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Supply Chain Technology

Supply chain technologies: Hype, reality and future


Logistics and supply chain has long been an experimentation and proving ground for new technologies. Its very nature of large volume and quick turnaround provides limitless opportunity for vetting and versioning hardware and software developments aimed at streamlining operations.

Now the industry is once again facing a new wave of technological expansion, with exciting advancements already making their way into supply chains while others move into view. With all the anticipation, however, comes a solid dose of reality.

When anticipating what technology tools will move supply chain forward in the next few years, it helps to understand the realities of what it could take to implement them and whether they’re really ready to handle the tasks for which they have been designed.

Let’s take a look at three supply chain technologies, the hype surrounding them, the reality of where they stand now, and what the future might hold.


Blockchain: The Hype

Blockchain will revolutionize the way contracts and payments move through the supply chain and logistics industries.

Of all industries, logistics and supply chain is particularly excited about the potentials of blockchain technology. This type of shared, sequenced network allows organizations to exchange electronic “smart” contracts on a private record that could be updated and versioned between parties.

Blockchain technology is also attractive for its ability to maintain an indelible record of payments and accounting between parties along a given supply chain.

Blockchain: The Reality

Blockchain takes time and research to understand, and companies might be scrambling to figure out how they could leverage it, let alone implement it.

However, while many laud the concept for its simple elegance, blockchain implementation takes serious planning and cooperation. There remains much discussion and coordination to be had about how supply chains can incorporate blockchain in their processes.

In 2018, SAP Software Systems conducted a survey in 2018 of about 200 supply chain business leaders and managers who had indicated an interest in learning about blockchain as a future possibility. Despite their interest, the survey indicated only 3% of respondents were actively involved in using blockchain.

Though these professionals feel blockchain has the potential to increase future contract efficiency and safety, they were not at the point of implementation.

Blockchain: The Future

Blockchain was born with Bitcoin, a simple currency system. For blockchain technology to catch on with any ubiquity within logistics and supply chain, the technology must be adapted for the industry’s unique needs.

Also, the inherent interconnectedness of both the supply chain industry and the blockchain concept means that no one logistics company can move to using blockchain on its own. Major supply chain players will drive standardization of processes across the industry, including block sequencing, timing and basic governance.

Robotic Process Automation

Robotic Process Automation: The Hype

Automation will soon dominate warehouses, leaving no room for humans or need for innovation.

If some news coverage is to be believed, robots are automating humans out of jobs in just about every industry. They’re faster, more efficient — they don’t need bathroom breaks! — and they can optimize warehouses, running 24/7 and learning as they go.

Robotic Process Automation: The Reality

If any logistics manager is betting on robotic process automation to be the savior for all their on-site supply chain management challenges, they’ll need to keep praying.

Robotics in itself is a relatively old technology compared with some of its current cousins. In 2016, The Wall Street Journal reported an MHI and Deloitte survey in which about 35% of respondents at the time said they were using robotics into their supply chains. Further, the study estimated that portion is set to grow to 74% by 2026.

Statistics show that many logistics professionals are now experiencing the positive effects of robotic process automation, seeing how it can pick, pack and move product faster, more efficiently and more accurately than humans. This technology is already producing tangible benefits as robots think independently and collectively to optimize the pulling and packing process.

Robotic Process Automation: The Future

In another dose of reality, the field of robotics and warehouse process automation is massive and incorporates a number of facets that could have varying effects on the industry.

By taking on much of the physical work that comes along with warehouse operations, robots are expected to decrease safety risks for human employees. Some analysts think robotic technology could help reduce forklift-related injuries caused by human operators.

Despite the safety and productivity gains that come with incorporating robotic technology, some within the logistics industry are concerned about robots replacing humans in the workplace.  However, the more likely scenario is that companies will recognize that robotic technology can be best leveraged when augmented by humans.

AI/Machine Learning

AI/Machine Learning: The Hype

Integrating artificial intelligence and machine learning will solve common logistics problems by automating decision making.

It is exciting to consider a day when integrating artificial intelligence within the warehouse and throughout the supply chain can completely streamline processes down to a mathematical certainty.

Logistics and transportation operations are layered with decisions and adjustments that affect time and budget, and some are hoping AI technology can analyze, decide and realign processes more efficiently than any human.

AI/Machine Learning: The Reality

Artificial intelligence is absolutely still in its infancy, with some of the most interesting new developments being made in the logistics industry. One of the most commonly incorporated is machine learning, a branch of artificial intelligence that is incorporated within warehouse workflow. 

Machine learning is especially useful in industries that deal with large volumes of data, such as logistics. Machine learning allows a logistics system to consistently update and revise supply chain operations, gathering data about common patterns and predictors.

Despite the strides being made in machine learning, artificial intelligence continues to be laden with limitations and systems are not yet able to make complex decisions on their own.

AI/Machine Learning: The Future

AI and machine learning have a bright future within supply chain and logistics management. As customers demand more just-in-time deliveries and flexibility, saving every second of time will become increasingly more critical. Using AI, logistics operations can produce results more efficiently than ever before.

Like most supply chain technologies, AI and machine learning will rely on human input for their power to truly be maximized. For the foreseeable future, these systems, machines and online constructs will need human help to really make them shine.

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