In a prior Supply Chain Matters blog posting, our research arm, The Ferrari Consulting and Research Group announced general availability of the 30-page Research Advisory- 2022 Predictions for Industry and Global Supply Chains. This report is now available for complimentary downloading at our website Research Center page. Basic registration data is required.

After producing this annual report since 2008, we tend the gauge what specific prediction areas garner the most interest among our clients and readers. One is obviously, supply chain focused technology and software. Therefore, in this posting, we are sharing with our Supply Chain Matters readers excerpts of 2022 Prediction Seven.

 

2022 Prediction Seven- Expect an Added Investment Boom in Supply Chain Focused Technology and Software, Both in Market Consumption, Equity Investment and M&A Dimensions.

Prediction Overview

During the year 2021, there was an avalanche of equity investment funding plowed into supply chain focused technology either in new start-ups, in business funding expansion, or in added M&A activity among existing technology providers. Much of this was the content of our periodic Supply Chain Matters This Week in Supply Chain Tech column updates throughout the year.

The Wall Street Journal, citing data published by PitchBook Data, Inc., indicated that logistics technology focused startups raised $24.3 billion in venture funding in the first three quarters of 2021. Much of this investment was targeted at start-ups or existing players in supply chain logistics, operations and execution processes and decision-making areas. Such efforts further increased the valuation of such firms to very lofty levels.

Investment firm Bessemer Partners has declared that: “supply chain digitization has reached a tipping point, coupled with macro tailwinds that will drive a new wave of data infrastructure, workflow automation and collaborative platforms.” We tend to concur.

The coming year will further provide increased cycles of ongoing continuous development within supply chain management focused applications from the major Cloud based applications providers including Oracle and SAP SE. We anticipate that such development activity will continue with additional monies flowing into what are perceived as key market growth categories.

Specific Predictions

Heightened Investment Cycle

Across specific business and industry segments, we anticipate an accelerated investment cycle to spur on supply chain business process digital transformation and supply network resiliency needs for specific scope supply chain operational, planning, or customer service business processes.

While that would be positive news for technology providers, accelerated timetables and expectations will lead to meaningful change management challenges and potential implementation support resource challenges that will need to be addressed and successfully managed. Thus, niche supply chain centric system integration firms, or technology providers themselves, that have acquired intimate knowledge of supply chain focused business process, software landscapes and change management processes will encounter very heightened activity during this 2022 cycle.

Suffice to again state, market demand for big-bang, broad scope transformation efforts involving multiple cross-functional business transformation remains of little interest because of the disruptive risk and overall cost factors. Instead, businesses will seek a time-phased roadmap of transformational capabilities that extend into multi-year dimensions.

Workforce Automation

An area of accelerated technology adoption is likely to be workforce automation specifically applied to manufacturing, customer fulfillment, warehouse physical processes or transactional processes. The emphasis will be on automation of mundane processes, enhancing interactions, accuracy and overall productivity of existing workers. The goal should be enhancing an employee’s interactions and skills enhancement in leveraging advanced technology vs. wholesale replacement. Rather than whole facility automation, an emphasis on modular, more agile automation that can support various volume peaks or valleys that can lead to a more flexible and multi-dimensional operational workforce requirement will be evident. This will include broader application of robots as a service or other time-based technology subscription deployment.

Artificial Intelligence and Machine Learning Technology (AI/ML)

AI/ML based knowledge acquisition and retention systems directed at preserving and automating business process intelligence and enhancing employee knowledge in specific operational or planning decision making needs will secure added interest. However, the technology should not be viewed as a panacea for solving multiple process needs. Other areas of interest will remain in supporting needs for more advanced analytics and simulation-based decision-making predicated on digital twin software simulation approaches. AI/ML focused technology providers will need to make added efforts in assisting and educating businesses in enhancing existing business multi-level data management and advanced analytics capabilities in order to best leverage AI/ML capabilities. We included in our research advisory a specific prediction indicating that the existence of multi-layered based data management and advanced analytics capabilities will be the steppingstone to more mainstreamed AI/ML process enablers.

Heightened M&A Activities

We predict a heightened cycle of M&A activity in 2022 directed a specific attractive market segments, especially those related to supply chain logistics, multi-modal supply chain informational integration and online focused order fulfillment. Among existing technology providers, we anticipate further moves to either acquire competitors, key customer segments or broadening of supply chain business process support offerings.

Supply Chain Control Tower

We expect supply chain control tower capabilities directed at enhancing horizontal and vertical end-to-end visibility in either operational logistics or advanced and concurrent planning processes will garner added adoption over the next two years. We must caution readers to the differences of investing in enhanced end-to-end visibility vs. the garnering of added depth and context of movements across product demand and supply networks. The goal will be insuring synchronization of information and physical material movements.

Supply Chain Network Design and Simulation Capabilities

We anticipate a renaissance in leveraged use of supply chain network design technology in areas of forward focused advanced analytics, simulation and scenario-driven supply chain planning and execution, beyond periodic analysis. A growing focus will be digital twin simulation in ascertaining what changes in supply network sourcing or inventory positioning will have the most beneficial impact to needed business outcomes, in supplementing supply network resiliency or mitigating climate change risks.

Added Thoughts

Since predicting technology adoption garners a whole lot of foretelling, we continually welcome reader feedback and added insights.

This year we have received from various individual technology providers, likely the most volume of annual prediction emails we have ever experienced. Once we screened out technology and marketing biases, there were some gems. Over the coming weeks will selectively share submissions that we felt were rather insightful in specific business process and technology areas.

 

Bob Ferrari

© Copyright 2022, The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.