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February 7, 2020 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet Supply Predictions for 2020 Part 1
bullet SC Digest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet Distribution Digest/Green Supply Chain
bullet Cartoon Caption Contest Continues bullet Trivia      bullet Feedback
bullet Expert Columns bullet On Demand Videocasts

The Best Solutions.
The Latest Equipment & Technologies.
The Smartest Thinking.


first thought


Supply Chain Graphic of the Week
Who are the Largest US Trading Partners in Goods?

Amazon Revenue and Profits Jump in Q4
US Manufacturing Back to Expansion in January
MIT Says Recession Likely in Next 6 Months


Coronavirus Taking Toll on Supply Chains


January 27, 2019 Contest

See the Full Image and Send in Your Entry Today!



Feature Story: Gartner's Dwight Klappich on the Coming Smart Warehouse Era


pic GSC Feature Story:Increased External Focus on Sustainability at Amazon, but will Consumers Live with Slower Deliveries?

The State of Retailer-Vendor Supply Chain Relationships 2020

Are Things Getting Better and More Collaborative - or Heading in the Other Direction? Third Biannual Study - Please Participate

Weekly On-Target Newsletter:
February 5, 2020 Edition

New Cartoon, Smart Warehouses, State of Manufacturing, More, More

Supply Chain Transformation - The Need for Speed
by Henry Canitz
Product Marketing & Business Development Director

The PO Lifecycle is Key Concept in Vendor Performance Management
by Richard Wilhjelm
VP Sales and Marketing
Traverse Systems


What is Amazon's performance standard for a "sorter" in terms of package scans per hour?

Answer Found at the
Bottom of the Page

Supply Predictions for 2020 Part 1

OK, I am getting a little bit of a late start on our annual summary of supply chain predictions from my gang of supply chain gurus, analysts, consultants and more, in one of our more popular features each year.

I am going to start with some predictions for where supply chain technology is headed in 2020 and beyond from our friends at Gartner. The giant analyst firm changes its approach to its series of "predicts" each year, but the thoughts on technology's direction are good, compiled from a team of analysts that includes Dwight Klappich, Rick Franzosa, Simon Tunstall, and Tim Payne.


In a finding I actually take as good news, Payne does believe that "humans will still be directly involved in the decision-making process" in most supply chain planning scenarios.


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I will start with a prediction from Klappich, who said he expects that by 2023, more than 30% of large enterprise supply chain organizations will have invested in at least one autonomous mobile robot pilot.

"Next-generation autonomous mobile robots (AMRs) are transforming operations as they become more autonomous and intelligent," Klappich says, adding that "AMRs are easy to buy and almost as easy to deploy. Given the low barrier to entry, combined with a strong value proposition, warehouse operations of all shapes and sizes will be able to invest in AMRs."

Klappich notes that AMRs address the historic limitations of traditional automated guided vehicles (AGVs), such as lack of flexibility, making them better suited to, and more cost-effective for, complex warehouses and collaborative activities.

He adds that while the current strong uptake of more automated materials handling systems in distribution is likely to continue, the high costs and long payback periods for heavily automated DCs will limit these to larger companies with greater capital availability, Klappich says, adding that "Demand for next-generation AMRs is skyrocketing due to the transformational impact of AMRs, but also the low upfront cost, shorter time to value and increased adaptability that AMRs offer."

What to do? Among other good recommendations, Klappich says "Companies should consider conducting designed experiments where current processes can be directly compared with new processes designed specifically around AMR capabilities."

Switching gears rather dramatically, Payne doesn't see a very bright short term future for "autonomous supply chain planning systems" - meaning where the software does basically all the work.

Indeed, Payne forecasts that By 2024, precisely 0% of companies will have achieved autonomous planning.

Gartner defines as autonomous planning as "automated prediction (create a plan) and automated prescription (choose a plan)." It implies that "no human is directly involved in this prediction and prescription - both are executed automatically by technology."

Artificial intelligence indeed.

That said, an earlier Gartner study found that 25% of companies said that, within five years, they would have "some autonomous decision making" in their supply chain.

But achieving complete autonomous planning - which Gartner says has received an abundance of recent notably hype from supply chain planning software vendors, "would require all planning decisions to be made autonomously. No company will achieve this because not all planning decisions are suitable to be made autonomously," Payne wrote, adding that "Initially, only a small proportion of planning decisions will be suitable. This proportion will grow over time, but will never reach 100%."

The question that thought begs though is how high can that percentage get, and how fast? Payne doesn't answer those questions, but in a finding I actually take as good news, he does believe "humans will still be directly involved in the decision-making process" in most supply chain planning scenarios.

Payne also notes that "In no cases do current planning technologies attempt to automate all aspects of planning decision-making."

But the idea of autonomous planning is certainly driving planning vendor marketing messages and research and development investment.

Payne says supply chain planning software vendors "are busy adding machine learning to their solutions, which aim to support better and, in some cases, more automated prediction (mainly), but with a small amount of automated prescription now appearing."

Among Payne's recommendations that companies should work to build a consensus on some planning automation by focusing use cases on specific business pain points. He adds that this focus should be on planning decisions that have a short-term time horizon.

Next, back to technology used in distribution centers, for which Turnstall says that by 2024, 50% of Warehouse Management System (WMS) vendors will embed machine learning capabilities to enhance workflows between automation and humans.

What does that mean? The concept is closely related to the growing interest in something called Warehouse Execution Systems (WES) that use advanced smarts to orchestrate work across multiple processing areas in a DC, and to more optimally manage and deploy human resources.

Interesting to me, Turnstall says that "Development in this area will help drive greater stratification between local "simple" satellite warehouse environments and centralized, highly complex warehouse environments."

He also believes the trend will also potentially narrow the field of WMS vendors that can compete at the high end to those that can demonstrate productive use cases where these capabilities converge.

Turnstall recommends that companies selecting WMS vendors get clarify their roadmaps for development of converged/smart/WES capabilities.

Good stuff.

And I like this: at the end of the research note, Gartner took at the accuracy of some predictions from several years ago - one where they nailed it, and another not so much.

On the positive side, in 2015 Gartner predicted that by 2018, 5% of companies with complex picking operations would pilot mobile, self-navigating and smart warehouse robots.

As we saw from Dwight Klappich in his 2020 predictions summarized above, that growing popularity of mobile robots in distribution appears to have certainly happened. It does seem a little odd though to select as on on-target prediction from the past one the same topic of a current year prediction.

On the much less accurate side, in 2016 a Gartner analyst predicted that by 2020, digital business demands would compel 25% of B2B product-centric companies to adopt multichannel commerce concepts.

However, the dominant development of omnichannel strategies in retail has not in fact migrated to traditional B2B companies in mass numbers, Gartner says, noting that "While multichannel concepts remain plausible in B2B, adoption is minuscule at best (estimated at less than 5% of global enterprise B2B companies). The pervasive legacy of monolithic ERP in B2B companies has been and remains a barrier to change."

So there you have it, some supply chain technology predictions from Gartner, More predictions for 2020 and beyond from other quarters next week,

Any reaction to Gartner's predictions on supply chain technology? Let us know your thoughts at the Feedback section below.


On Demand Videocast:

Understanding Distributed Order Management

Highlights from the New "Little Book of Distributed Order Management"

In this outstanding Videocast, we'll discuss DOM, based on the new Little Book of Distributed Order Management, written by our two Videocast presenters.

Featuring Dan Gilmore, Editor along with Satish Kumar, VP Client Services, Softeon.

Now Available On Demand

On Demand Videocast:

The Grain Drain: Large-Scale Grain Port Terminal Optimization

The Constraints and Challenges of Planning and Implementing Port Operations

This videocast will provide a walkthrough of two ways to formulate a MIP, present an example port, and discuss port operations.

Featuring Dan Gilmore, Editor along with Dr. Evan Shellshear, Head of Analytics, Biarri.

Now Available On Demand

On Demand Videocast:

A Blueprint for WMS Implementation Success

If You Want a Successful WMS Project, You will Find the Blueprint in this Excellent Broadcast

This videocast lays out the keys to ensuring your WMS implementation goes smoothly, involves minimal pain, and accelerates time to value.

Featuring Dan Gilmore, Editor along with Todd Kovi of Radix Consulting and Dinesh Dongre of Softeon.

Now Available On Demand


We received several emails on Gilmore's First Thoughts column on Can - and Should - US Manufacturing be Saved 2020?


The offshore trend over three decades has been an overall disaster for the US economy and large swaths of the country, such as the Midwest.


My hats off to these two commentators who are finally calling the situation for what it is.


Ron Grove

I think the issue is more complex than what Kota and Mahoney say, but at the same time this is a perspective that oddly is not argued more often?


Why isn't the National Association of Manufacturers (NAM) leading a similar charge?


David Smeltzer
Barberton, OH


I had no idea US government investment was being used to in effect the movement of jobs to China and elsewhere.


Why isn't this some type of public scandal?


I completely agree that laws should be enacted that "would ensure any licensee of federally funded research results should be required to manufacture at least 75% of the value added in this country."


Dale Springer


Q:What is Amazon's performance standard for a "sorter" in terms of package scans per hour?

A: 1800 - or 30 per minute - according to an ex-Amazon FC worker interviewed by the UK's The Guardian newspaper.

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