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  First Thoughts

    Dan Gilmore


    Supply Chain Digest

Feb. 6, 2020

Supply Predictions for 2020 Part 1


Gartner Analysts Predict Developments in Mobile Robots, Supply Chain Planning Software, and Smarter Warehouse Management Systems


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.

Gilmore Says....

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.

What do you say?

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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, aKlappich 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 cartainly 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.

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