The gathering follows a unique format, whereby a panel of supply-chain executives offer their views on future trends, debate among themselves, then poll the audience, which votes by holding up one of two cards: a green “Agree,” or red “Disagree.” The event is moderated by Carl Guardino, president and chief executive officer of the Silicon Valley Leadership Group.
Here, then, are highlights of this year’s delve into the future of global business and the supply chain:
Prediction: Augmented and virtual reality “will eventually be as disruptive to commerce and supply chains as mobile and smartphones have been,” said Ray Ernenwein, director of e-commerce supply chain strategy and analytics with Walmart Inc. As proof, he cited the billions of dollars of investment in that emerging technology by big entities such as Facebook, Microsoft, Amazon.com, Google and, not incidentally, Walmart. Applications include item picking in the warehouse, training of associates and customer service. But the most disruptive impact, he said, will come in e-commerce, with A.R. and V.R. offering shoppers “immersive experiences.”
Response: Panelists mostly agreed, although Craig Cuffie, senior vice president and chief procurement officer of Salesforce.com, questioned whether existing use cases are doing much to integrate A.R. and V.R. into society. The audience, too, concurred, with some wondering whether the public might fail to embrace the technology as quickly as one might hope. “We’re in the very early days of A.R. and V.R. technology,” Ernenwein replied.
Prediction: Raging trade wars are forcing top executives to rethink where they’re sourcing product and why, said Rosemary Coates, chief executive officer of the Reshoring Institute. Natural disasters, such as the Japan tsunami, are further compelling them to address higher levels of risk. “It’s very scary out there at the moment,” she said, adding that current trends threaten to boost the cost of finished product to industry and consumers by 25 to 40 percent.
Response: General agreement from the panel, with one audience member optimistically suggesting that President Trump’s aggressive negotiating style might eventually be tempered, leading to relatively small tariff hikes in the end. Coates conceded that possibility, but nevertheless believes that C-level executives will begin rethinking their sourcing strategies as a function of more intense risk management.
Prediction: Autonomous robots, already a major presence in manufacturing, will continue to take manual and repetitive tasks away from humans, said Matt Yearling, chief executive officer of PINC Solutions. His company, a vendor of yard-management systems, is already deploying autonomous drones. “Eighty percent of organizations will have some form of robotics in their warehouses in the next five years,” he said.
Response: Agreement, although some audience members pointed out that warehousing remains a fragmented marketplace, and robotics technology for many is still too expensive in the short term. Yearling replied that UPS, for one, is using it today, and that robotics is a key tool for addressing the current shortage of warehouse workers.
Prediction: A severe talent shortage will continue for the next decade, said Cuffie. With economic performance at an all-time high, technology companies as well as warehouses are vying for a limited pool of workers. Making matters worse is the Trump Administration’s immigration policy, forcing a complete halt on some visas. “We’ve got to figure out how we do the work, and how we pay for it,” Cuffie said.
Response: Agreement from all, although some suggested that the crisis might be alleviated by new job-training programs being put in place at the community college level. (Ernenwein noted a “tremendous evolution” occurring in professional certification, including the growing popularity of “micro-credentialing” and online courses.) Still, an estimated 60 million people are projected to be exiting the supply-chain industry in the next 10 years, and only 49 million are estimated to be taking their place.
Prediction: Data analytics “will become so important a skill that it will be used across organizations – not just in supply chain but in finance and marketing,” said Coates. Companies need to acquire the capability to build on that tool to interpret and make use of the flood of data available to them today, she added. In the supply-chain arena, analytics will become crucial for assessing cost and risk associated with suppliers and manufacturing.
Response: Agreement all round.
Prediction: Spurred by regulatory changes and corporate sustainability programs, companies will be forced to increase their adoption of alternative power sources, as they compete in the “race to zero emissions,” said Yearling. Twenty percent of all trucks produced in the next five to 10 years will be zero-emission vehicles, he predicted.
Response: Split. Coates said Yearling’s timetable is too short. “While we adopt technology pretty fast,” she added, “I just don’t think that Class A trucking is going to get to it in five years. More like 10 to 15 years.” Audience members raised the possibility of delays in adoption caused by severe capacity constraints in producing batteries and electric vehicles.
Prediction: With data breaches hitting such major entities as Equifax, Target and Facebook, the U.S. government will adopt privacy standards similar to those of the European Union’s General Data Protection Regulation over the next 10 years, said Cuffie.
Response: Some disagreement, again as to the timetable. “I just don’t see government moving that fast,” said Coates. “There doesn’t seem to be any appetite to protect the consumer and buyer at the moment.” But Cuffie raised the specter of an organization such as Google knowing exactly where each individual is on the planet at all times. “Doesn’t that freak you out a little bit?” he asked.
Prediction: Artificial intelligence will become a key factor in problem-solving and everyday decision-making, said Yearling. He sees a surge in the use of A.I. for managing safety stock and cutting down on excess inventory within the next three years.
Response: Agreement from the panel; but from the audience, the usual reaction of “yes, but not that soon.” Yearling doubled down on his prediction, citing the growing popularity of A.I. and machine learning for making data-based decisions. “I think I’m being a little too conservative,” he said.
Prediction: Blockchain and 3D printing, two of the hottest topics in supply-chain technology, might be a little too hot for practical use today, according to Ernenwein. They’re at the peak of the “hype cycle,” he noted, but “the adoption rate to date has been limited.” While 3D printing is “beautifully transformative in concept,” the relatively low return on investment from current technology means it’s largely restricted to niche use cases. “Both technologies for the foreseeable future will remain limited in impact on the supply-chain area,” he said.
Response: Coates agreed that blockchain is currently overhyped, “because we can’t make the connection to the financial case.” But she expects to see wide adoption of 3D printing, which she said “is only going to grow.”