What’s the greatest challenge to a more tech-friendly supply chain?
Today’s supply chain-focused companies rely increasingly on data to drive core processes. Many warehouses and factories already experiment with simple artificial intelligence (A.I.) applications. Amazon might soon produce wearables for its employees (although the idea faces some privacy concerns), and the industrial internet of things (IoT) will reach a $934bn valuation by 2025, according to Grand View Research.
The biggest challenge to a more tech-friendly supply chain isn’t necessarily funding. Venture capitalists are investing billions in new technology to revolutionize the supply chain, and researchers are developing solutions that, by the end of the next decade, could significantly impact logistics management.
The problem is that we’re running out of runway. While it might seem as though we’re moving at light speed, it’s not fast enough to keep up with market demands. And the companies that don’t speed up risk becoming irrelevant.
The Challenge of Today
Consumers expect more from today’s supply chains, and they’re not waiting for workable solutions. Call it the Amazon effect: The e-commerce giant rewrote the fulfillment rules when it launched two-day shipping through Prime. The customer experience is now front and center, spurring warehouses to pick up the delivery pace.
This disruption doesn’t stop at the fulfillment center. It’s spilling over into manufacturing as well. Warehouses must rely on factories to deliver products and supplies more quickly to match demand, putting machinery under greater pressure. Companies can’t risk even a day of downtime. As a result, the broader implementation of industrial IoT sensors, which measure manufacturing performance and enable preventive maintenance, is quickly becoming a hot topic.
That doesn’t mean we stop thinking about production 10 or 15 years down the line. It means we must uncover and implement existing solutions, to improve performance and drive business value more quickly.
A Solution: Encourage Collaboration
Among the greatest stumbling blocks to supply chain success are organizational and industry silos. Fierce competition drives companies to closely guard their supply chain research and solutions. The downside: It’s entirely possible that the next blockchain or A.I. breakthrough is currently bring held behind high walls of security, rather than powering further research and solution development.
That’s why it’s time to take a more collaborative approach to supply chain innovation, especially between companies whose products serve different purposes. Take Georgia-Pacific: We’re known for our paper and pulp products, but we also manage a very complex supply chain. Restaurants, airlines, software developers, auto manufacturers — we make different products and offer different solutions, but we’re often using the same supply chains and supply-chain technologies.
If your organization is pursuing R&D around a supply-chain solution, consider teaming up with another organization already working with that technology to maximize your efforts.
You’ll find three key benefits to your partnership approach:
- A deeper culture. A partnership outside your company or industry sets the tone for collaboration within your own company. As a new generation of supply-chain professionals challenges the commonly recognized corporate structure, you’ll earn recognition for adapting to a new business environment — and create a pipeline of new talent.
- A different perspective. “If your only tool is a hammer, every problem looks like a nail.” “Two heads are better than one.” We might roll our eyes at these old sayings, but there’s a lot of truth to them. Joining innovators from outside your industry to drive R&D gives you a new set of tools to fix your outdated processes, and because you’re not competing for market share, you can engage in a free flow of ideas.
- A quicker return. Need help justifying collaboration for the c-suite? Building a team with a diverse range of experiences and capabilities drives quicker product development. You’ll put the solution to use faster in your warehouses and factories, and, ultimately, deliver products to market quicker. Bottom line: Collaboration generates faster returns for you and your partners.
Tomorrow is important. Today is crucial.
Change occurs within the supply chain breathtakingly fast. It’s important to keep thinking about big picture innovation, but time is not on our side. We can’t let ideas languish in development or let solutions to today’s problems sit idle on the shelf. To remain competitive, companies need solutions they can implement quickly. If you’re serious about adopting a new approach to innovation, consider how collaboration can benefit your company in both the short and long term.
Jim Braun is vice president of innovation at Georgia-Pacific Point A Center for Supply Chain Innovation.