CSCMP's Supply Chain Quarterly
December 15, 2017
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Let's throttle back a bit

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Disruptive supply chain technologies that could profoundly change the way we manage inventory, deliver products, and interact with customers are being developed—and implemented—at breakneck speed. Are we moving too fast?

POW! WHOOSH! ZOOM! As colorful, kinetic images quickly flashed by without letup, and startlingly loud sound effects and electronic music filled the auditorium, I found myself looking for something I could grip to anchor myself against the onslaught of images, noise, and information that seemed to hurtle off of three huge video screens at the front of the room. It was thrilling, and just a little bit disturbing.

Most startling of all, perhaps, is that this was not a music video or an IMAX film about superheroes fighting a special-effects-filled battle between good and evil. It was a video about supply chain technology.

The video was part of a keynote address by John Phillips, Pepsico's senior vice president, customer supply chain, at Gartner Inc.'s recent Supply Chain Executive Conference a detailed look at technologies that could have a profound effect on supply chain practices, costs, and performance. He brought the audience of 3,000 supply chain professionals up to date on where those technologies stand now and on their potential implications for supply chains. Many were familiar, but Phillips demonstrated that what you read last year, or even last month, about them is most likely out of date. Here are just a few examples from his presentation:

Converting vision to data—Pepsico is piloting a Bluetooth-connected camera that would look inside a grocery store refrigerated case when the door is open and send data to the cloud that could be used to manage store inventory.

Amazon GoAt these prototype grocery stores created by Amazon, a combination of computer vision, sensors, "shelf aware" data collection, and machine learning allows consumers to select, purchase, and check out entirely on their own, with no lines or manual payment transactions. Phillips called it an example of "frictionless commerce that can change purchasing behavior."

In-store robotics—Phillips lauded Simbe Robotics' "Tally" shelf-auditing robot, which can count and verify more than 20,000 stock-keeping units with more than 96 percent accuracy—significantly better than human inventory takers. He cited other companies like Savioke, Bossa Nova, and Fellow that have developed robots for similar applications. "This technology is maturing at light speed," he said, adding that companies should be looking at how it could be applied in warehouses and distribution centers.

Self-piloting aircraft— An Israeli company called Urban Aeronautics is developing a remote-controlled, load-carrying aircraft that can retrieve personnel and deliver supplies in dangerous areas, and the government of Dubai is launching a self-driving helicopter "taxi" that can carry a single passenger or a small amount of cargo. "Why couldn't something like this be used as a 'hotshot' shuttle to replenish retail stores?" Phillips asked.

Among the other technologies Phillips discussed were the wildly popular Amazon Dash buttons, which allow consumers to wirelessly submit preprogrammed orders for products they use frequently by simply pressing a button; crowdsourced delivery, which is quickly moving into the commercial shipment space; warehouse-inventory and package-delivery drones, which Phillips said offer "a strong business case"; automated vehicles for highway and last-mile delivery; augmented reality, which Pepsico is testing for technical and equipment service applications; and artificial intelligence.

Phillips' presentation was fascinating, even breathtaking. Yet I got the sense that, like Pepsico's intense video, technology development and adoption may be moving a little too fast, and that we all need to stop and think through the potential consequences before we go too far.

It's exciting to think about how these and other science-fiction-style technologies could change day-to-day supply chain activities and, longer term, our interactions with customers. But as our recent article "Disruptive technologies: Should you give them the green light?" makes clear, "hot" new technologies should be carefully evaluated before adoption if supply chains are to achieve the benefits they promise. Otherwise disruptive technology really will disrupt your business—and not in a good way.

Toby Gooley is Editor of CSCMP's Supply Chain Quarterly.

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