To look forward, we first need to look back and learn. What are the key supply chain trends from 2016 procurement needs to take account of in 2017?
As we look ahead to the New Year, this is also an opportune time to take a look back at the trends and innovations that began reshaping the supply chain in 2016. These trends will continue to impact procurement professionals throughout 2017 and beyond.
A Stronger Focus On Digital Supply Chain Networks
Many supply chains still utilise a mix of paper-based and technology-driven processes. However, more and more companies are moving towards fully-digital supply chain models.
In fact, in a recent survey, more than 75 per cent of respondents said that it was important or very important for their organisation’s supply chains to undergo a digital transformation.
An all-digital supply chain provides procurement teams with more visibility into their supply chain. This enables them to better understand their data, their processes, and their overall operations. Armed with this insight, it is much easier to address issues and implement improvements.
These are advantages that all supply chain professionals seek. As a result, the adoption of digital supply chain is expected to increase in 2017.
The Rise Of Blockchain Technology In the Supply Chain
All businesses are at risk of a cyberattack. Recent large-scale DDOS attacks that crippled sites like Netflix, Paypal, Reddit, Twitter and thousands of others proved a sobering reminder.
That is why many organisations and supply chain teams have started to adopt blockchain data structures to protect their valuable information.
A blockchain is a data structuring approach that groups data together into ‘blocks’. Every block cross-references the previous block and the following block to ensure the data is valid, creating a “chain.”
In addition, the full chain is not stored in a central location. Rather different blocks are stored on different computers and networks at the same time. Only those who have authorised access to the blocks within the chain can access other blocks and implement changes.
As a result, data stored in blockchains are very resistant to tampering, making it extremely secure in the face of cybersecurity risks.
Major companies are beginning to incorporate blockchain into their supply chains as part of their invoicing, auditing, and inventory-tracking processes. For example, IBM launched a platform to test blockchain technologies to track high-value goods. And Walmart used Blockchain to tackle food safety.
Blockchain gives supply chain professionals a means of combating cybersecurity threats while ensuring that items can be tracked in a transparent and secure way.
“Uberization” Takes Hold
If you’ve ever taken an Uber from the airport or rented a vacation home through a service like AirBNB, you are already familiar with the benefits of an on-demand, pay-per-use service. Now, the supply chain is getting familiar with them as well, as procurement professionals seek to leverage the approach to manage inventory and reduce costs.
For example, companies are now offering on-demand warehousing services, which could reduce (or eliminate) the need to maintain expensive distribution centres.
Just as procurement professionals are looking to benefit from the trend, companies are looking to capitalise on it. Boeing is betting big on the pay-per-use model and is leasing their planes to Amazon for its Air Cargo network. In the retail space, companies such as Nordstrom’s, Costco and Whole Foods are implementing new options for customers.
In the past year, these three technologies had a big impact on supply chains and the people who work in them. And they will continue to shape the supply chain in 2017. However, they aren’t the only ones. What other technologies do you think will play an essential role in supply chains in the New Year?