“The internet of things is the result of connecting collectors, sensors, smart phones – all kinds of things – with the internet,” says Sherman, principal essentialist at Trissential. It is the natural follow-on to Web 1.0, “which was mostly static web pages,” and Web 2.0, “which was more interactive and collaborative,” he says. “Now we have this network of interconnected nodes that gives us unprecedented ability to connect people and things and all of the data in the supply chain.”
Instead of a linear supply chain where things don’t work together, “we can now create an optimally performing network that I call the smart supply network – or, taking it one step further, Smart Supply Network 3.0,” he says.
Some companies already are implementing this type of highly responsive network, which can collect data in real time and make corrections to the flow of goods as demand changes, says Sherman. “Procter & Gamble is talking about updating S&OP on a daily basis, and they are using real-time data and business intelligence to take corrective actions twice daily for some for high-volume products,” he says. “That takes lot of the cost and uncertainty out of the supply network.”
IBM also is applying Web 3.0 capability to improve overall performance, Sherman says. “IBM is using the cognitive and decision support capability demonstrated by Watson to develop predictive analytics that determine what is likely to happen and then optimize the supply chain based on that likely scenario, he says.
This doesn’t mean that supply chain planners will become obsolete, but their roles may change. Sherman says more emphasis needs to be placed on demand management. “I think companies need a chief demand management officer to oversee all demand planning and management within an organization,” he says. “Demand management is critical to a company’s financial health, and investments need to be made to take advantage of the new wealth of data and cognitive capabilities,” he says.
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