Future supply chains could be smarter than their designers

Ten years from now, will your supply chain be smarter than you are? That question might sound strange now, but it could make perfect sense in another decade or so, if a report issued by IBM earlier this year proves to be on the mark.

The supply chain of the future will have to be "instrumented, interconnected, and intelligent," according to The Smarter Supply Chain of the Future: Global Chief Supply Chain Officer Study. That prediction was based on the results of nearly 400 interviews with top-ranking supply chain executives representing 29 industries in 25 countries. The inaugural study, conducted by IBM Global Business Services' Supply Chain Management Practice in mid-2008, was released by the IBM Institute for Business Value.

What does "instrumented, interconnected, and intelligent," mean? Supply chain professionals will be working in a highly automated world, respondents believe. Some information that formerly was created by people will be generated from sensors, RFID tags, meters, global positioning systems (GPS), and other technologies. The report describes a science-fictionlike future: "Inventory will count itself. Containers will detect their contents. Pallets will report if they end up in the wrong place."

More supply chain segments will be connected in the future —not just customers, suppliers, and information systems but also parts, products, and the "smart" devices used to monitor the supply chain, respondents forecast. Improved connectivity will enable worldwide networks of supply chains to plan and make decisions together, creating a more holistic view and facilitating collaboration on a far greater scale than in the past.

Supply chain executives also envision a time when advanced analytics and modeling will help decision makers evaluate alternatives while taking complex risks and constraints into account. Intelligent systems will make some decisions automatically, bypassing human intervention to reconfigure a network when disruptions occur, for example, or perhaps arrange for additional manufacturing and distribution capacity. "Equipped with sophisticated modeling and simulation capabilities, the smarter supply chain will move past sense-and-respond to predict-andact," the report says.

Yet, respondents believe there will still be a place for them in an automated world. Chief supply chain officers will spend less time on tactical concerns and will instead become strategic thinkers, collaborators, and orchestrators, they predicted.

[Source: The Smarter Supply Chain of the Future: Global Chief Supply Chain Officer Study.]