficult at best. Amazon’s supply chain expansion culminated in more companies
looking to enter e-commerce without giving shares to Amazon. Companies expanded
e-commerce and omnichannel solutions simultaneously as well, reports Steve Banker
of Logistics Viewpoints.

For example, Walmart and Kmart redesigned their mobile e-commerce interface for
consumers, making shopping and purchasing online easier and integrated with major
companies. A simple search for a product on Walmart.com reveals partnered listings
with Wayfair and third-party sellers, much like Amazon’s current vendor options.
Moreover, customers can make purchases online and have them shipped to the store
or their home. At Walmart, customers can even pick up orders without ever getting
off the car now. Ultimately, more businesses will seek out partnerships with bigger
companies to stay competitive with Amazon’s bare price points and ease of use.
4. User Preferences Will Enhance Mobile Management Systems.

Traditional warehouse management systems (WMS) lacked integration with other

systems. Procurement strategy was not always evident. Accessibility of systems
depended on in-house IT departments, and upgrading access terminals could cause
extreme delays and problems in operations. However, newer management systems,
such as a comprehensive transportation management system (TMS) that integrates
warehouse management with transportation management, are starting to offer more
accessibility and personalization options.

In other words, accessibility and personalization allows warehouse managers and staff
members to define metrics relevant to new products and current operations, test new
processes and effectively manage the flow of goods. Similarly, new mobile options,
ranging from Android tablets to compact barcode scanners will reduce inconsistencies
and errors across the supply chain, explains IRMS 360. Paired with the advancements
of predictive analytics and the Industrial Internet of Things (IIoT), more data will
result in more efficient processes, creating a positive feedback loop throughout an
organization.

5. Contingency Planning Will Become a Standard Practice.

Amazon’s supply chain has proven that not planning will result in the failure of small
and medium-sized businesses. Furthermore, natural disasters reap $211 billion from
the global supply chain annually. Having a larger global footprint is how Amazon’s
supply chain has been able to maintain operations in the face of natural or manmade
disasters. This is contingency planning.

The IIoT empowers contingency planning by giving supply chain entities real-time
data from an endless number of sources, which range from online browsing data to
point-of-sale data. Consequently, supply chains can react appropriately and divert
resources to maintain operations. But, the key to utilizing this information lies in
knowing what to do and how to do it when an event occurs. In other words, more
companies will diversify distribution, supplier and storage networks throughout 2017
to prepare for what might happen in the future.
The Big Picture.

Supply chains must accept that they cannot equal the power of Amazon’s supply
chain without embracing these new trends. New technologies are great, but chances
are Amazon has already implemented them. Rather than falling into despair, you can
use these trends to re-evaluate processes and practices in your organization, which
will help you stay competitive with Amazon and overcome the possible challenges of
the new administration.

The complexities of the global supply chain rely on your willingness to take advantage
of new trends and technologies today, as well as tomorrow, so do not squander this
opportunity.
 5 Key Supply Chain Technologies
Needed to Go Omnichannel
More companies are actively engaging with consumers in search of the ultimate
omnichannel sales experience as the strength of online sales increase, reports Supply
Chain Quarterly. Unlike traditional supply chains, omnichannel supply chains rely on
the successful integration and application of data, process standardization and high-
tech tools to ensure a seamless flow of information and products. As a result,
companies that want to go omnichannel need to begin working to deploy these
standards and supply chain technologies.

Automated Data Capture and Item Tracking.

The first toward implementing an omnichannel supply chain strategy is automation.

Due to sheer volume and scale of operations, systems must use automation to capture
data and details about every product movement and action. Technologies used in this
step include handheld device scanners, automated radio frequency identification tags,
Bluetooth technologies and automated identification and data capture (AIDC),
comparable to RFID tags. The options are limitless, but the key lies in automating the
collection of information into a central location, like the cloud.

Analytics to Uncover Issues in the Supply Chain.

Second, organizations working toward omnichannel sales should leverage the power
of data through advanced analytics systems. These software platforms can compare
data points, aggregate details that appear unrelated and define key ways to improve
operations, asserts Michael Unger and Silvia Bernardini of Supply & Demand Chain
Executive.
Strong Integration Among Systems in All Channels.

Both previous steps are useless unless all systems used in the supply chain
communicate and are integrated together. This ensures one part of the supply chain
does not dominate and undermine the success of other channels. In other words,
strong integration between warehouse management, transportation, and billing
systems is essential to encouraging a cyclic flow of products to give consumers what
they want.

Modeling Systems to Simulate Possible Product Pathways.

Next, modeling is essential to the development of an omnichannel sales supply chain.

Modeling gives companies the opportunity to run scenarios based on changes in
consumer buying trends and habits. As a result, companies can move products in
areas where greater demand is expected. In a way, this is similar to just-in-time
delivery and real-time inventory management and control.

Strong CRM Tools That Integrate Data Across Enterprise-Wide Supply Chain
Technologies

The final piece of the puzzle involves providing an extra layer of service to
consumers. Customer relationship management (CRM) tools must have the capacity
to access and utilize data from across the supply chain. Furthermore, such data must
be readily available to appropriate users. For example, consumers should be able to
see how long an item may take to ship against purchasing it in the store. In turn,
customer service reps must also have access to such information.

The Big Picture.

Creating a strong omnichannel supply chain is made possible through modern supply
chain technologies. By deploying these technologies, enhancing collaboration and
ensuring optimal visibility across the supply chain, companies can achieve
omnichannel status.
Omnichannel Logistics Solutions Takes
the Supply Chain To The Next Level

How technology in logistics grew throughout 2016 is not limited to the technology
that delivers products or enables better, faster picking processes. Over the last year,
huge strides were made in machine-to-machine connectivity, as foreseen by our
predictions, ranging from the greater use of automated identification and data capture
(AIDC) and stronger resolve for more omnichannel logistics solutions.

Many of these advancements were expected to bring substantial investment into

supply chains, and they did just that. But, you need to understand where the
investments focused, how they relate to improving supply chains and why they are
essential to omnichannel logistics solutions.

How Machines “Talk” Expanded.

Machines “talking” to one another is not a new concept. But, the amount of
investment being poured into machine-to-machine connectivity is surpassing
expectations. By some accounts, overall spending on connected logistics solutions
globally exceeded $7 billion, and more than $13 billion will be pumped into this
supply chain powerhouse by 2020, explains Andrew Meola of Business Insider. The
real scope of investment into connected devices can be seen in the following graph:
This increasing level of connectivity was driven by three critical types of
sensors and data processing, which include the following:

• RFID sensors found a place among large shipments. Radio frequency

identification (RFID) tags were expected to become commonplace among
individual shipments in 2016. However, their use felt some restraint, and most
companies used them to track large-scale shipments, such as cargo containers,
reports Claire Swedbery of the RFID Journal. Additionally, these sensors were
used to help monitor temperature changes and ensure the best conditions
possible for shipment.
• AIDC communications reduced workload, making tracking items and using
analytics easier than ever. Part of the problem with the large-scale
implementation of machine-to-machine connected devices was data capture. In
other words, someone had to scan and enter information physically. However,
AIDC tools are making analytics in the supply chain an affordable reality. More
importantly, they have eliminated the chance for error from manual entry
systems, explains Nicole Pontius of Business.com, so the accuracy of data is
helping to produce superior results and recommendations.
• IoT-based tech spending saw a huge boost, becoming synonymous with
improvements. IoT-enabled devices grew even more in 2016 than anyone
expected. However, these devices are not only monitoring and reporting on
events; they are responding to events in real time. When applied to the supply
chain, this is the Industrial Internet of Things (IIoT). It is eliminating
bottlenecks in the supply chain, ensuring maintenance is kept up-to-date and
verifying the operability of all equipment, reports Jenipher Wang, Ph.D. of the
WIOMAX SmartIoT Blog.

Bluetooth Technologies Got a Real Seat at the Supply Chain Dinner Table.

Bluetooth technologies offered to solve a major concern inherent in the use of

connected devices, internet bandwidth, and usage. Bluetooth technologies do not
require an active internet connection to function, so their feasibility seemed ideal
when shipments are traversing seas or remote areas. There would still need to be
some data capture and processing, which is why this trend fell into alignment with
the other main technology trends in logistics. Essentially, information capture did
not have to rely on the immediate availability of the internet, but it still benefited
from it when available.

GPS is great, but Bluetooth enables users to access practically any information
necessary, provided the right sensors are in place. Per Link Labs, Bluetooth-enabled
devices can take advantage of both WiFi signals and GPS-based information to
produce a more accurate report on a shipment. However, the widespread use of
Bluetooth still relies on some hub, such as central communications network.
Now, Bluetooth might seem like the distant cousin to the IIoT, but it has the
potential to change how companies operate. Bluetooth devices are inherently low
energy, meaning they would require less charging time, which reduces overhead for
supply chain operations. Meanwhile, communication distances of more than 200 feet
are ideal for increasing visibility in warehouse operations. This has led more
companies to adopt Bluetooth as they look for cost-effective, IoT-enabled solutions.
It may not be the best when away from the “hub,” reports Go Pigeon, but Bluetooth
has apparently found its spot at the supply chain dinner table.

Customers Pushed For More OmniChannel Logistics Solutions, and They

Got It.

The past few years have seen a steady push for more omnichannel logistics solutions,
such as online or in-store returns, purchasing or shipping. Powered by cloud-based
technologies and advanced automated protocol integration (API), consumers’
demand for omnichannel logistics solutions was stronger in 2016 than ever before.
More interestingly, companies saw this demand and answered the call.

Walmart launched a pick-up service, allowing customers to shop online and simply
drive up to get their orders. K-Mart launched an innovative app to give customers
more options, and business-to-business service got a bigger omnichannel share with
Amazon Business. Considering Amazon’s promise of next-day delivery, the
opportunities through omnichannel logistics solutions are growing stronger. Now,
consumers can return products to Amazon stores, and recently, Amazon launched a
no-employee grocery store, Amazon Go, in Seattle.

The power of shopping anywhere, anytime and without the hassle of cashiers and
registers was proven in 2016, and 2017 will likely be a year of greater innovation.
Ultimately, eCommerce best practices, such as striving for two-day shipping, are no
longer relevant. For supply chains to stay competitive, logistics operations must be
willing to shoot for nothing less than perfection with delivery times that are only
rivaled by the speed of an internet connection. Take a look at how Business Insider
reported the standard beliefs in “fast shipping.”
What Does It Mean For 2017?

The demand on logistics for better, stronger and faster operations will continue to grow in
2017. If 2016’s advancements are any indication, this year could be a year for the record
books. Robotics are surging, IIoT-enabled devices and machine-to-machine connectivity are
ready to take on the brunt of the work, but the next wave of innovation could come from
anywhere.

It could be a new way of looking at logistics operations entirely, placing trust in a cloud-based
system that is built on software-as-a-service (SaaS) that could replace the standard TMS
model. Alternatively, 2017 could foreshadow a transition of power between logistics
companies and the autonomous controls being developed. Only time will tell, but technology
will continue to march forward and bring society into a new realization of what it means to
get what you want when you want it and at the right cost.
CONCLUSION
Companies Are Reviewing Supply Chain
Management Initiatives

Supply chain functions and processes are capable of addressing many of the
problems faced by today’s supply chain. Outdated technology needs to be replaced,
which will allow faster processing and delivery times for consumers. Since each
moment a shipment is in transit reflects the overall cost of shipping, consumer
demand will be more easily met when new technology is fully utilized.

Additionally, today’s supply chain entities are re-evaluating their current operations to
determine what can be enhanced. Although up to 48 percent of all supply chain
transactions use non-digital, manual processes, reports GT Nexus, one-third of
manufacturers are actively looking for ways to make their supply chain more digital.

The Digital Supply Chain Has Arrived.

The digital supply chain is being used to improve compliance with all local, state and
federal regulations. This also applies to international supply chain processes.
Concurrently, Big Data is helping supply chain entities learn how manage their overall
operations more efficiently, which includes further expansion into the omni-channel
economy.

Yet, the relative problems of today’s supply chain can also be traced back to a benefit
and opportunity in today’s global economy—the cloud. Cloud computing
technologies are giving small and medium businesses the opportunity to enter a global
supply chain without the extraordinary investments that major players have always
had to make. Essentially, the level playing field is distributing the abilities of the
supply chain to a larger number of participants, which makes the average growth
seem less than what is actually taking place. Ultimately, growth is occurring even
though it may not be as evident as some would expect.
Cerasis, a transportation management company founded in 1997, has always believed in the use
of technology to improve process to not only reduce cost but to stay strategic, competitive, and
have the ability to use data from technology to continually improve. In fact, one of our core
values is just that: continuous improvement of our people process and technology.

We built our Cerasis Rater TMS in 1998, launching it as web-based before Google was even a
business. Our (now Army, as our Development Manager, Jerel Byrd calls them) development
team are always continually improving the Cerasis TMS, as we know it is vital to have a system
that is not only innovative, but sound, secure, and enables those in transportation to do their job
all while doing it cost effectively.

Are you using a TMS to help manage your transportation department as a shipper? What are
you seeing in the space?

In addition to our transportation management system (TMS), the Cerasis Rater, when you are a
Cerasis shipper, you gain access to the following managed services:

• Transportation Accounting to include: Invoice auditing, one weekly invoice no matter how
many shipments, and freight payment services
• Comprehensive end to end freight claims management: if your freight is damaged or lost,
we will handle the freight claim on your behalf
• Carrier Relations: We will negotiate rates on your behalf and you get better rates thanks to
our buying power
• Inbound Freight Management
• Reverse Logistics
• Robust Analytics and Reports
• Small Package/Parcel Auditing
• Small Package/Parcel Contract Negotiation
• Warehousing
• International
• & More!

Want to learn more? Visit http://cerasis.com

Get a Demo of our TMS or Inquire
About Our Services

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