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Are We Facing the End of Supply Chain Management?

Are We Facing the End of Supply Chain Management?

by | Jul 30, 2018 | Blog, Content Marketing, Logistics, Marketing, Supply Chain, Talent

A new article discusses the way that automation, AI and big data are transforming the industry. It raises the alarm that supply chain management will soon cease to exist, only to assert that it will still exist, just in a very different form.

This guest post comes to us from Argentus Supply Chain Recruiting, a boutique recruitment firm specializing in Supply Chain Management and Procurement.

A new article in Harvard Business Review has been generating some automation-related controversy in the Supply Chain Community, as well as lots of buzz and interesting conversation. Naturally, we at Argentus want to weigh in. Titled, “The Death of Supply Chain Management,” the article discusses the way that automation, AI and big data are transforming the industry. It raises the alarm that the function will soon cease to exist, only to – as these “X is dead“ articles often end up doing – assert that it will still exist, just in a very different form.

Beyond the obviously clickbait headline – which we couldn’t help but indulge in ourselves – the article makes some fascinating predictions about the future of supply chains. But even more relevant to us at Argentus, it has some interesting forecasts about the future of supply chain talent in particular, in the coming world where automation is king.

Automation is one of the hotter topics in the supply chain community – as it is across the entire economy. As a major feature in McKinsey discusses, automation has already made a number of jobs in the field way less relevant, threatening to eliminate those jobs entirely. Many companies have already automated their front-line transactional purchasing activities. Automation has eliminated a number of blue-collar supply chain jobs in warehouses and distribution centres, and driverless trucks stand to transform the logistics field, eliminating the need for millions of truck drivers.

But many are alarmed that automation will replace white-collar workers as well. The HBR article talks about how more companies are automating functions like demand forecasting, which has long been seen as more of an “art” than an exact science. No longer.

In the authors’ words, “within 5-10 years, the supply chain function may be obsolete, replaced by a smoothly running, self-regulating utility that optimally manages end-to-end workflows and requires very little human intervention.”

[bctt tweet=”Automation through digital technology isn’t really just about lowering labour costs, it’s about creating huge opportunities for companies to dive deep into data and create end-to-end visibility into their own supply chains.” username=”Fronetics”]

Automation through digital technology isn’t really just about lowering labour costs, it’s about creating huge opportunities for companies to dive deep into data and create end-to-end visibility into their own supply chains. This kind of visibility opens up huge opportunities, not only by lowering risk but also by letting companies become more strategic.

The HBR article outlines an interesting development: more retail and manufacturing companies are adopting “digital control towers” for their supply chains. These companies have physical rooms staffed with dozens of data analysts working in real-time to identify and squash challenges.

Picture an airport control tower, but for supply chain management: staffed 24/7, full of large screens full of 3d graphical representations of potential bottlenecks and inventory shortfalls all the way from order to delivery. These control towers are full of systems that can automatically correct for various issues, and they’re increasingly considered to be core aspects of company operations.

The authors outline how mining company Rio Tinto is using robotic train operators, cameras, lasers, and tracking sensors to monitor and fully automate its supply chain from train to port.

But do these developments hearld the end of the need for skilled Supply Chain professionals? Of course not.

A highly-automated “digital control tower” needs responsive individuals with deep understanding of how to solve Supply Chain challenges. An automated mining supply chain deep in the jungle, monitored in another country still needs people to monitor it and respond to issues.

Maybe unsurprisingly, the HBR article ends up saying that Supply Chain people will always be in demand, but that skill needs are changing, and we agree. People need to re-skill, up-skill, and educational institutions need to make sure that they’re training people with skills for the future and not the past. In the short term, executives who can manage people doing repetitive tasks (like transactional purchasing) need to learn how to manage information flows for more highly-specialized workers. Further down the ladder, the highest-demand analysts will be those who can draw insights from an ever-expanding pool of data and communicate them to senior leadership. Companies will need specialists with deep understanding of both technology and operations to design and implement automated supply chains – even more than they already do.

But beyond the trends that the HBR article outlines, we think they’re missing a key element: even if automation progresses to affect white-collar workers, even if data automates functions like supply planning, logistics, and sourcing, the human element will always matter. Companies will always need people who can build relationships with vendors when conducting large-scale Procurement. They’ll always need people who can negotiate contracts and rates, people who have the emotional intelligence to understand the psychology of the person sitting on the other end of the table, and arrive at a deal that drives value.

Machines will get better at the tactics, but the strategy will always be human, at least until the robots take over the world completely. (Which we don’t think will happen, by the way).

In the 19th century, luddites protested the adoption of machines in the British textile industry, fearing that they’d be out of a job. And they were. But while opportunities for weaving by hand disappeared, employment didn’t: the industrial revolution pushed new skillsets to the fore, creating a demand for people to manage production – leading to today’s supply chain function, by the way – while raising overall wealth and standard of living in the process.

While the rise of AI, big data and workplace automation has some important differences, we think it’s a worthwhile analogy: as with then, these new technologies will shift the employment landscape and put the squeeze on individuals with transactional or blue-collar skillsets. But supply chain professionals who can up-skill themselves, and become masters of the interpersonal skills that will never go away, will have more opportunities than ever before.

Take it from a company that’s on the front-lines of hiring in Supply Chain: while automation eliminates jobs at the lower-skilled end of the spectrum, demand for high-skilled candidates is higher than ever before, and only rising. So is Supply Chain Management on death’s door?

Not so fast.

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Video: Social Media Trends for 2018

Video: Social Media Trends for 2018

by | Jan 24, 2018 | Blog, Content Marketing, Current Events, Logistics, Marketing, Social Media, Strategy, Supply Chain

Companies in the supply chain and logistics industries should take note of these top social media trends in 2018.

While we don’t know what 2018 has in store for companies in the supply chain and logistics industries, we do know change is coming. That is true not only in terms of the economy and your business, but also for the marketing tools you use. Of course, ever-evolving social media platforms are an important part of that.

We already know that Facebook News Feed will be making some big changes this year. What other platforms or types of media will be hot? What will your industry peers and competitors be trying in 2018? As we dive into the new year, it’s important to be aware of the social media trends that will dominate the next 12 months so you can incorporate them where you are able.

As always, good content will be as important as ever. With over one million new-data-producing social media users each day, high-quality content is the only way to stand out from the masses. But we also think you should pay attention to a few social media trends that we have highlighted in the following video. We’re certainly planning to adjust our strategy and those of our clients to consider these things.

As you start to strategize for 2018, and beyond, be sure to consider these social media trends in your content marketing plans.

Top social media trends for 2018

Make sure to follow our blog for our monthly social media news posts to stay updated on the latest platform updates. And feel free to reach out to us with questions or if you would like to see a certain social media trend covered on our blog.

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Will “Autonomous Stores” Drive the Future of Retail?

Will “Autonomous Stores” Drive the Future of Retail?

by | Aug 30, 2017 | Blog, Current Events, Strategy, Supply Chain

How will self-driving, autonomous stores impact the retail industry and the supply chain?

This guest post comes to us from Argentus Supply Chain Recruiting, a boutique recruitment firm specializing in Supply Chain Management and Procurement.

Here’s another dispatch from the far-flung realms of emerging technology that will transform the Supply Chain – how products are brought to market, and how customers acquire those products.

We’ve written before about the upheaval Amazon has wrought on the Retail industry – whether it’s the company’s move into brick and mortar retail, its acquisition of Whole Foods Market seeking to improve its Last Mile Delivery, or its proposed use of drones to deliver products. We’ve also written about some emerging technologies – like augmented reality – that are blending the world of eCommerce shopping and a more traditional brick and mortar experience.

Suffice it to say, the retail industry is going through some major convulsions. With dozens of major U.S. retailers shutting down, and tons of new startups entering the eCommerce market, the landscape looks different than it did even five years ago. Companies are looking to the bleeding edge of technology to revolutionize the last leg of the Supply Chain, imagining the best ways to deliver products to consumers in 2020, 2030, and beyond.

Now, an idea that’s been explored in theory is seeing testing in Shanghai, a city known for its leadership in the mobile payments space, as well as its Blade Runner-style futurism.

Self-driving, autonomous stores

Analysts have touted autonomous drones and self-driving trucks as disruptive technologies to Logistics and Retail. Now, a great recent article in Fast Company profiles a startup called Moby which is testing a model of autonomous stores that drive around, seeking customers based on traffic data. Customers can “order” a store to drive to them, similar to how we order Ubers today. They then enter the store using an app and pay for goods with mobile payments. When the store is out of products, it drives back to the warehouse, or connects with another store that has excess supplies of, say, milk, to restock. Like a food truck, but one that also sells toothpaste, and replacement phone chargers, and apparel – using only robots.

Check out the video:

Pretty cool, no?

Produced in partnership between Swedish-based startup Wheelys and China’s Hefei University, the Moby Stores are electric, solar powered, and allow customers to order products for their next visit based on voice activation. Wheelys’ background is in making mobile coffee carts for entrepreneurs, and it’s extending that manufacturing experience towards these new prototypes, hoping (perhaps optimistically) to eventually build the stores for $30,000. It’s planning to start commercial production of the stores by 2018.

It’s a wild idea, to be sure – with significant manufacturing and regulatory hurdles still to clear – but pie-in-the-sky technologies have transformed retail before.

There are a few cool implications for this model from a Supply Chain angle, beyond the obvious convenience of having a store that comes to consumers:

  • It potentially changes the approach to last mile logistics, possibly eliminating the human component in delivery – similar to drones, but with product selection.
  • These stores combine the convenience of eCommerce with the tactile experience that’s still brick and mortar’s strength in areas like apparel.
  • They will allow retailers to compete in the brick and mortar space without paying for rent / real estate, which is a huge barrier to entry and carrying cost making brick and mortar uncompetitive. Of course there are maintenance costs to consider, as well.
  • By allowing customers to “order” a mobile store to a nearby location similar to how one would order an Uber, this model can allow a very fast form of same-day delivery, something that’s been a “holy grail” for companies like Amazon.

We know that startups don’t always translate into industry-redefining enterprises, but even if Moby itself isn’t the future of Retail, it’s very possible that wandering stores will be a big part of the autonomous era.

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