The Death of Supply Chain Management?

July 12, 2023

Although the method by which the national/global supply chain is managed has been antiquated, the average person remained unaware of it until recently. Factors such as geopolitical conflicts, the Covid-19 pandemic, increasing consumer demand, high freight rates, and just-in-time inventory systems have revealed the volatility of supply chains and the need for improvement and efficiency. Specifically, these factors have worked together to disrupt not only supply chain operations, but supply chain systems as a whole. The structural problems faced by this industry have led to many experts to wonder if this is the death of supply chain management.      

Legacy Technologies are dying

Supply chains are efficiently operated when managers have access to real-time data, but the limitation of technology and lack of automation in the industry can prevent “global end-to-end transparency,” which harms operations.

Although an automated supply chain would bring about a greater level of transparency and a more efficient supply chain, this would also be at the cost of many operations managed manually by people. Therefore, the survival of the supply chain partially comes at the expense of people getting their jobs transformed by automation.

Nevertheless, new technologies have the ability to dominate the supply chain industry within 5-10 years and make it sustainable and self-regulating by digitising labour-intensive and repetitive tasks. With the help of a new digital foundation, companies will be able to capture, assess, incorporate, easily access, and expound upon high-quality data in real-time. 

Many prominent companies have begun exploring the features and benefits of these types of technologies. For instance, some companies have started using robotics and/or artificial intelligence to digitise and automate some of the most monotonous, labour-intensive jobs within the supply chain. For example, Amazon Robotics developed robots to automate key aspects of the fulfilment process, which has led to improved operations and better customer experience. 

The End of the Linear Approach

 Although traditional, linear supply chains have been highly beneficial in the past,  they are becoming unsustainable, and inefficient. This method prevents companies from employing a customer-centric model, which is becoming prevalent due to the rise of e-commerce and electronic transactions. Therefore, most companies will need to upgrade their supply chain operations to boost customer retention and establish longevity thanks to the network supply chain approach.  

Technology has Not Killed the Supply Chain

On the other hand, other experts assert that A.I. and new technologies have not killed the supply chain. While the pandemic revealed apparent weaknesses in the supply chain, businesses that could pivot remained successful. By focusing on collaborations between managers, companies were able to ship goods and products and meet the demands of their customers. 

Even though the rigid nature of the system was partially at fault, managers soon realised that better transparency and communication made it possible for them to meet the collective needs of their demographics.

“Nothing is lost, Nothing is Created, Everything is Transformed”

Following those words of the French scientist Antoine Lavoisier, Supply Chain is neither dying nor thriving, rather it is being transformed.

According to Gartner, technology is essential to the evolution of the supply chain. Through a survey, Gartner found that 61% of respondents believe technology is a great tool for competitive advantage. Moreover, many respondents also asserted it has become critical to invest in these technologies, with 20% of the respondents investing in robotics. 

A Variety of Technological Evolutions Will Fuel the Future of the Supply Chain 

Overall, when it comes to technology and the future of the supply chain, there are a few things we can assume:

  • Although supply chain technologies are primarily one of the most pressing matters for industry leaders, technologies that advance human decision-making and manage resources at the edge are also major areas of focus. 
  • Various supply chain leaders consider technology a great tool to boost one’s competitive edge - emerging technologies can be used as a means of addressing digital transformation. 
  • Supply chain organisations should merge their technology portfolio and modernise their legacy systems to remain competitive and more sustainable. 

Transforming operating models and jobs

Although AI-managed supply chains can provide supply chain managers with plenty of benefits, they are not without their shortcomings. For instance, BCG’s analysis of supply chain KPIs from 2011 through 2020 discloses inadequate growth in addressing essential supply chain problems. During that time frame, delivery performance deteriorated autonomously of inventory and staffing levels. This was even true when companies enhanced inventory and recruitment levels at the inception of COVID-19. 

Disruptions are Even Faster Due to Startups' Creativity and Agility

Lastly, a rising number of startups and reputable logistics firms created a multi-billion-dollar industry with the help of the newest technology created to minimise the disruption. 

Nevertheless, those who foresee a way in which we can move forward without any disruption to the supply chain are likely to be unrealistic. According to experts, we must accept that some disturbances are inevitable, and the best we can do is simply plan ahead and develop contingency plans to allow us to overcome them as they arise. 

In the midst of the supply chain technological transformation, it's important for companies to adapt. Holocene aims to ease cross-border logistics and supply chain operations through a patent pending machine learning technology to increase efficiency and mitigate risks. Holocene offers error-free shipping across the globe, a single knowledge repository of global operations, and transparent analytics. 

If you would like to learn more, contact us today and schedule your demo

Romain Fayolle

Co Founder & Managing Director

Strong with 8 years of experience in different international industries, Romain wants to connect Logistics & Supply Chain leaders and professionals with the game-changing technology