Transform Your Supply Chain Planning and Marketing Strategies with Google Cloud and SAP Integration
June 7, 2023 | Premangsu Bhattacharya
Blog / 10 Emerging Trends Transforming Supply Chain in 2023
As we find ourselves in the throes of the digital age, the global supply chain landscape is undergoing a massive shift. Technologies such as LLMs, artificial intelligence, machine learning, and the Internet of Things are no longer just buzzwords; they have become the critical enablers of this transformative journey.
These technologies, coupled with a profound shift in business strategies, are reshaping how businesses operate, bringing about a new era of efficiency, agility, and sustainability.
Here, we’ve curated the top 10 emerging trends that are heralding this revolution in supply chain management. We aim not just to inform, but to inspire action and adaptation in this rapidly evolving space.
According to research, 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
The era of digital intelligence has transformed traditional supply chain management into an innovative, efficient, and highly responsive operation.
Artificial Intelligence (AI), at the heart of this transformation, is assisting businesses in navigating the complexities of modern supply chains. By analyzing extensive data sets, AI is capable of providing valuable insights, predicting market trends, and making informed strategic decisions.
This intelligence extends to managing real-time tracking, anticipating maintenance needs, and mitigating potential disruptions in the supply chain.
Generative AI represents a significant leap forward in predictive capabilities.
With the power to simulate numerous scenarios and outcomes in a virtual environment, generative AI allows businesses to explore a vast array of strategies and contingencies.
It enables organizations to anticipate potential challenges, making proactive decision-making an attainable goal.
Digital twins, empowered by the Internet of Things (IoT), provide a dynamic approach to managing intricate supply chain ecosystems. Digital twins create a virtual mirror of a company’s supply chain, while IoT ensures a seamless flow of real-time data from numerous devices into this virtual model.
For instance, sensors installed on an undersea drilling rig can transmit real-time data about operational parameters and environmental conditions. This data feeds into the creation of a digital twin – a real-time, virtual replica of the drilling operation. Engineers can then simulate different strategies or react to sudden environmental changes in the virtual model first, mitigating risks and optimizing responses without putting the actual operations or personnel in jeopardy.
Data integration is about creating a cohesive, transparent supply chain landscape. It involves merging data from diverse sources, such as SAP and non-SAP systems, into a unified structure. The Google Cloud Cortex Framework has enabled the seamless integration of AI and ML into SAP systems, providing businesses with easier access to crucial operational data.
With data integration, organizations can achieve a single source of truth, enabling stakeholders to draw insights and make data-driven decisions. The integration also aids in streamlining external insights, creating a robust foundation for demand forecasting and inventory management.
According to Gartner, strong data literacy yields strong performance in the areas of customer fulfillment, cost management and demand planning.
In the era of digital transformation, it’s essential to invest in upskilling the workforce to effectively deploy and monitor advanced technological solutions. Automation of repetitive tasks and democratization of data access allows employees to engage in more strategic roles, fostering a digitally competent workforce.
Companies are recognizing the value of this growth, with an increasing focus on digital upskilling and reskilling.
By creating a work environment where data literacy is nurtured, organizations are gearing up for a future where human talent and technology are complementary assets in supply chain management.
As the complexity and pace of the supply chain increase, decision-making technologies have become instrumental in supporting fast, accurate, and efficient outcomes.
These technologies help businesses navigate the challenges of continuous innovation, shortened product life cycles, and a convoluted supply chain network.
With the power of data analytics, businesses can make data-driven decisions that improve operational efficiency, enhance customer experiences, and optimize every facet of the supply chain.
By turning raw data into actionable insights, decision technologies are playing a vital role in achieving sustainable competitive advantage.
For example, SAP Business Technology Platform (BTP) users are increasingly leveraging Pluto7’s Demand ML data platform solution. This solution enhances their decision-making capabilities within SAP Integrated Business Planning (IBP), enabling them to incorporate external insights and predict demand more accurately.
The circular supply chain concept is reshaping the industry, focusing on creating a more sustainable and efficient system. It is a closed-loop system that maximizes resource utilization and minimizes waste by promoting the reuse and recycling of materials.
With the growing global focus on sustainability and environmental protection, the circular supply chain has become increasingly vital. It not only helps organizations reduce their carbon footprint but also drives operational efficiency and cost-effectiveness.
Consider a CPG company that implements a circular supply chain. By encouraging the reuse and recycling of materials – for instance, recycling packaging waste into new packaging – they’re able to reduce their carbon footprint and production costs, while providing consumers with eco-friendly products.
Customization is rapidly becoming an essential component of supply chain management, especially as consumers increasingly expect personalized experiences.
This expectation requires a careful segmentation of the supply chain, creating tailored strategies for each segment.
Consider a business that incorporates customization in its production process, say a company in the fashion industry. Through advanced analytics and machine learning, they can tailor production lines to create unique designs based on customer preferences.
This level of customization elevates the consumer experience, boosts customer loyalty, and provides a competitive edge in the market.
Real-time inventory management is transforming supply chain processes, notably in retail. This involves deploying advanced technologies to monitor inventory across the supply chain instantaneously and accurately.
For instance, consider a multinational retail corporation. To avoid overstocking and stockouts, the company uses IoT sensors in its warehouses and stores for real-time inventory data. Analyzing this data with AI and ML-powered platforms, such as Pluto7’s Demand ML, provides actionable insights, optimizes inventory, meets consumer demand efficiently, and boosts profitability.
Integrating real-time inventory data with Point of Sale systems and customer loyalty programs enhances decision-making and provides a seamless shopping experience.
In the age of digitalization, supply chains are rapidly evolving, and data transformation is at the heart of this revolution. Businesses today are unifying their data sources, blending them with external datasets, and integrating real-time insights.
These practices enable businesses to create a comprehensive and effective data foundation. This unified data is then leveraged for AI and ML experiments which can lead to significant cost reductions and efficiency gains.
As we navigate through an increasingly complex and digitized world, it’s evident that the supply chains of tomorrow will be fundamentally different from those we see today. The pace at which these changes are occurring may seem overwhelming, but it also offers a plethora of opportunities for businesses to innovate, optimize, and grow.
Embracing these emerging trends isn’t merely an option, but a necessity for businesses to stay relevant and competitive.
The key to successful adaptation is not to resist these changes, but to view them as powerful tools that can shape the future of your organization.
Each of these trends, be it AI-driven automation, real-time visibility, or the embrace of sustainability, is a piece of a larger puzzle that, when completed, presents a picture of a more efficient, resilient, and sustainable global supply chain.
As a leader in AI and ML solutions, Pluto7 is well-equipped to guide businesses on this transformative journey, helping them to navigate through the complexities and harness the power of these emerging trends to achieve their strategic objectives.