What will the supply chain look like in 2018?

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The modern supply chain is evolving at an unprecedented pace, and flexibility, agility, and responsiveness are more important than ever. Once-linear processes (planning, buying, making, and moving) are now circular and intertwined.

As supply chain processes become more complicated, streamlining them is key to efficient growth. The inability to dynamically adjust and execute plans in response to fluctuating market conditions is a common barrier to streamlining supply chain planning and operations. Since the market is constantly changing, the ability to sense shifts in demand and to respond on a near-real-time basis is critical. And this ability requires next-generation technologies that connect data with people.

As this year progresses, linear supply chain operations processes will continue to be replaced by connected planning processes that empower dynamic decision-making. A fresh take on leadership and new governance models will be essential, which will allow organizations to account for factors like profitability when making decisions.

What will the supply chain look like in 2018? Here are five things I think we can expect.

A new retail landscape

Some retail organizations are thriving, and others, especially of the brick-and-mortar variety, are struggling. This year, retail supply chain managers will look for new routes to success. The key for traditional retailers will be to create a new retail experience that rivals the Amazon effect and offers customers value they can’t get from online retailers.

Through better planning and execution practices, retailers can gain an edge in the omni-channel environment. Supply chain managers who emphasize merchandise and assortment planning will make it easier for their employers to offer one-to-one marketing to consumers. In this way, brick-and-mortar operations can deliver a unique experience and offer more than just a place to shop.

Other possibilities for retail transformation include live inventory locations where goods are picked, packed, and shipped and customer service centers where associates provide value-added services. This year and beyond, the omni-channel model will continue to become the new normal.

Artificial intelligence and machine learning

History-based forecasting is used to drive supply chain planning, but artificial intelligence (AI) and machine learning (ML) are primed to change that forever. AI and ML predictions will play a key role in the future of supply chain operations and have a transformative effect on other business processes. AI- and ML-based predictive models will transform processes like demand sensing, shaping, and orchestration, as well as supply planning. AI will begin to drive dynamic pricing, and new-product introductions will be based on predictive market intelligence. AI and ML will also drive new models for product promotions management, as well as responses to disruptions in the supply chain.

Regulatory challenges and security risks

With the continued risk of high-profile hacks that compromise the information of millions of consumers, companies will need to raise the standards of their privacy and protection protocols this year. New regulations to protect privacy that go into effect this year, such as General Data Protection Regulation (GDPR), will also affect company operations. Tax reform, Brexit, political instability, oil prices, and resource availability will all require action across the enterprise, including within the supply chain. As a result, supply chain planners will need sophisticated modeling capabilities to plan for all potential scenarios.

Blockchain and beyond

Blockchain has already transformed the way trading partner networks collaborate. As 2018 progresses, the technology will continue to remove banks from the picture, leverage cryptocurrency and distributed ledgers, and enable better collaboration. Blockchain will also play a role in making collaboration a bigger factor in supply chain planning and execution. Track and trace, once a radio frequency identification (RFID)-focused movement, uses sensors and devices across assets and machines and will continue to be used in new ways this year. Thanks to the Internet of Things (IoT), data will permeate the supply chain and be used to transform processes once it is analyzed and consumed by AI and ML.

A dynamic, connected future

Supply chain managers are always looking for new ways to take advantage of opportunities and to overcome obstacles as the modern supply chain evolves. With a connected supply chain planning approach and the utilization of new technologies, data is brought together, and more people are integrated into decision-making processes. As the supply chain of the future comes into view, these trends will play a key role in supply chain transformation.

In today’s rapidly changing market, an innovative supply chain is more important than ever. If you’re interested in hearing from industry-leading companies about how to develop a supply chain that’s ready for the future, take a look at the supply chain track at Hub 2018, Anaplan’s connected planning conference, to be held March 5-7 in Las Vegas.

Note: A version of this post was originally published on EBN Online.

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