Disruptive Technologies: Turning Talk into Action

All the talk is about to end.  The dots between data intelligence and real action will finally be connected in meaningful ways. “The supply chain industry has been talking about using disruptive data-driven technology, including machine learning, artificial intelligence and IoT for years. In 2018, we expect to see that talk turn more concretely to action,” says Jon T. Lindekugel, senior vice president, 3M Supply Chain.

The head of one of the world’s largest supply chains, Lindekugel predicts that “leaders will leverage these technologies to disruptively advance nearly every supply chain function from the factory floor to store shelves. The payoff will be a renewed focus on customer satisfaction, and improved efficiency, transparency and sustainability results.”

New Additions to the SCM Agenda: Worker Safety and Reputation Risk 

Following yet another year of valuation- and brand-damaging incidents that happened deep within the value chain, the Global 500 will rethink how they approach supply chain risk and elevate the importance of sustainability, CSR and worker safety, according to Pierre-Francois Thaler, co-founder and co-CEO of EcoVadis, a provider of supplier sustainability and risk ratings for global supply chains.

“Mitigating traditional supply chain risks, including disruptions and financial uncertainty, will remain on the executive agenda, but this mandate will place a distant second to preventing reputational and brand damage caused by poor supplier practices.” Thaler continued: “Our world is more connected and social than ever. Today’s environment puts a laser focus on not just your own actions, but on the behavior and practices of the suppliers you engage to do business on your behalf.”

Throughout all of 2017 there were numerous front-page incidents ranging from slavery and forced labor, to harassment, worker safety and the environment. “In 2018, supply chain leaders will invest to go deeper into their value chains, working to ensure that they have strong transparency and connectivity with their secondary and tertiary suppliers, if not beyond. This includes everything from the impact on the environment, to how global organizations and their suppliers treat employees,” said Thaler.

Transparency and sustainability will Shape Consumer Demand

Sue Welch, CEO, Bamboo Rose, expanded on Thaler’s thoughts predicting that transparency and sustainability will be practiced with more vigor in 2018. “There’s been an explosion of demand from consumers to know where their products are originating and the required information is extremely granular. For example, with a package of carrots, consumers want to know not only the farm where they were harvested, but also the row and lot number where the carrots were planted.”

Welch, whose company, Bamboo Rose, works with a number of top retailers and apparel companies, expects traceability demands to not only shape how consumers buy, but how companies will source and market their services.

“In 2018, these kinds of demands will permeate other areas of retail, including apparel, hardlines and more. Retail labels will include information as detailed as origin. For example, where was the cotton for a garment grown? What chemicals were used in the farming and production phases? Smart retailers will begin to market their products from an information/sustainability-first standpoint and to be credible about it, they’ll need to invest in integrating technology that makes this level of transparency possible at every level of the supply chain.”

That last point – “to be credible” – resonates with EcoVadis’ Thaler as well. For him, it’s a trust and accountability issue. “Self-reporting on sustainability won’t be enough. Over the past few years, we’ve seen company after company ‘greenwash’ their products and services by sticking a label on it and calling themselves sustainable. This approach creates significant risk, as consumers demand accountability and transparency and anyone that tries to manipulate the market with unverified, surface-level promises risks losing consumer confidence and the backlash that comes with it. On the other hand, we’ll see the companies that are driving real sustainability improvements put more emphasis on marketing their gains, leading to more sales and better retention.”

Intelligence will Trump data

Nearly every expert I interviewed spoke about taking the next step with big data. Organizations have been collecting them for years, and in 2018 the applications will become smarter, if not more practical.

“In 2018, intelligence and insight will substantially change the way supply chains are managed, moving them from reactive to responsive at last. This breakthrough will come in large part thanks to further automation of data gathering and their analysis made possible by advances in software-driven equipment. With the ability to collect information about both supply and demand, these smart machines will accelerate the ability of supply chains to move more quickly, accurately and frequently,” predicted Jim Lawton, chief operating officer at Rethink Robotics.

3M’s Lindekugel also expects organizations to more effectively leverage data and go beyond surface-level predictions and decisions. “In 2018, we will see a dramatic increase in the number of large supply chains harnessing the power of big data analytics to more effectively predict and fill customer demand,” said Lindenkugel.

Obviously, predictions about putting all these data into use would seem like safe bets. Nevertheless, I found it interesting, if not refreshing, to hear experts uniformly confirm that it’s time to cash some checks. Big data, predictive analytics, intelligent agents, machine learning, AI, IoT, making SCM practices risk aware, etc.; wouldn’t it be a nice to hear how these investments actually delivered?

That’s where I land. I agree with the general premise that 2018 should be a year of action. And I agree that minding a high integrity shop and being able to prove it on a continuous basis is going to become a competitive requisite. Let’s face it, supply chain practitioners and marketing must find ways to sync their energies —not only to make sure that truth is better than fiction, but to demonstrate long awaited returns on data-driven technology investments.