Disruptive Innovations and their applications in Supply Chain Management – by Abhilasha Satpathy, DCMME Center Graduate Student Assistant

Procurement and supply chain are at the cusp of a disruption with AI, IoT and blockchain technology. A digital transformation is ensuing with the promise of greater efficiency in business processes, operations, transparency and security.

Spend analysis

Spend analysis used in strategic sourcing, needs a shift from the traditional descriptive analytics model to more predictive and prescriptive analytics. Organizations can develop tools to enhance their spend analysis with public domain data — from social media, weather data, demographics, suppliers, competition and logistics to name a few — to help uncover insights that can save money and improve supply chain.

 

Supplier lifecycle management

The traditional supplier lifecycle management platform, when augmented by big data from the public domain, can offer meaningful information on suppliers and supply chain risks. An IoT solution can be employed to track the quality of the product at various stages of the supply chain thus improving the efficiency in the process and providing the metrics for supplier evaluation.

 

Strategic sourcing

Supplier bids are collected using online sourcing events, but a large part of the sourcing evaluation and award process is manual in nature. Using blockchain for through all steps of the process — proposals, quotes and bids — or auction, can offer greater efficiency and transparency.

 

Contract management

A blockchain platform and its smart contract framework coupled with IoT and AI, can help facilitate greater efficiency in compliance and obligation management. AI can help develop smart wizards to build contracts based on responses to specific questions and can further be enabled for pattern recognition to identify changes to standard clauses or introduction of non-standard clauses.

Order management

The traditional order management system is internal to any organization and facilitates the fulfillment process. Blockchain platform powered with AI and IoT can drive greater efficiency in orchestrating and streamlining purchase orders, shipment details, trade documents, goods receipts, quality assurance documents, returns and accounting.

Logistics

The logistics industry is an early adopter of AI, IoT and Blockchain, and is already reaping great business benefits. IoT in the logistics ecosystem can provide great insights on inventory management, shelf life, storage temperature, delivery routes, real-time tracking of freight and more

 

Reference:

https://www.ibm.com/blogs/blockchain/2018/04/digital-transformation-next-gen-procurement-and-supply-chain/

 

Questions:

  1. How are AI, IOT and blockchain transforming the logistics industry?
  2. How is blockchain helping in order management?
  3. How can AI help in contract management ?

IOT Increasing Operational Efficiencies – by Abhilasha Satpathy, DCMME Center Graduate Student Assistant

Indeed, the IoT is set to revolutionize the supply chain with both operational efficiencies and revenue opportunities made possible with just this type of transparency. In today’s market, supply chain isn’t just a way to keep track of your product. It’s a way to gain an edge on your competitors and even build your own brand. The following are a few areas of operations where we’ll be seeing the most advancement and change with the ever-advancing Industrial IoT.

Operational Efficiencies

When it comes to operational efficiencies, the IoT offers:

  • Asset Tracking: Tracking numbers and bar codes used to be the standard method for managing goods throughout the supply chain. But with the IoT, those methods are no longer the most expedient. New RFID and GPS sensors can track products “from floor to store”—and even beyond. At any point in time, manufacturers can use these sensors to gain granular data like the temperature at which an item was stored, how long it spent in cargo, and even how long it took to fly off the shelf. The type of data gained from the IoT can help companies get a tighter grip on quality control, on-time deliveries, and product forecasting. Not too shabby.
  • Vendor Relations: The data obtained through asset tracking is also important because it allows companies to tweak their own production schedules, as well as recognize sub-par vendor relationships that may be costing them money. According to IBM up to 65% of the value of a company’s products or services is derived from its suppliers. That’s a huge incentive to pay closer attention to how your vendors are handling the supplies they’re sending you, and how they’re handling your product once it’s made. Higher quality goods mean better relationships with customers—and better customer retention overall.
  • Forecasting and Inventory: Another bonus: IoT sensors can provide far more accurate inventories than humans can manage alone. For instance, Amazon is using WiFi robots to scan QR codes on its products to track and triage its orders. Imagine being able to track your inventory—including the supplies you have in stock for future manufacturing—at the click of a button. You’d never miss a deadline again. And again, all that data can be used to find trends to make manufacturing schedules even more efficient.
  • Connected Fleets: As the supply chain continues to grow—upward and outward—it’s even more imperative to ensure that all your carriers—be it shipping containers, suppliers’ delivery trucks, or your van out for delivery—are connected. Again, the data is the prize. Just like cities are using this data to get to emergencies quicker or clear up traffic issues, manufacturers are using it to get better products to their customers, faster.
  • Scheduled Maintenance: Of course, the IoT can also use smart sensors on its manufacturing floors to manage planned and predictive maintenance and prevent down-time that can cost so much.

 

References:

https://www.forbes.com/sites/danielnewman/2018/01/09/how-iot-will-impact-the-supply-chain/#7128f2f63e37

Questions:

  1. How can IOT increase operational efficiencies?
  2. How does IOT improve forecasting and inventory ?
  3. How can IOT used for asset tracking ?

 

 

 

Autonomous robots and drones – Streamlining Supply Chains by Abhilasha Satpathy, DCMME Center Graduate Student Assistant

Five examples of how autonomous robots and drones can work to streamline the supply chain and make it more efficient :-

  1. Perform product development tasks: When autonomous robots are set up to perform continuous, repetitive tasks, product development, and prototyping activities can benefit from around-the-clock testing for fatigue, damage tolerance, and quality. This frees up product development professionals to work on more important tasks.
  2. Enable better inventory management and easier cycle counting: When handled by aerial robots, these tasks produce more accurate supply-demand reconciliation and replenishment needs, ultimately reducing on-hand inventory.
  3. Enhance warehouse operations: Autonomous Drones can be used in various warehouse operations, from inbound logistics in time-critical situations; carrying materials from storage to the factory; transporting directly from receiving to shipping; or efficiently scanning inventory and significantly reducing labor costs.
  4. Improve accuracy on mundane tasks: Robotic process automation in standard sourcing processes can reduce effort and time requirements and improve the accuracy of mundane tasks.
  5. Reduce cross-docking times and speed up shipment deliveries: Autonomous vehicles with self-guiding abilities can reduce cross-docking times and improve accuracy and rates of picking, packing, sorting, and labeling of items. This, in turn, increases perfect order rates and potentially drives higher customer satisfaction levels.

References: https://www.supplychain247.com/article/5_ways_to_streamline_supply_chain_logistics_operations_with_robots_drones/Drones

Questions:

  1. How is robotic process automation reducing effort and time requirements of mundane tasks ?
  2. How are robots enabling better inventory management ?
  3.  How do autonomous drones enhance warehouse operations ?

SELF DRIVING VEHICLES-Disruptive Innovations transforming the Future of Supply Chains by Abhilasha Satpathy, DCMME Center Graduate Student Assistant

SELF-DRIVING VEHICLES

News headlines continue to spread the word about self-driving vehicles, often emphasizing the potential for passenger cars to gain mass traction. Supply chain and logistics professionals, however, are considering the ways this new technology could dramatically alter their operations.

Driverless trucks have the potential to reduce labor costs and increase efficiency—after all, a driverless truck can travel straight to its destination without breaks for sleep and food. And self-driving vehicles could also be used to transport items inside warehouses and other facilities.

“Self-driving vehicles unlock new levels of safety, efficiency, and quality within the logistics sector,” Hewitt says. “They will transform the supply chain by autonomously loading and transporting all shapes and sizes of products.”

The ongoing commercial driver shortage appears certain to intensify in the near future, especially if the economy improves. Waggoner cites the possibility of the United States being 175,000 drivers short of demand in a few years. This shortage will likely play a major role in debates over the viability of driverless vehicles.

“The worsening driver shortage will put pressure on pricing and capacity,” he says. “That may not be enough to accelerate their implementation, but driverless trucks could help alleviate the problem.”

No matter the obstacles, supply chain executives see the move to self-driving vehicles as inevitable—a matter of when, not if.

 

References:

https://www.inboundlogistics.com/cms/article/6-technologies-guaranteed-to-disrupt-your-supply-chain/

Questions:

  1. How will the shortage of commercial drivers affect the supply chains?
  2. How will the driverless vehicles affect the logistics?
  3. How will the driverless vehicles enhance safety and efficiency of supply chains?

 

3D PRINTING – Disruptive Innovations transforming the Future of Supply Chains by Abhilasha Satpathy, DCMME Center Graduate Student Assistant

The real breakthrough in the supply chain domain is the arrival of 3D printing as a serious competitor in finished product markets. The technology is slowly gaining acceptance in applications that are “taking it from the prototype to the production-grade stage for smaller components.” The potential changes are many.

Here are a few possibilities.

3PL to Manufacturer 3PL

A new type of 3PL could emerge that offers manufacturing services through 3D printing.  Operators like UPS are well positioned to take on this role because a number of intellectual property issues must be resolved before AM methods become ubiquitous. As a trusted third-party provider, UPS has the market stature and scale to function as a new type of hub where products are made, assembled, and distributed.

A New Breed of Agile Supply Chains

With 3D printers operating as standalone installations in strategic locations, companies could manufacture in short runs at multiple sites across the globe. The networks would flex with shifts in demand by reconfiguring the manufacturing nodes or by adjusting machine outputs. Production units shift rapidly from one product variant to another without the need for retooling or lengthy line delays. The AM model also offers tremendous opportunities to cut inventory costs, because there would be less need for inventory. The management of raw materials inventory also would be streamlined as production processes generate less waste.

Streamlined Maintenance

Armed with 3D printing, machine repair services “don’t have to have every single component; you can print components when needed,” says Ulrich. Positioning parts inventories would become much less of a challenge for teams in the field.

Extreme Just-in-Time

A flexible, highly adaptive network of 3D printing installations could take just-in-time and postponement operations to new levels of efficiency. AM methods could be used to produce precise quantities of customized components very late in the final production cycle when more accurate demand information is available.

New Risk Management Dimensions

Opportunities for improving risk management represent another potential benefit of AM-based manufacturing. Low market-entry barriers and the ability to retool quickly reduce business risk. The technology also provides companies with a rapid-response mechanism when an unforeseen incident disrupts the supply chain.

Green Premium

Since additive fabrication is less wasteful than traditional production processes, it reduces carbon footprints. Similar benefits accrue from innovations such as Oxman’s revolutionary design processes that increase functional efficiency, while reducing material content.

References: https://ctl.mit.edu/sites/ctl.mit.edu/files/library/public/Disruptive_Innovations4_1.pdf

Questions:

  1. How are supply chains changing due to 3D printing?
  2. How does 3D printing help in making the manufacturing industry more green?
  3. How is 3D printing helping in risk management?

 

DRONES IN GLOBAL SUPPLY CHAINS by Abhilasha Satpathy, DCMME Center Graduate Student Assistant

Two years ago, in an article in SCMR author Nick Vyas outlined real-life applications for drones in the healthcare industry, and predicted other use cases such as pipeline inspections or deliveries of parts and supplies in hard to access areas.

He also noted that “PINC, a provider of yard management systems, has deployed a solution that utilizes drones to identify the location of trailers, shipping containers, and other assets in hard to reach areas. Equipped to carry GPS, RFID, OCR, and barcode readers, the drones can fly overhead to quickly locate and identify assets that have been tagged in a yard or port.”

So, what is the state of drones in the supply chain today?

Companies are focused on improving inventory accuracy to achieve higher supply chain velocity. Tasks like taking inventory and cycle counting are still carried out by humans which can be done more than 300 times faster by drones.

What is the state of the technology? Today, the drone, or robot, flies autonomously in a gps-denied environment using advanced sensors. The company’s warehouse management system (WMS) feeds existing inventory information to the PINC application via integration. When the robot receives a task to count inventory – say the number of cartons on pallets in a storage bay – the software first creates the optimal path for the drone to travel based on mapping done previously.

The drone doesn’t need markers or lasers for guidance to navigate through warehouses. The robot is equipped with an optical system combined with computer vision and deep learning technologies. When it passes through an assigned location, which it knows by the X, Y and Z coordinates, it visually inspects inventory labels and takes photos of the inventory to be counted.

The digital images are processed in real time to generate a count, which is compared against the known count in the WMS system. Since the system manages by exception, after taking inventory, the application provides an exception report to the operator who can click on the exceptions, look at a photo to confirm a count and then, if needed, update the WMS.

Down the road, Yearling expects conversations about using drones in transportation to continue, if for no other reason than the amount of spend on transportation.

References:

https://www.logisticsmgmt.com/article/the_emerging_role_for_drones

 

Questions:

  1. How are drones being used in supply chain today?
  2. How do drones aid Warehouse Management Systems?
  3. How do drones improve inventory accuracy?

BLOCK CHAIN MAKING GLOBAL SUPPLY CHAINS BETTER by Abhilasha Satpathy, DCMME Center Graduate Student Assistant

When an E.coli outbreak at Chipotle Mexican Grill outlets left 55 customers ill, in 2015, the news stories, shutdowns, and investigations shattered the restaurant chain’s reputation. Sales plummeted, and Chipotle’s share price dropped 42%, to a three-year low, where it has languished ever since.At the heart this crisis was the ever-present problem faced by companies that depend on multiple suppliers to deliver parts and ingredients: a lack of transparency and accountability across complex supply chains.

Now, a slew of startups and corporations are exploring a radical solution to this problem: using a blockchain to transfer title and record permissions and activity logs so as to track the flow of goods and services between businesses and across borders.With blockchain technology, computers of separately owned entities follow a cryptographic protocol to constantly validate updates to a commonly shared ledger. A fundamental advantage of this distributed system, where no single company has control, is that it resolves problems of disclosure and accountability between individuals and institutions whose interests aren’t necessarily aligned. Mutually important data can be updated in real time, removing the need for laborious, error-prone reconciliation with each other’s internal records. It gives each member of the network far greater and timelier visibility of the total activity.

In a nutshell, this is a global system for mediating trust and selective transparency. Although much attention and money has been spent on financial applications of the technology, an equally promising test case lies with global supply chain relationships, whose complexity and diversity of interests pose exactly the kinds of challenges this technology seeks to address. The technology can reveal  hidden information and allows users to attach digital tokens — a unique, negotiable form of digital asset, modeled on bitcoin — to intermediate goods as they progress along the production, shipping, and delivery phases of a supply chain and as title to them passes between different players. This could give businesses far greater flexibility to find markets and price risk, by capturing the value that they have invested in the process at any point along the chain. What we end up with are dynamic demand chains in place of rigid supply chains, resulting in more efficient resource use for all.

Various endeavors have already started.Walmart is working with IBM and Tsinghua University, in Beijing, to follow the movement of pork in China with a blockchain. Mining giant BHP Billiton is using the technology to track mineral analysis done by outside vendors. And many more such examples.Advances in chip and sensor technology, which can translate data from the automated movement of physical goods, should greatly enhance these emerging blockchain systems. It could be especially powerful when combined with “smart contracts,” in which contractual rights and obligations, including the terms for payment and delivery of goods and services, can be automatically executed by an autonomous system that’s trusted by all signatories.

But this technology’s potential traceability and automation benefits don’t just pertain to things; it could also keep human beings in check. Staff and supervisors from different vendors can be granted special, cryptographic permissions, which, when placed into a blockchain environment, would appear as unique, traceable identifiers — preferably encrypted, to protect the employee’s personal information. This would allow all members of a supply chain community to monitor the activity of each other’s credentialed staff. This kind of provable, transparent credentialing will be especially important for additive manufacturing, which is central to the dynamic, on-demand production model of the so-called Industry 4.0 movement. These potential efficiency improvements, enabled by hitherto unavailable information, suggest blockchain technology could deliver vast savings for companies everywhere.

Please see the link for reference:

https://hbr.org/2017/03/global-supply-chains-are-about-to-get-better-thanks-to-blockchain

Questions:

  1. How is blockchain a global system for mediating trust and selective transparency?
  2. How is blockchain creating automation in industries?
  3. How is blockchain changing the rigid supply chains to dynamic demand chains?