sc digest
February 8, 2018 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet Supply Chain Predictions for 2018 from Gartner bullet SC Digest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet Holste's Blog/Distribution Digest
bullet Cartoon Caption Contest Continues bullet Trivia      bullet Feedback
bullet New Expert Insight Column bullet New Videocast and On Demand Videocasts

Register Now for MODEX 2018
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first thought


Supply Chain Graphic of the Week
Retail Chargeback Headed Up, not Down


Incredible Growth in Amazon's DC Footprint

Declining US Consumer Spend on Apparel
Autonomous Truck Goes Coast to Coast
Japan's Manufacturing Quality Reputation is Shaken


January 17, 2018 Contest

See The Full-Sized Cartoon and Send in Your Entry Today!

Holste's Blog: Guidelines for Achieving a Successful Audit


11th Annual Gartner-SCDigest Supply Chain Study!

One of the Most Popular and Respected Studies in the Industry Each Year

Survey Respondents Receive Complimentary Gartner Research
(See Details Here) - a $300-500 Value

Weekly On-Target Newsletter:
February 7, 2018 Edition

Rising Logistics Costs, Amazon Picking Wristbands, Procurement AI and more

The Retail Vendor Performance Management Bulletin

January 2018 Issue

Changing the Status Quo to Stay Ahead of the Amazon Effect

by Henry Canitz
Product Marketing & Business Development Director

Fast Isn't the Only Factor

by Gary M. Barraco
Global Product Marketing
Amber Road


White Paper Discusses the Importance of Understanding Some of the Quirkier Import and Export Anomalies


What supply chain initiative was first tested by Procter & Gamble and Schnuck’s Markets in St. Louis in 1987?

Answer Found at the
Bottom of the Page

Supply Chain Predictions for 2018 from Gartner

Over the last two weeks, we've run highlights of the excellent supply chain predictions from our virtual panel of supply chain gurus. You will find those here and here.

And if you would prefer to see some of these guru predictions in video form (these are really good), that is right here.


Gartner says "AMRs will transform warehouse operations over the coming years as they become truly autonomous and intelligent."


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Now, as I do every year, I will spend two weeks summarizing the 2018 supply chain predictions from leading analysts, notably Gartner and IDC.

So we'll start this week with Gartner's "predicts" for supply chain operations.


Gartner starts with a simple observation: "Supply chain operations must adopt new business models to compete in an increasingly complex and volatile world. Supply chain leaders must identify where to innovate and invest in new processes and technologies to remain competitive."

Most of us can probably agree with that – the question (which never changes) is how to do that most effectively.

As a prelude to its predictions, Gartner highlights some data from the survey/study it conducts annually with SCDigest, in part noting that when asked in the study if they consider supply chain technology a source of competitive advantage, 65% of respondents said Yes.

However, an overwhelming majority of 88% of innovative, early supply chain adopters of technology see it as a key source of advantage, versus only 45% of conservative technology adopters do. (See graphic below.)



See Full Image


As an aside, I think the notion that supply chain technology cannot deliver competitive advantage is simply absurd – I only have to review my decades of compiling stories of companies that have achieved significant gains from technology, or observe Amazon today. However, I will agree that some companies don't see it that way – hence it becomes a self-fulfilling prophecy.

With that into, I will summarize several of the Gartner predictions from a slew of contributing analysts, those being: Dwight Klappich, William McNeill, David Gonzalez, Simon Jacobson, Alex Pradhan, Andrew Stevens, Laurel Lippay, and Simon Bailey.

Let's start with this one: By 2021, one in 10 warehouse workers in established economies will be replaced by autonomous mobile robots (AMRs), Gartner says. 

We all know the robots are coming, the question is just how fast. Gartner begins by noting that the interest in DC robots stems more from challenges finding warehouse workers in the US, Europe and Japan than the interest in cutting labor costs.

By AMR, Gartner is referring specifically to the rapidly evolving next-generation automated guided vehicles (AGVs), as I will note traditional AGVs have never really gained much presence in distribution centers versus manufacturing, especially in the automobile sector.

Gartner says AMRs will take automation to the next level by adding intelligence, guidance and sensory awareness to historically "dumb" AGVs, allowing AMRs to operate independently and around humans. Of course, I will note robotics makers such as Seegrid and others have been doing this for several years.

AMRs address the historic limitations of traditional AGVs, Gartner says, making them better suited to and more cost-effective for complex warehouses, adding that "as AMRs continue to evolve, gaining more features such as lift capabilities, they will be cost-effective ways to supplement or replace human capital in warehouses of varying size and complexity."

Expect rapid gains in the technology, Garter says, predicting that "AMRs will transform warehouse operations over the coming years as they become truly autonomous and intelligent. Costs and complexities will continue to come down, which will open up the market to even more companies."

What's more, Gartner says that "While AMRs are rapidly evolving technologies, they are real, and even some conservative organizations could at a minimum experiment with them today. The cost of an individual AMR is modest compared with other forms of automation, so companies should acquire test units to "play" with if they aren't yet ready for wholesale adoption."

I will note that such robots are available from new specialists such as Locus Robotics and Fetch Robotics, as well as many traditional AGV providers, with some still oriented to moving pallets, some to assist in the piece picking process.

Another prediction from Gartner, along a very dissimilar vector, is this: By 2021, three out of five factory-level artificial intelligence initiatives in large global companies will stall due to inadequate skill sets - and immature technologies.

Is AI going to take over the world? Maybe not as fast as many seem to think, Gartner says – at least on the factory floor.

AI can simply been seen as a subset of larger initiatives such as the digital factory/industry 4.0, though the rising interest in advanced analytics has pushed AI front and center for smart manufacturing, Gartner says.

While AI on the factory floor can be applied say to develop self-learning robots, AI-based systems that are more cognitive in nature (e.g., mirroring or improving upon human thought processing) will require new skills and talents to be developed in order for them to be successful, Gartner believes.

Gartner is long term bullish, saying that "Artificial intelligence will change entire production processes and how factories are managed. The promise of hyper-flexible production lines that are self-learning and self-adjusting has allure."

That's hard to argue with.

However, don't assume that "the machines are ready to take over," Gartner says, noting that AI transcends both traditional mechanical and IT skills.

"This unique blend of subject matter expertise and data management lacks in abundance and will create a "talent trap." This trap will constrain the operationalization and scale of many factory AI products, ultimately curtailing them," Gartner interestingly predicts.

Gartner does not believe overcoming these digital skills constraints in manufacturing can be solved by "just hiring data scientists." In fact, Gartner says that even when generalist data science skill sets are available, making the most of them can be a challenge, due in part from a lack of domain expertise and the complexity of heterogeneous factory systems.

What are manufacturers to do? One recommendation from Gartner is to nurture mentoring programs where current subject matter experts partner/train/learn from younger, data-savvy employees so there is knowledge transference.

Additionally, manufacturers should develop knowledge management systems that maximize human potential. This, Gartner says "includes developing a dialogue between human and machine, encouraging machines to be proactive, and focusing on "why." This will help machines capture and convert expert knowledge."

Not sure I fully get that last one, but I will assume Gartner is correct. I may ask Gartner for more detail on just what that last point means.

Finally, I will take a quick look at this prediction from Gartner: Blockchain is also not quite ready to take over the supply chain world either.

In fact, through 2020, 90% of all supply chain blockchain projects will still be proof-of-concept initiatives, Gartner predicts – which would certainly be bad news for IBM, which is making an aggressive blockchain bet - if accurate.

While noting the long-term promise of the concept, "Supply chain blockchain technology is not fully developed, is largely untested and requires early adopters to accept significant increased levels of operational and financial risk," Gartner says, adding that the vendor landscape in this area is also immature.

Wow – that is sure different from the blockchain hype machine.

Gartner sites other barriers to blockchain – and I had not thought of this one – including the fact that international finance (along with other application areas) will not be adopt blockchain without the right organizations and authorities approving and regulating its use.

But that doesn't mean companies should sit back and do nothing. Gartner recommends, for example, that companies join industry working groups and consortia where like-minded companies are exploring blockchain pilots, with a view to starting discussions around an ecosystem of trading partners.

An example of a group worth joining is the Blockchain in Trucking Alliance (BiTA), Gartner says, though I took a quick look there and for now almost all the members are carriers, with very few shippers.

And I like this recommendation from Gartner, since I have said something much like it myself.

"Evaluate the impact of traditional technology solutions," Gartner says, as "Blockchain is not a panacea and may not be the best solution to solve your supply chain business problem."

Good stuff from Gartner. Next week I will be back with some more predictions from Gartner specifically for chief supply chain officers, and some other predicts from the analyst at IDC.

Any reaction to these predictions from Gartner? What are some of your 2018 supply chain predictions? Let us know your thought at the Feedback button below.



New Videocast:

Reducing Costs through Automated Inventory Replenishment & Analytics

How Motor City Industrial Taps into Data Visualization to Help Customers Identify Waste, Reduce Inventory

This videocast discusses how to connect people, processes and technology across commerce and supply chain operations to achieve unified commerce.

Featuring Dan Gilmore, Editor along with Joseph Stephens, CEO, Motor City Industrial, Jay Fielder, Supply Chain Technology Manager, Motor City Industrial and Mike Wills, Chief Revenue Officer, Apex Supply Chain Technologies.

Tuesday, February 27, 2018

On Demand Videocast:

Yes, Retailers and Distributors Can Survive and Thrive by Unifying Commerce and Supply Chain

Integrated Approach will Improve Customer Experience as Smart Retailers Move Beyond Omnichannel

This videocast discusses how to connect people, processes and technology across commerce and supply chain operations to achieve unified commerce.

Featuring Dan Gilmore, Editor and enVista CEO Jim Barnes, a highly recognized industry expert on retail and distribution.

Now Available On Demand

On Demand Videocast:

The State of Retail-Vendor Supply Chain Relationships 2017

Results from SCDigest's Second Biannual Benchmark Study of Retailers and Their Vendors - and SCDigest's New Index to Measure State of the Relationships

These findings are being presented in a live panel discussion with interactive questions from audience members throughout.

Featuring Dan Gilmore, President & Editor-in-Chief of Supply Chain Digest plus Greg Holder, CEO, Compliance Networks, Kim Zablocky, President, RVCF (Retail Value Chain Federation)
and Victor Engesser, Retail Executive Advisor, RVCFP.

Now Available On Demand


We received a number of emails of Gilmore's First Thoughts column on The End of the Fossil Fuel Era?, a selection of which we provide below.

Feedback on The End of the Fossil Fuel Era?


My suggestion would be to view the oil market like the stock market. There will always be fluctuations in the short-term, but what is the long-term trend?

I've also read various authors on this subject and most seem to agree on a few facts:

•  Oil is a non-renewable resource.


• Demand for oil will generally increase with population growth.

• While alternative sources of energy exist, none can yet do everything that oil does, as economically as oil does it.

• Price of oil can be affected by many factors such as supply, strength of the economy, value of the dollar, and Mideast tensions.

I think the crises has been temporarily averted due to the factors in the 4th bullet, but not permanently resolved.

The underlying problems in the first 3 bullets still exist. This will occur, the only question is when.

Mark Wilder
Distribution Manager
T. Marzetti Company


Editor's Note:

Thanks for the response. I used to think almost exactly this way, but as I hope made clear I believe electric cars are will soon gain critical mass and upset your bullet number 2.

Dan Gilmore


Thanks for the article... was interesting.

I guess Gilmore is spot on and we indeed have entered an era of long term decline of fossil fuels

I think it will be another 20 years ‎by the time alternate fuels will have a greater share than fossil fuels.

I think that countries like India and some other emerging markets - all large consumers of oil - are slow to adapt to new technologies and thus will continue to consume oil for 20-25 years before they have also achieved parity with advanced economies in terms of use of alternate fuels.

Rajeev Kashikar

Mumbai, India





The change that is coming to transportation through the development of electric vehicles has great promise, but until there are major breakthroughs in alternative generation of electricity, we will still be dependent upon hydrocarbons.

It's important to ask what's creating the electrical power to charge the batteries, think about what's on the "other side of the charging station."

Jack A Cuneo
JP Venture Partners




Q: What supply chain initiative was first tested by Procter & Gamble and Schnuck’s Markets in St. Louis in 1987?

A: Continuous Replenishment.

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