Recent Developments In The Field Of SCM

Swathi Krishna M R

B Batch
Reg No. 37121123
School of Management Studies
CUSAT, Kochi – 22
E-mail: Swathikrishnamr@pg.cusat.ac.in

Abstract: The current trends in supply chain management can also be useful tools to
strengthen the supply chain and make it more agile and resilient. Technology integration is
the key to future supply chain success which is why so many firms are digitally transforming
their operations. Supply chain management will continue to face disruptions in 2022 and
beyond. The repercussions of the pandemic continue, which makes supply chain innovation
and evolution more important than ever. One of the biggest challenges threatening the
integrity of SCM is the cost of goods and the cost of shipping. New technology, like robotic
process automation (RPA), cloud computing and artificial intelligence (AI), replaces weak
links and alters the supply chain software market at large.
Keywords: Supply Chain Management, Digitization, AI, IOT, Blockchain,

1.0 INTRODUCTION

From the first assembly lines to today’s advanced robotic solutions, the supply chain process is constantly
evolving. The latest trends in supply chain and logistics focus on smart, tech-driven management to reduce
operating expenses and increase efficiency. Originated with the military as a way to supply troops with
weapons and other goods needed for combat, logistics later evolved into a business concept. This was
mainly prompted by the growing demands and complexity of the supply chain process, including
transportation of large quantities of goods to distant locations, in line with the globalization of trade.
Keeping all supply chain components running as smoothly as possible ensures that your business can
provide on-time delivery of products and services, especially with changing consumer demands and
supply chain disruptions brought about by the COVID-19 pandemic.The logistics and supply chain aspect
is vital for any business in terms of supply of quality raw materials, efficient manufacturing process, as well
as tracking, transport and storage of the finished goods. Companies implementing well-designed supply
chain practices are able to meet consumer needs in a more expeditious and timely manner.This strengthens
customer relationships and loyalty, translating into revenue boost and acquisition of new customers
through positive word of mouth.By staying on top of supply chain management trends and issues, one can
make sure that your company can readily adapt to these changes.Responding to supply chain disruption
requires more than sophisticated software. It also requires a well-trained and well-managed team that’s up
to the challenge. As labor shortages continue to rise, it’s becoming more imperative than ever for
manufacturing leaders to refine their approach to talent management and retention. In addition to investing
in new-hire training, this may also mean investing in better pay and benefits for current employees. It also
means looking for strategic skills during the hiring process, such as experience in data analytics and
machine learning.
 Fig 1 Key Supply chain Trends

These are the top supply chain management trends as we move through the next few years:

1.Supply chain digitization

Digitization refers to the practice of putting information into a digital format Digitization is
the process of using the latest tech solutions together with other physical and digital assets
to redesign logistics practices. This way, they can adjust better to the fast-paced, highly
competitive, omni-channel business environment.When it comes to securing the future of
the supply chain, digitization is non-negotiable. Experts believe that effective supply chain
digitization can make your entire supply chain more streamlined, mobile, and resilient — all
of which are highly beneficial for your organization’s bottom line. This is also a major trend
in e-SCM or Electronic Supply Chain Management.
Digitization improves the speed, dynamics and resiliency of the supply chain operations,
leading to greater customer responsiveness and ultimately higher revenue. By embracing
digitalization, companies can experience real value, increased revenue and market
valuation.
In order to reap the full benefits of digitalization, companies must fundamentally redesign
their supply chain strategy. It’s not enough to just embellish it with digital technology.In the
field of digitization, the Internet of Things (IoT) holds a prominent place as a highly
transformative technological solution in the logistics sphere. IoT refers to a system of
interrelated computing devices allowing transfer of data over networks without human
input. It helps companies monitor inventory, manage warehouse stock, optimize fleet routes,
and reduce dead mileage.

Supply chain digital twin

A supply chain digital twin is a virtual simulation model of a real supply chain used to
analyze supply chain dynamics and predict process success. DT models benefit from real-
time data and snapshots of planned and released work orders, sales orders, pending
approvals, demand and supply. The data is gathered from sources like:

• IoT devices (e.g. sensors)

• Logistics and transportation databases
• Operations databases
• Vendor information (e.g. CRM data, bills, invoices)
• User experiences (e.g. online reviews, customer service tickets)
To collect customer experience data, supply chain managers can rely on web scrapers to pull
real-time data from online resources such as business or competitor websites, online listings,
and analyst reviews.

Fig 2 Supply chain Digital twin

Digital twins help analysts understand a supply chain’s behavior, predict unusual situations,
and provide an action plan to reduce costs and improve efficiency of processes.

1. Optimize overall supply chain processes

A digital twin can help businesses understand patterns, and model the outcome of
modifications in different processes for:

Improving design tests of supply chain process: DT models in supply chain moderate
business continuity and transformation risks before they occur by outcome prediction. The
models enable calculating benefits, savings, and potential ROI before the transformation of
the process occurs. For example, a business generates DT models to redefine the global
operations by simulating various scenarios that include data related to manufacturing,
inventory and product distribution.
Monitoring risk and testing probabilities: DT allows supply chain companies to test and
discover the best course of action for emergencies, and try different scenarios in a virtual
environment, significantly improving organizational stability.
2. Identify bottlenecks
DT provides a perpetual, end-to-end view of processes and bottlenecks across the supply
chain, facilitating more agile problem resolution with minor human intervention. By
collecting data, digital twins help to identify potential weaknesses in all aspects of delivery.
For example, a shipment digital twin will rely on data gathered from sensors which transmit
updated data during shipment, and can be analyzed to spot performance and bottlenecks
during transportations and delivery trips.

3. Plan transportation and facilities

A digital twin can assess how changes in demand and supply affect the supply chain’s
physical locations and supporting system while delivering products and services to end
customers. By leveraging real-time data, digital twins enable supply chain management to
better plan transportation resources.

4. Optimize inventory
A supply chain digital twin can input data from demand forecasting processes to avoid
stock-outs and minimize overall costs of production and warehousing. As a result, it
addresses the “single-echelon” challenge (optimizing inventory in a single warehouse) and
the “multi-echelon” challenge (optimizing inventory across the entire network).

5. Predict the performance of packaging materials

When applied to packaging, digital twins can simulate package shapes and packaging
material in order to test for defects before deploying them, which does not only decrease the
financial but also environmental cost.

2. Blockchain

Supply chain visibility remains a top concern for most companies today, so it’s not surprising
that more businesses will be looking to integrate blockchain technology into their supply
chains. Blockchain technology can help make the entire supply chain more transparent to
minimize disruptions and improve customer service. Through blockchain, all components
of the supply chain can be integrated into a single platform.

Fig 3 Driving value in supply chain

Carriers, shipping lines, forwarders, and logistics providers can use the same platform to
update companies and customers of the product journey. Invoicing and payments can be
made from the same system, too. This integration streamlines the entire supply chain and
helps supply chain managers to identify issues before they occur. Blockchain also provides
unparalleled protection for information, as the technology’s decentralization methodology
protects data from being edited. All users must agree to updates or edits to the data before
they’re implemented.Blockchain can provide increased supply chain transparency, as well
as reduced cost and risk across the supply chain. Furthermore, businesses can maintain more
control over outsourced contract manufacturing. Blockchain provides all parties within a
respective supply chain with access to the same information, potentially reducing
communication or transfer data errors. Less time can be spent validating data and more can
be spent on delivering goods and services—either improving quality, reducing cost, or both.

Finally, blockchain can streamline administrative processes and reduce costs by enabling an
effective audit of supply chain data. Processes involving manual checks for compliance or
credit purposes that may currently take weeks can be accelerated through a distributed
ledger of all relevant information.Specifically, blockchain supply chain innovations can
deliver the following key benefits:

Primary potential benefits

• Increase traceability of material supply chain to ensure corporate standards are met
• Lower losses from counterfeit/gray market trading
• Improve visibility and compliance over outsourced contract manufacturing
• Reduce paperwork and administrative costs
Secondary potential benefits

• Strengthen corporate reputation through providing transparency of materials used

in products
• Improve creditability and public trust of data shared
• Reduce potential public relations risk from supply chain malpractice
• Engage stakeholders

3. Supply Chain as a Service (SCaaS)

Many companies today handle their supply chain activities in-house. Still, we may see more
businesses adopting ‘Supply Chain as a Service’ or SCaaS business models and outsourcing
activities like manufacturing, logistics, and inventory management. Companies’ supply
chain management teams will soon evolve to become a smaller group of skilled individuals
focused on making strategic decisions to improve the supply chain.With value chains
becoming more complex, handling all of your supply chain processes in-house is nearly
impossible. Switching from manual processes to a digital environment, leveraging large
amounts of IoT-enabled devices, analyzing data and maintenance will become necessary
things that require skilled manipulation and maintenance. Likewise, technology has
innovated support for SCM. Supply chain technologies will soon be available “on tap.”
Originally seen in SaaS software, this method allows companies to reduce overhead
spending by avoiding fixed costs in infrastructure, upgrades, and maintenance.

4. Circular Supply Chains

The term “linear supply chain” refers to the conventional concept where goods flow linearly
(from raw material to finished product). Modern logistics practices focus on the circular
supply chain concept, involving the use of previously used products as raw materials. The
reuse of products and materials is known as reverse logistics, and it is a novel, innovative
approach. It helps companies reduce administrative and transportation costs, achieve higher
sustainability, better customer service and loyalty, create value and conserve resources.
Used products can be kept in circulation through good cooperation between companies and
their suppliers and customers.
Linear supply chains will soon be replaced by circular supply chains, where manufacturers
refurbish discarded products for resale .To deal with the rising costs of raw materials and
their volatile availability, many companies are opting to break down their products and turn
them back into their raw material form.
Looping the supply chain can help cut down costs, past the initial costs of putting new
processes in place. With a circular supply chain, companies can spend less on raw materials
and, in turn, enjoy a reduced risk of price volatility. Moreover, a circular supply chain creates
less waste, helping companies reduce their overall impact on the environment. Stricter
government regulations on recycling and waste disposal also push companies to consider
adopting the circular supply chain. Businesses with sustainable practices may also stand to
gain incentives for their efforts, not only from the government but also from consumers, a
majority of whom prefer environmentally friendly products

Fig 4 Circular supply chain

5. Cloud-based Solutions

Similar to digitization, cloud-based software solutions are the way of the future in supply
chain management. Traditional and localized supply chain management solutions won’t cut
it. To stay competitive, you need accurate, agile, and accessible solutions for your
organization. Software-as-a-Service (SaaS) models are beneficial for supply chain
management. Not only is SaaS reliable and secure, but it’s highly efficient and convenient.
All of your organization’s data is stored in the cloud, and you and your team can get the
information you need at any time, from any place. With a global and digital supply chain,
the efficiency provided by SaaS solutions is crucial to support your organization as you move
into an increasingly fast-paced future.As these trends continue to evolve, so too will the art
of supply chain management. New developments will lead to unforeseen consequences,
both positive and negative. To stay up-to-date and position your organization for success,
you need to anticipate and continue to adapt to unforseen changes in the future.

6. The Internet of Things

Aside from blockchain, more companies are implementing IoT devices to enhance the
visibility of their supply chains. For instance, airplanes, trucks, and other modes of
transportation can be fitted with sensors, which provide live tracking updates on shipping
and delivery. IoT technology in warehouses and retail outlets can also improve visibility in
production, inventory management, and predictive maintenance. Companies can use all this
real-time information to proactively service customer demands, minimize downtime, and
increase the supply chain’s overall efficiency. By increasing visibility across components of
the supply chain, IoT devices can also help businesses optimize their assets and ROI.
Creating a digital supply network aligned with one’s business strategy and with risk
management procedures in place will help companies to build resilience to mitigate the
impact of disruptive events like the COVID-19 pandemic. Many businesses will also leverage
the power of IoT by integrating the technology with core business applications such as
business intelligence software. These integrations will enable analytics for the information
gathered by IoT devices, allowing companies to make data-driven decisions on supply chain
strategies.The Internet of Things (IoT) is a network of physical objects that, powered by a
wireless network, are digitally connected and accessible from anywhere. The IoT already
plays a significant role in the supply chain — particularly when it comes to logistics — but
with increasingly diverse applications, IoT will likely continue to grow in importance.
Research indicates that there will be more than 25.4 billion IoT devices by the year 2030.In
addition to providing more oversight in operations and transportation, IoT can be used to
improve warehouse management, fleet tracking, inventory control, and even technological
and mechanical maintenance. IoT technology can even be used to create smart warehouses
and fleets that increase efficiency and data accuracy in multiple areas of your supply chain.
The value of the IoT cannot be overstated and it’s not going away — according to McKinsey
Digital, every second, 127 devices connected to the internet for the first time. Depending on
what kinds of IoT devices you have, you can use them in conjunction with other pieces of
technology for even greater benefit. For instance, the information collected by a sensor in one
of your warehouses could provide valuable data that helps you automate other processes,
such as forecasting and asset tracking. This high level of integration is essential as supply
chains become increasingly digital.

7. Robots and Automation

The use of artificial intelligence (AI) and automation is on the rise in many industries.
Automation, which has been around for decades, utilizes technology to minimize human
inputs and is simply a machine performing a series of tasks. Automation isn’t intelligent,
which means the tech only performs tasks that it has been explicitly programmed to perform.
Artificial intelligence (AI) on the other hand, attempts to mimic aspects of human
intelligence and can “learn” on its own to assist with more complex, challenging tasks. AI
still requires some human input, but also leverages machine learning to determine the next
steps on its own, without explicit human direction. Advanced AI solutions have numerous
applications in the supply chain, especially the warehousing segment. This includes use of
gesture recognition solutions instead of keyboards and mice in the procurement process. It
also includes autonomous vehicles (self-driving cars), designed to navigate without human
input.
The concept of robotics and automation is also widely implemented in the supply chain. The
latest generations of robots are easier to program, more flexible and affordable. Their role is
to assist workers with repetitive and physically challenging tasks. SCM encompasses a broad
range of activities and requires excellent attention to detail. This is why most enterprise
resource planning software are designed with modules and features dedicated to SCM.
Through the software, managers can optimize supply chains, keep them running as
smoothly as possible, and prevent disruptions that affect customer service.
In a world where speed and precision are crucial for success, both AI and automation are
valuable tools that can speed up your supply chain and remain competitive in your niche. If
you don’t use them, your competitors will, and leave you behind as they enjoy greater levels
of success. And whether or not you use AI – you should be streamlining your supply chain
for the good of the business– “79% of companies with high-performing supply chains
achieve revenue growth greater than the average within their industries whereas businesses
with optimized supply chains have 15% lower supply chain costs, less than 50% of inventory
holdings and 3X faster cash to cash cycles.”From making improvements to your assembly
line to powering digital twin technology and everything in between, there are many ways to
incorporate AI and automation into your organization’s workflow. For supply chain
management processes, consider utilizing AI-based software for intelligent sourcing,
inventory management, and even logistical routes. The key is finding tasks and processes
that will help you save time or energy; often, the most suitable tasks are time-consuming or
complicated. By automating these kinds of tasks, one can spend more time on projects that
only a human can do, and get an even greater return on this investment.
Robotics currently play a huge role in transforming supply chains and SCM. During the first
half of 2019 alone, North American companies spent $869 million on more than 16, 400
robots.

More companies today are using drones and driverless vehicles to streamline logistics
operations. Companies and consumers can expect drones to become fully capable of making
deliveries of small goods. Self-driving cars are also likely to be more advanced by 2020, with
capabilities to make automated traffic decisions.In warehouses, autonomous mobile robots
will see more use in speeding up menial, labor-intensive tasks. Combined with efficient
warehouse management software, robots can drastically improve the supply chain’s
productivity.The growing use of robots and robotic processes automation software,
however, does not end in the replacement of humans. The technology is intended to augment
human efforts by speeding up simple, repetitive tasks. By relegating these tasks to machines,
human workers can focus on higher-value tasks that have a more direct effect on business
growth and customer experience.

8. Automation Through AI, AR, and VR

Artificial intelligence (AI) will also play an essential role in making supply chains more
efficient (Toward Data Science, 2019). The technology can be used to automate procedures
using algorithms based on data from previous processes. Automation makes supply chains
more efficient by eliminating human errors.

AI also can identify patterns in the supply chain, and companies can leverage this technology
to predict purchasing demands and manage inventory. This takes the guesswork out of
planning and procurement, eliminating the need for planners to do the same calculations
over and over.
Augmented reality (AR) and virtual reality (VR) also pose various possibilities in improving
the efficiency of supply chains. For instance, AR devices allow workers to multitask more
effectively. Companies can also use these devices to enhance product development efforts
by predicting potential product uses in a realistic setting.

9. The Rise of Elastic Logistics

It’s not enough for supply chains to have lean processes; supply chains need to be flexible
and responsive to market fluctuations as well. As a result, more businesses are adopting a
flexible approach to logistics. Elastic logistics allow the supply chain to easily expand or
shrink according to current market demands. Technologies such as artificial intelligence
allow supply chains to adjust as needed with minimal disruptions (Material Handling &
Logistics, 2019).Elastic logistics provides flexibility to many variables in the supply chain,
including sailing schedules, carrier space, container usage, and route optimization. The
adjustability helps companies better handle potential issues such as overstocking and
unoptimized space in vessels. As a result, businesses can enjoy greater stability and remain
competitive despite market fluctuations.

10. Better Transparency and Visibility in the Supply Chain

Rising consumer concerns over the impact of modern business on society create a need for
companies to be more transparent about supply chain externalities. Companies have begun
providing some transparency when it comes to the sustainability of their supply chains and
their efforts to reduce their carbon footprint. Still, more visibility is needed on the impact of
the supply chain on other aspects of society. The shifting nature of global trade and its
corporate requirements may also result in mandatory corporate disclosures for a variety of
supply chain practices. Proper analysis of supply chain data can significantly improve
business forecasting and decision making. It can also optimize the use of resources involved
in inventory management, storage and transport.
Supply chain visibility gives insight into what’s happening at each point of the supply chain.
It’s extremely important for the efficiency of the entire supply chain process, including
procurement, manufacturing, transport and delivery.One of the benefits of improved chain
visibility is real-time inventory management. It involves use of mobile point-of-sale systems
and sensors, and takes inventory management to a whole new level.For instance, instead of
paying for purchased goods in a store, people can just take the desired items, and get charged
for the goods on their cards automatically. Furthermore, real-time inventory management
allows the goods to be replaced as they are consumed.

For instance, companies will soon have to look into providing reports on the impact of their
supply chains on jobs created, sourcing practices, as well as types of labor and modes of
transportation used. Disclosing information about these aspects of their supply chain can
help companies enhance brand image among consumers and prepare for compliance with
regulatory requirements if necessary.

11. More Agile Supply Chains

Aside from climate events, new tariffs and global trade issues require companies to be more
agile in terms of supply chain planning (Logistics Management, 2019). To ensure stability
and maintain high service levels, companies must make sure that their supply chains are
agile enough to cope with natural disasters and the shifting availability and costs of raw
materials. Supply chain managers can take advantage of supply chain modeling solutions to
predict scenarios and identify potential problems. This way, they can plan the best responses
to disruptions.

12. Wearable devices

Wearable technology refers to devices designed to be worn by people. Combined with cloud
technology, wearable devices help employees access and input data in real time. Through
proper data collection and analysis, wearable technology allows companies to maintain
control of their inventories. They can also stay up-to-date with product demand.
Warehouse managers can use wearables for fast, accurate collection of inventory data,
keeping track of manufactured, stored and distributed products.
Wearables can also monitor vital signs so health problems (exhaustion, heart attacks) among
the warehouse workers can be prevented.

13. Rise in eCommerce and Omnichannel Strategies

When you think of the term eCommerce, retail shopping likely comes to mind. However, a
recent report by the U.S. Census found that manufacturing actually takes the top spot in this
space.
In fact, of the $6 trillion total value of annual manufacturing shipments, nearly $4 trillion
comes from manufacturing eCommerce shipments. That’s more than 67% of the sector.
In large part, manufacturers are embracing eCommerce because it makes it easier to
purchase and sell products to other businesses.
As warehouses around the world pile up with product, we can expect the use of eCommerce
platforms to rise in 2022 and beyond. Increasingly, companies will focus on diversifying their
fulfillment strategies to improve their competitive advantage.

2.0 Conclusion

Businesses involved in the supply chain will face new difficulties as well as technological
advancements in the upcoming years. In order to combat unforeseen disruptions, businesses
will start concentrating on supply chain resilience. Utilizing robotics, AI, automation, and
digital supply chain twins will assist keep chains adaptable, scalable, and nimble. Blockchain
will emerge and offer transparency into transactions and procedures. Along with supply
chain support in the form of SCaaS, the market for cloud-based solutions will keep
expanding.
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