The Supply Chains of Tomorrow: Trends & Topics

For the logistics industry, the pressure is on to innovate. Today’s shippers and supply chain professionals know that we’re in the middle of a paradigm shift — but how can we drive change in our own companies? Gaurav Pant, Chief Insights Officer at Incisiv, sums it up nicely: “Competing in a world of infinite customer choice and increasing distribution complexity will be impossible for firms that don’t upgrade their supply chain innovation and agility quotient.”

A recent study by JDA and KPMG shows that supply chain execs are already investing in a raft of new technologies to achieve this agility, with a major emphasis on improving end-to-end visibility and traceability — necessary prerequisites for a truly autonomous supply chain. These technologies include cognitive analytics, AI and machine learning. Participants in the study said cognitive and predictive technologies are top priority because they have the biggest potential to produce profitable use cases — and, more importantly, they’re already having a disruptive impact.

This month, we looked at the decentralization trend and how the networks of tomorrow will need to be much more sophisticated, able to provide more inventory closer to customers in order to achieve faster deliveries. Supply chain professionals are looking at predictive technologies as a way to transition into this future by helping them optimize inventory and predict distribution patterns. Artificial intelligence will be the key that helps companies unlock insights from customer data while also making recommendations to optimize existing distribution networks.

Many of the study participants identified resistance to change as the primary obstacle that prevents them from driving innovation. Interestingly, professionals at MIT identified this problem some time ago and took action. They noticed that much of supply chain management education teaches students to defend their proposals using “math, science, logic, and sophisticated models backed up with facts and details.” Yet in their future careers, these students will often find themselves in large corporate structures where fact-based persuasion may be ineffective:

For one thing, large corporations are made up of all kinds of people, not just engineers and scientists. Think about all those colleagues who majored in art history, foreign languages, political science, and philosophy. What motivates them? In fact, many organizations — especially companies who sell fashion or trendy items to consumers — are led by artistic or marketing “geniuses.” These creative geniuses, as well as most “regular people,” are not quantitatively trained and are typically not swayed much by logic and details.

In response to this, MIT’s Supply Chain Management Program created and instituted the “VELD” model (Vision, Emotion, Logic and Details), fashioned after Aristotle’s classic “artistic proofs” or modes of persuasive rhetoric: ethos, pathos and logos. MIT hopes to give their supply chain students a more well-rounded persuasive toolkit in order to combat organizational resistance to change — a critical skill set in a world that sorely needs innovation.