Guest Post

Is Supply Chain Management Doomed for Automation?

November 12, 2018

Written by Elizabeth Hines. This guest post comes from Fronetics, a boutique marketing firm focused on the Supply Chain and Logistics industries.

Artificial intelligence (AI) is changing the way the global supply chain operates and may make most supply chain management companies obsolete in 5-10 years. What can your company expect and what are the best strategies for preparing?

AI has a significant presence in supply chain management. Leading companies already use AI to run predictive analytics and to automate repetitive, labor-intensive tasks like purchasing, invoicing, and customer service. But executives are still needed to make decisions after reviewing data.

According to a study from the Harvard Business Review, that’s about to change. In 5-10 years, the authors predict, the supply chain will be run entirely by digital technologies that could eliminate the need for human oversight. Blockchains can coordinate between the parties involved in flexible supply networks, improving transparency and crisis-response times. Robotics already automate warehouses and fulfillment centers, increasing efficiency and minimizing the risks of employee injury. Moreover, digital technologies are increasingly able to execute purchasing and inventory management tasks.

Digital control towers

The new nerve-center for leading organizations’ operations is the “digital control tower,” typically a room with walls of high definition screens showing real-time graphics and information on every step in the supply chain. Data analysts staff these rooms 24/7, monitoring the flow from order to delivery.

These control towers provide end-to-end visibility into global supply chains. Process bottlenecks and inventory shortfalls can be predicted and managed before problems develop. Digital control centers allow more predictive management styles based on up-to-date and accurate information, which results in increased customer focus and process efficiency. It is an operational model that is gaining popularity across business sectors.

What does this mean for supply chain management?

Technology will continue to replace human labor in supply chain management. As data analytics and self-learning technology develop, we can expect to see more kinds of jobs performed by AI.  Planning for this trend towards automation is essential for all supply-chain companies.

The role of supply chain executives continues to change. Instead of managing people performing repetitive and transactional tasks, executives are working with a smaller number of highly specialized data experts to design information and material flows. The skill set associated with supply chain management will shift to focus on data analysis and algorithms, which will require new hiring or employee re-training. Finding skilled analysts to fill those roles will be crucial to organizations seeking to adapt to new supply chain conditions.

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