8 Megatrends –
Continued from part one
There are eight megatrends that will impact all supply
chain leaders over the next decade. Here
we look at the last four of the eight megatrends.
Internet of Things
(IoT)
Gartner analysis estimates that the IoT will include some
26 billion Internet-connected physical devices by 2020.1 The Gartner
research shows by then, IoT product and service suppliers will generate
incremental revenue of more than $300 billion.
The connection of data specific to products and the flow of those
products from raw materials, to work-in-progress, to finished goods and their flows
across distribution networks to demand signals has enormous possibilities for
supply chain leaders.
Machine-to-machine
(M2M) Data
A key part of the IoT is machine-to-machine
(M2M) communication. Machina Research forecasts
that there will be 175 million machine-to-machine data connections in
manufacturing and supply chain by 2020.2 Fully automated factories have existed for some
time. An example is IBM and a “lights
out" keyboard manufacturing factory in Texas that is 100% automated.3
This has many implications for the end-to-end supply chain. As machine assembly costs are coming down and
machines are simpler to install, there will be broader adoption of interconnected
machines by leaders. As an example, initial
production runs can potentially be very small but still price-competitive. These types of installations and results can
only be completed profitably for those companies that have the tools to make
cost-to-serve tradeoffs using data including M2M efficiencies.
3D Printing
According to Gartner research, by 2018 at least seven of
the world's top ten multichannel retailers will use 3D printing technologies to
generate custom stock orders.4
It is forecasted that consumer and enterprise 3D printer shipments will
grow at a 95.4% compound annual growth rate (CAGR) and revenue at an 81.9% CAGR
from 2012 through 2017. The 3D printer market will grow from $288 million to
more than $5.7 billion by 2017 as consumer 3D-printing hype accelerates 3D
printer purchases by enterprises worldwide.
With a growing set of materials that can be used to print in 3D devices,
these trends will impact inventory, distribution, and postponement strategies
for a number of industries.
Analytics - Predictive and Prescriptive
Combining advanced predictive and prescriptive analytics to the IoT and M2M data,
there is more possibility for acceleration of change and innovation. Analytics tools will pull together data sets
that a human mind cannot do alone. A new class of smart machines will disrupt current
business models, organizational structures and staffing strategies.5
Specific to supply chain leaders, this will cause further tradeoff challenges
and opportunities related to setting optimal supply allocations and service
level targets. Gartner anticipates at
least three broad classes of smart machines:
- Movers—machine-based transit: Application to various modes of inventory movement up and down the value chain.
- Sages—information-based helpers: Application to supply chain planning and financial tradeoffs.
- Doers—machine-focused helpers: Application to supply chain execution through predictive manufacturing and distribution failure analysis and resolution.
2.
Machina
Research finds that driving supply chain efficiency is a EUR13.5 billion
opportunity for M2M
