The past years have been characterized by a myriad of interconnected phenomena that have led organizations globally to experience dramatic shifts in their supply chain. From large multinationals to smaller businesses serving localized clientele, factors such as the increased sustainability regulations, transitions to e-commerce, the COVID-19 pandemic, and war conflicts have affected all and sundry.
These macro-economic and geopolitical variables underscore the importance of consistent foresight and a future-orientated approach to supply chain innovation. Put simply, we may not know the next disruptive force, but we can be sure that there will be one.
This is the first in a series of blogs focused on how to spark supply chain innovation within your organization and the different ways that businesses can implement a future-oriented model into their approach using the ITONICS software suite.
In this first part, we look at the forces shaping the future and the key technological innovations influencing the supply chain in various industries. We also discuss how you can best optimize your foresight capabilities to meet current challenges and identify relevant trends, technologies, and suppliers to tackle them.
The Energy sector will rely heavily on circular operational models and practices as organizations aim to transition from fossil fuels to renewable energy. Governmental and ESG regulatory pushes will force organizations to examine the sources of energy used in their supply chain; this may give rise to new, innovative business models in the next decade. Assets critical to the fossil fuel industry could yet be transformed and lead to novel, sustainable practices that could positively influence the energy supply chain for various other industries that rely on energy. These innovations could range from repurposing oil fields as carbon storage units, converting pipelines, and recycling electric vehicle (EV) batteries to meet the growing cobalt demand.
Spotlight Technology for the Energy Sector: Distributed Energy Resources (DERs)
DERs are energy generation and storage systems that are located near the point of use. Enabling technologies include fuel cells, microturbines, reciprocating engines, load reduction, and electronic interfaces. This technology is changing how power is generated and transmitted, and increased demand for electricity, individual consumer control, and cleaner fuel is driving its development and uptake. DERs use the renewable energy sources available in a region, revolutionizing the relationship between electricity providers and consumers. Transitioning to a community-based energy model could lead to economic empowerment and more sustainable resource management, particularly in emerging economies. A current drawback of this technology is that it requires extensive investment into reforming grid infrastructure.
Fast-Moving Consumer Goods
Disruptions to the food & drink industry have persisted since the start of the pandemic. Labor shortages and transportation bottlenecks have exposed vulnerabilities, especially in global supply chains. The situation is made worse by increasingly severe and frequent weather events. As a result of these factors and global conflicts involving key players, the cost of doing business and, in turn, food prices continue to rise. To break this cycle of disruption and inflation, food & drink producers are seeking ways to improve the resilience and agility of their supply chains—from localizing production and reducing wastage to digitalizing and automating workflows.
Similar to the retail space, the food & drink industry experienced massive disruption due to the pandemic. Restaurants, supermarkets, and food & drink manufacturers rushed to meet their customers online with e-commerce solutions and on-demand (contactless) delivery. Lockdown periods accelerated the rollout and adoption of these solutions. While some habits are likely to revert to pre-pandemic “normalcy,” the online presence of the food & drink industry and demand for direct-to-consumer services will have permanence. This will require infusing technology (e.g., AI, automation, IoT, and dynamic routing) into existing distribution and delivery models to streamline operations and elevate the customer experience.
Spotlight Technology for the FMCG Sector: Intelligent Manufacturing
Intelligent Manufacturing involves applying artificial intelligence to the physical aspects of a manufacturing process. Intelligent Manufacturing seeks to increase productivity, improve product quality, reduce costs, and minimize equipment downtime. Intelligent Manufacturing uses real-time data from sensors, artificial intelligence (AI) and machine learning (ML) platforms, and the internet of things (IoT) to examine the health of the manufacturing equipment and processes, predict critical events and take preventative action to avoid these problems.
Infusing the manufacturing process with IoT and AI allows for greater visibility and traceability. Manufacturers can track ingredients as they come into the factory and are incorporated into end products. This can prove especially useful in the event of a contamination issue or recall. Additionally, the ability to track items through the production line helps close the gap between suppliers and customers, establishing farm-to-fork traceability.
The COVID-19 pandemic continues to impact global retail supply chains as major manufacturing countries across the Asia-Pacific region experience factory shutdowns, and ocean freight prices are at record highs. Add to this the knock-on effects of the Ukrainian conflict on sectors such as gas and agriculture, and the need for supply chain innovation and resiliency becomes a clear necessity and not a nice-to-have. As a result, retail brands are pouring resources into fortifying their supply chains. Strategies range from reshoring and distributed manufacturing and supply bases to optimized workflows that prioritize technologies like AI and ML, IoT, and robotic process automation (RPA). The sustainability of supply chains is also a growing imperative, with consumers demanding good corporate citizenship, transparency, and the ability to trace goods to origin.
Spotlight Technology for the Retail Sector: Unmanned Deliveries
Unmanned Deliveries refer to the use of autonomous vehicles, drones, or robots to support ground delivery services. This state-of-the-art technology disrupts the supply chain ecosystem with faster delivery, greater cost-effectiveness, improved sustainability, and increased accessibility in hard-to-reach regions. Unmanned deliveries can revolutionize last-mile delivery—which is the most expensive and time-consuming part of the delivery journey. Automating this stage significantly reduces the human resource and capital inputs like drivers and vehicles, resulting in cost savings for retailers and making same-day service scaleable. It is also a viable solution for connecting underserved communities and remote areas.
Our Retail Industry Report goes in-depth on the game-changing innovations taking place in the retail sector.
The automotive industry is also quickly adopting intelligent manufacturing processes that rely on digital supply networks embedded with technologies like industrial IoT, 5G, AI, and digital twins. However, many challenges remain, including the high cost of retrofitting older factories, technology skills shortages, and cultural resistance associated with job loss arising from automation. While implementing smart factories comes with a high degree of complexity, there are several gains to be made in productivity, customization, response times, energy, and overall cost.
Spotlight Technology for the Automotive Sector: Edge Computing
Edge Computing is a computing framework in which data processing occurs closer to the data source––such as IoT devices––instead of in central cloud servers. The shift improves bandwidth availability and reduces latency, speeding up analysis and response times. Edge Computing is used in smart homes, autonomous vehicles, and communication applications (including gaming) that require low latency and is expected to have further applications in various sectors. One potential limitation of processing data at the “edge” is that only data deemed as relevant is backed up to the central servers, which could result in the loss of some valuable data. With Edge Computing, autonomous and connected vehicles become repositories of data that can underpin mobility-as-a-service offerings. Third parties can use generated data to extend mobility services related to navigation, ride-sharing, and traffic flow guidance. This requires interoperable systems that facilitate the sharing and integration of data between mobility partners and users.
Identify Relevant Trends, Technologies & Suppliers for Your Business with the ITONICS Software
The ITONICS Innovation OS helps organizations discover, collect and evaluate emerging trends and technologies in a single point of truth to enhance strategic execution. The automatic discovery of weak signals from a wide variety of sources globally speeds up the scanning and scouting processes and assists teams in the systematic organization and evaluation of elements, making sense of large amounts of data.
To take the first step to better understanding the forces of change in the supply chain in your sector using the ITONICS software suite, check out our How-To Guide. The guide also includes best practices on how other industry leaders scan and scout to identify new opportunities.
If you want to learn more about the features and functionalities of the ITONICS software suite to innovate your supply chain management, get in touch with one of our experts for a personal demo!