The ongoing COVID-19 pandemic has put the global supply chain in the spotlight. Supply chain transformation has become one of the most discussed topics among politicians, business leaders and frankly everyone around the world that has been impacted by this pandemic. In his blog post “A Post COVID-19 Outlook: The Future of the Supply Chain”, Eric Buatois, general partner at BGV, examined how the pandemic crisis is shaping the global supply chain. As a result, we foresee an ever growing number of supply chain tech startups emerging and gaining momentum post-COVID-19.
In this blog Jenifer Liu (BGV intern and MBA graduate at Kellogg School of Management), working with Eric Buatois and Yash Hemaraj (BGV Partners) shares her perspective on the future of supply chain tech.
What is Supply Chain Tech?
In contrary to the common misperception that “supply chain is logistics”, supply chain is defined as the end-to-end process to serve your customers, starting from the engineering teams designing a product, to receiving the first order, and to delivering the products to the end customers. The opportunity for tech enabled process improvement is huge and the scope is vast. As an investor or a business leader, it is critical to distinguish hype from scalable solutions, and to tailor your supply chain transformation strategy to your organizational needs. Below are three trends we predict as the next wave of accelerated supply chain digitization takes place.
B2C SMBs Among Early Adopters of Supply Chain Tech
The pressure faced by B2C small-to-medium sized businesses (SMBs) under the current pandemic is twofold. Taking e-commerce platforms as an example, on one hand, they need to continue to drive customer growth while keeping up their operational performance, that is, to avoid stockout and to deliver products on time.On the other hand, they are limited by resources and will probably not be able to add new hires for a long time. For these SMBs, being capable of achieving operations efficiency and supply chain agility in this difficult time can mean life or death. So how can supply chain tech help? Unfortunately, today many of these businesses run their supply chain through a combination of Excel spreadsheets, emails and phone calls. Those selling physical products often outsource their manufacturing to overseas suppliers, adding another layer of complexity in tracking supplier communications. The soaring demand for automation and relatively low barrier to entry make B2C SMBs the ideal customer segment for off-premise workflow automation SaaS solution providers. The opportunity lies in each step of the product fulfillment process. For example, a solution to seamlessly link customer orders with automated purchase orders, coupled with supplier communications all in one place can add tremendous value.
Next Gen Orchestration and Analytics
We have observed two key challenges for existing supply chain analytics solutions to gain momentum: system integration and data quality. A number of these solutions today target at enterprises of all sizes. They often spend a significant amount of time integrating their solutions with existing legacy systems and cleaning legacy data. As supply chain tech adoption among SMBs accelerates, data quality control will be notably improved at the time of data entry, creating a new generation of data that is “analytics ready.” There will be a market demand for orchestration and analytics solutions that are built on top of the emerging workflow automation software. Because the current enterprise analytics market is fairly saturated, the next generation of supply chain analytics tools need to find their unique product-market fit through offerings such as off-the-shelf supply chain analytics modules that apply machine learning techniques to automatically generate insights and predictions with a simple user interface that is non-data-scientist friendly.
Connected and Autonomous Manufacturing
Imagine a future where manufacturing decisions are made real-time and products are manufactured and delivered with minimal human touch. In the post-COVID-19 world, we might have just got closer to that vision, as organizations recognize the urgency of building a more transparent and resilient supply chains. Unlike SMBs, the hurdles towards supply chain digitization in large enterprises are high – the complex nature of the product and business, the existing legacy systems, just to name a few.Nevertheless, there are still opportunities with the potential to create business impact in the short to mid-term. One opportunity is to deploy Industrial Internet ofThings (IIoT). The novel dataset collected through IIoT provides real-time insights of the production floor and can be leveraged in various areas such as asset monitoring and predictive maintenance, creating immediate savings opportunities for organizations. Another opportunity is to automate production and logistics activities through robotics. Gartner predicts that by 2023, more than 30% of large enterprise supply chain organizations will have invested in at least one autonomous mobile robot (AMR). With the emerging business model of Robot as a Service (RaaS),deploying robotics is becoming more economically favorable. However, it is safe to assume that having cobots work alongside humans is a more realistic short-term goal for most organizations.
Times of uncertainties often bring unparalleled opportunities. As companies navigate through the uncharted territory of the post-COVID-19 world, It is time to be bold and creative in reimagining the future of supply chain.
