Best practices and key technologies of supply chain management are always evolving. However; the particular changes stemming from faster and more widespread internet access across supply chains have the potential to be the most transformative to date. Those forward-looking organizations are using emerging advanced technologies, such as blockchain, AI, IoT and machine learning to understand new ways of improving fundamental business processes.
Evolution of Supply Chain Management
In the 1960s, supply chains began their transformation into their current form, as once-disparate systems for warehousing, packaging, sourcing, demand forecasting, and other workflows were gradually integrated. From there, consolidation of supply chain functions around materials management and physical distribution led to the rise of modern logistics in the 1990s.
More recently, the integration of IT into the supply chain has enabled much more thorough automation of tasks, as well as more efficient ERP systems capable of rolling out and scaling new functionality much more quickly than legacy implementations. The market for artificial intelligence (AI) in supply chains alone was estimated to be worth over $21 billion by 2027 as organizations seek to manage more complex global operations and support technologies like computer vision.
In addition to AI, the closely related machine learning (ML) along with blockchain and the Internet of Things (IoT), deserve close examination for their potential in supply chains. Already, they are opening up new possibilities in every industry from manufacturing to health care, and continue to grow in prominence beyond the 2020s.
Artificial Intelligence and Machine Learning
First things first: AI is the demonstration of intelligence by machines, in tasks such as deciding how to route traffic on a network, identifying objects within photographs, and recognizing human speech. ML refers to the more granular ability of a machine system to continuously improve its capabilities without constant human intervention.
In a supply chain context, AI and ML can support substantial savings. A McKinsey survey found that 61% percent of respondents reported lower costs for supply chain planning thanks to AI, while 64% said their manufacturing operations were more cost-effective.
Blockchain technology became famous for its role in supporting cryptocurrencies, most notably Bitcoin. However, its utility extends into other areas as well. The immutability of the blockchain’s ledger (i.e., it cannot be tampered with after the fact) makes it an obvious candidate for preserving trustworthy records that can build consensus, for instance between an organization and its supply chain partners.
Blockchain-based supply chain management has the potential to be more transparent, auditable, and authoritative than its predecessors. Business Insights survey found that a majority of respondents planned to implement blockchain tech in their supply chains by 2022. Allied Market Research has also estimated an 80% compound annual growth rate of blockchain in the supply chain between 2018 and 2025, confirming this momentum.
The Internet of Things
The IoT is vast, encompassing tens of billions of connected devices ranging from home appliances to sensors embedded throughout global supply chains. According to IT research firm Gartner, almost 6 billion IoT endpoints were deployed in the enterprise and automotive sectors alone in 2020.
Because the IoT extends internet connectivity beyond the traditional device form factors (e.g., of PC, phones, and tablets), it in turn supports data aggregation from a wider variety of sources and for the subsequent analysis and application of this information. More specifically, IoT can enable more comprehensive insights into production and logistics across the supply chain.
For example, something as small as a Bluetooth- and internet-enabled sensor can collect data on the status of a shipment and relay it back to an ERP system, so that decision-makers can stay consistently informed. The IoT also enables infrastructures such as smart factories full of connected equipment; Oracle has estimated that two-thirds of industrial manufacturers have smart factory initiatives up and running with these emerging technologies.
Putting Emerging Technologies to Work with Oracle and AVATA
Oracle Cloud solutions, together with these emerging advanced technologies, can become transformational and modernize supply chain management processes and ERP applications with tangible results. As an Oracle strategic partner, AVATA has guided successful implementations across the Oracle ERP and SCM Clouds with careful attention to customer requirements.
Download our Advanced Technologies Datasheet to see specific examples of Use Cases and benefits that can be achieved through use of these technologies.