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Predictions from Supply Chain Gurus for 2019 - Full Text Version Part 2


Complete Predictions from Michael Watson and Rich Sherman; Part 3 Next Week

Feb. 18, 2019
SCDigest Editorial Staff

Recently, , SCDigest editor Dan Gilmore highlighted supply chain predictions for 2018 from a number of supply chain gurus in our virtual panel. You can find those columns here: Supply Chain Guru Predictions for 2019, and Supply Chain Guru Predictions for 2019- Part 2.

As promised in those columns, as usual we are also offering the full text predictions from of the gurus highlighted in Gilmore's columns.


Last week, we published the full text predictions from pundits Mike Regan (TranzAct Technologies); Gene Tyndall (Tompkins International); ; and Dr. Chris Gopal (consultant and academic). See Predictions from Supply Chain Gurus for 2019 - Full Text Version Part 1.)

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The biggest barriers to enterprise performance management are misaligned functional silos.

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So below are the full text predictions from pundits Dr. Michael Watson and Rich Sherman. Really good stuff.


Full text predictions from the final  group of gurus next week.


So let's get right to it, starting with Dr. Michael Watson of OpEx Analytics


Predictions from Dr. Michael Watson, OpEx Analytics


My first prediction is based on five big trends we are seeing.

1. More students are coming out of school with R or python programming experience.

2. Executives starting to realize that they can't just buy off-the-shelf AI apps—they need to build tailored AI to suit their needs and strategy.

3. Vendors are providing platforms instead of off-the-shelf tools.

4. Algorithms are getting easier to write-- lots of open source software has these algorithms built already, as an example.

5. There is more data to feed the algorithms-- both internal and external data.

These five trends lead us to predict that 2019 will see a big rise in the development of custom supply chain apps.

My second prediction will find a lot of doubters and may generate some hate mail: I predict that in 2019 the hype will drain out of the use of Blockchain in the supply chain.

I can see the value of Blockchain in Bitcoin where trust is a huge issue. As I see it, two big reasons that blockchain was so transformational for Bitcoin is because the minors have a big financial incentive to verify transactions (and this allows the ledger to be clean and permanent) and that the assets are widely spread so that it becomes difficult to mount a 51% attack (where a group gains 51% of the "votes" and can then manipulate the short term ledger).

When it comes to the supply chain, I find it hard to believe that any outside entity has the right incentives to verify that a supplier shipped 20 cases of tomatoes to your local grocery store. So, we will still need the buyer and seller needing to go back and change the ledger to correct the cases of tomatoes shipped.

And, in supply chain applications, almost by definition, a group should have more than 51% of control (Amazon, Walmart). So, it is hard to believe that the ledger will be permanent and unchangeable (like it is in Bitcoin).

Going even further, I don't see that trust is the big issue in most supply chains. That is, Walmart already trusts that its vendors will ship pretty much what they order and have systems for checking this. And, the vendors trust that Walmart will pay them.

Note that I'm not saying the technology won't have good uses (I'm sure it will). My prediction is just that we just won't be talking about blockchain as a completely transformational technology in the supply chain anytime soon.


Predictions from Rich Sherman, Senior Fellow, Supply Chain CoE, Tata Consultancy Service (TCS)


Digital Technology Continues to Advance Connected Commerce and Business 4.0

The convergence of digital technologies enables "Smart Digital Supply Networks." The exciting innovations in technology come from the foundational capability that advanced analytics creates for ecosystem network connected commerce. While we still can't "beam" goods to people, we can "beam" data at the speed of light. Digitalization speeds the realization of a synchronized, zero latency supply network where material seldom pauses versus seldom moves along the journey from raw material sources to final consumption and disposition.

In 2019, the pace of maturity among digital technologies continues to grow. The distance between leaders and laggards also grows. Companies that have crawled through assessments, process and data mapping, pilots, and roadmap development are setting the standards for Business 4.0. Everything is moving to hybrid Ecommerce/Traditional digital commerce. Omnichannel is no longer just for retail/consumer industries. Companies that are prepared for the ecosystem impact will thrive, while traditional brand stalwarts fall to the wayside. Remember Sears?

Will Omnichannel be the Growth Lever for Ecommerce?

While Ecommerce still represents less than 10% of retail sales, it's the fastest growing segment and doesn't look to be slowing anytime soon. Seeking to leverage their brick and mortar presence (especially with the challenges of last mile delivery), many retailers have been offering "omnichannel" personalized fulfillment options; e.g., order on line and pick up in store; partial online orders for packaged goods, self-pick for fresh; pick up on line order at check out; home delivery; curbside load and go; and, scan items into cart with mobile and go to a QR code based full cart check out station. Personalized omnichannel strategies are emerging as competitive alternatives to pure play Ecommerce retailers' no touch selection, shipping costs, and capacity issues.

In 2019, expect to see more and more companies, not just retailers, offering personalized fulfillment options leveraging omnichannel capabilities. The capabilities will require digitalization, especially mobile, device data collection, location based services, and advanced analytics focused on individuals and micro-market location based segments. Brick and mortar locations will continue to be a critical channel; but, all of the hybrid selling and fulfillment options that brick and mortar locations can offer will be.

(See More Below)



Is Last Mile Delivery a Pot Hole or Advantage for Ecommerce?

Last Mile Delivery is simultaneously the lever and the constraint to growth in the ecommerce segment of retail sales. At less than 10% of retail sales, ecommerce is the fastest segment; however, that growth is constrained as more and more demands are placed on parcel delivery services. Last mile delivery is also the competitive lever for B2B ecommerce.

Autonomous vehicles and drones are frequently cited as the answer to driver shortages; however, last mile delivery faces more challenges than driver shortages as parcel volume and home delivery demand grows. Packaging cost and waste is a growing concern as a by-product of home delivery.

In 2019, expect to see more growth in parcel services as the volume from ecommerce growth will drive demand for more home delivery. However, also expect that home or last mile delivery will face a cost pothole in the physical distribution requirements of last mile delivery. To meet the challenges, new categories of last mile delivery and sharing services will emerge, such as prepared food, grocery, B2B, apparel, and other consumer and commercial categories.

Digitalization and Business 4.0 Necessitate Organizational Change

The biggest barriers to enterprise performance management are misaligned functional silos. Supply chain management is undergoing a fundamental transformation from "chain" management to "network" management. Maturing digital technologies enable companies to transform to ecosystem thinking to digitally re-imagine, align, and connect their functional silos to digital enabled collaborative functions working together for the financial health and success of the company. In the digital economy, everyone and everything in the market ecosystem is always on and always connected.

While we can't break down the silos, we can connect them and apply automated collaborative process technology and analytics to eliminate the inefficiencies of traditional silo dysfunction.
In 2019, market leaders are outpacing their competitors on the journey to Digital and Business 4.0.

Companies must align their business strategy and digital (IT) strategy immediately or face trailing the competition too far to catch up. Start with new cognitive analytics. Implementation of sophisticated analytics forces assessment, mapping, and master data management. Think ecosystem, collaboration, and alignment to change the culture. In 35+ years, one initiative remains the same: Management Commitment.

Are Supply Chain Analytics the Driver of Competitive Advantage?

Last year, I predicted Advanced Analytics would be the digital "extinction event" for companies that aren't implementing advanced analytic strategies. Analytics technology continues to mature; however, many companies are lagging behind, especially with embedded analytics, commerce ecosystems and community platform based analytics. It's becoming clear that leaders are looking at analytics much more broadly than IoT and unstructured data. Network operations and ecosystem analytics are emerging that may prove to be the real disruptors. Amazon's ecommerce marketing and fulfillment platform with embedded real time inventory and operational optimization is the model for Supply Network Management 4.0.

In 2019, "Control Tower" community ecosystem platforms emerge from "under the radar" and companies begin considering these supply network operating platforms for analytics based and operational competitive leverage. Amazon will continue to expand its base of sellers by offering lower costs of entry to SMB companies that want to play in a market where size doesn't matter. Nevertheless the Japanese saying, "Know when to cooperate and know when to compete," may be the connected commerce mantra.

The Bottom Line

Success in Business 4.0 will emerge from customer (consumer) delight. The power is with the customer, e.g. "showrooming", price comparisons, reviews/reputation management, search engine optimization, and, most important, selection and convenience. Being easy to do business with on steroids.

The Industrial Internet (mobile devices, location based services, AutoID, analytics, and the Internet of Things) places the power of choice and the power to say no in the hands (literally) of the customer. Your success will depend on the application of digital technology to exceed the expectations of the customer before and after the order is placed.


Any reaction to any of these 2019 predictions? Which did you like best and why? Let us know your thoughts at the Feedback section (email) or button below.




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