The Supply Chain Matters blog continues  a series of blogs that provide added detail and perspective for each of our ten 2020 Predictions for Industry and Global Supply Chains which we unveiled on December 17.

In our Part One posting in this predictions series, we explored for our readers 2020 Prediction One, what industry and global supply chain teams should anticipate in terms of global and regional economic outlooks.

In Part Two of this predictions series, we explored the detail of 2020 Prediction Two, what we expect to occur in global supply management challenges and trends.

In Part Three of this series we detailed what to expect in the area of supply chain talent management, retention aThe Ferrari Consulting and Research Groupnd skills development.

Part Four in this prediction series highlighted what to expect in the area of supply chain management related cybersecurity and information security threats in the coming year.

Part Five of this series , highlighted what we predict will occur regarding supply chain digital transformation efforts in the coming year.

In this Part Six posting, we highlight what we anticipate business teams will likely and should prioritize in the leveraging of supply chain management focused advanced technologies in the coming year.

 

 

Background and Introduction

On an annual basis, and since our inception in 2008, The Ferrari Consulting and Research Group and our associated Supply Chain Matters blog publishes a series of supply chain management focused annual predictions which are both described, monitored and scored for actual occurrence at the conclusion of the year.

Such predictions are provided to clients, technology providers and blog readers in the spirit of advising senior and line-of-business executives, multi-industry cross-functional supply chain management and supporting information technology teams a sensing of what to expect in the coming year, Our goal is to depict how likely global, regional, economic, business and industry trends will impact and likely influence required supply chain management actions in the coming year.

The context of these predictions include a broad cross-functional umbrella of what is today considered supply chain management, and includes areas of leadership and strategy, product management, strategic sourcing and procurement, supply chain planning and customer fulfillment, manufacturing, logistics, transportation and customer service management.

Now to our specific prediction:

 

2020 Prediction Six: Advanced Technology Buying and Ongoing Adoption Strategies will Turn More Conservative, Laser-Focused and Driven By Business Priorities.

 

Prediction Summary

As has occurred in the prior two years, various industry and global supply chain management teams will remain confronted with needs to adopt more advanced technology to support ever more complex physical and digital based process needs. Investment priorities will continue to be based on individual line-of-business or other functional priorities which we predict will turn more conservative and likely laser-focused in the year 2020.

As noted in Prediction One, and again in Prediction Five, indications of a very cautious and highly uncertain global economic outlook will test the agility and resiliency of multi-industry customer demand and supply networks. With all of this uncertainty and looming concerns on the part of senior business and financial executives, there will likely be a tendency to hold-off on major investment or change initiatives pending some signs of stability in overall geo-political and trade environments.

Thus, in the year 2020, our prediction is that the emphasis of advanced technology investments and ongoing business process transformation initiatives will lean toward addressing near-term compelling business priorities and more Cloud focused applications and corresponding IT infrastructure. As previously outlined in Part Five of this series, supply chain digital transformation initiatives will similarly lean toward nearer-term interim objectives while preserving a common longer-term vision.

Business CIO’s will be under added pressure to reduce even more overall IT maintenance costs, but at the same time, have a similar direct focus on near-term compelling business priorities vs. longer-term, larger-scope in-house internal development or deemed expensive systems transformation initiatives. Technologies that are perceived as still maturing or requiring added development timelines will likely not make the prioritization criteria without compelling evidence. However, technologies that can enhance current available data, or democratize data needs across multiple business process areas are likely to be more favored. A likely continued attractive strategy will be one of deployment of mini applications built on existing available data, directed at solving a critical business process need.

Our belief is that the notions of near-term will equate to opportunities for improving productivity and efficiency of processes and work teams, accelerating the speed of overall decision-making as well as identifiable and obvious cost savings opportunities. Continuing needs to support key customer requirements, adhere to regulatory compliance or other deemed business critical needs will remain in the forefront, as will solving problems that have a measurable value to desired business outcomes.

Likely areas of such priorities will be:

  • Opportunities related to added business process automation, productivity of assets and people or transfer of process responsibilities to key suppliers.
  • Near-term new business revenue generation opportunities such as digital enabled business models, automated equipment services and maintenance, or other subscription-based services.
  • Efforts directed at better informed and more agile decision-making including more prescriptive, predictive or scenario-based decision-making capabilities applied to either sales and operations, supply and customer demand network operations planning. In this same context are efforts that are described as either democratization or concurrency of planning and decision-making across broader business and functional teams.
  • Product-level track and trace processes needed to satisfy either business, regulatory or industry mandates or prioritization needs.
  • Cloud-based technology investments that address both applications and avoidance of existing or added IT infrastructure, facilitating more ongoing expense or cash savings.

 

In complex or highly regulated manufacturing firms, internal or external factory to factory connectivity with an emphasis toward the ability to more quickly identify process, capacity or inventory bottlenecks will likely emerge as a near-term opportunity. Richard Lebovitz, CEO at technology provider LeanDNA Inc., and prior founder and CEO of Factory Logic (now acquired by SAP), described this need as follows:

Globalization across the supply chain, particularly in factories and suppliers, has grown steadily over the years. The new trend we’ll see coming out of that will be the push to enable factory-to-factory connectivity, whether in the main factory, supplier, or even a sister site consuming similar components. What was once a black box is being opened and scrutinized. How will sites in the Czech Republic manage sites in the U.S.? How can we quickly identify critical shortages that could be quickly fulfilled with material available at another site? What is the supplier commit date for critical shortage to fulfill an order due next week? Allowing factories to connect and talk about prioritized issues will rear as a main objective in 2020.

A final area of impact related to advanced technology adoption prioritization in the coming year specifically relates to the small and medium business segment where many B2B supply and customer demand partners reside. Many of such businesses were already at a disadvantage in technology due to restricted resources and technology investment resources. With the year 2020 likely to provide more supply chain complexity and uncertainties, not investing in the noted priorities could run the risk of being left behind.

For the overall advanced technology provider and implementation services communities, the key competency in 2020 will be the ability to succinctly message and demonstrate a specific technology’s business outcome value to collective C-Suite, Line-of-Business, as well as cross-functional business communities. The positioning of broader Cloud-based technology and applications technology suites will serve as assuring longer-term technology deployment consistency, but at the same time, the ability to deploy at the cadence required by existing business conditions.

Within our detailed predictions research advisory to be published later this month, we will provide added predictions related to specific advanced technologies. As an example, we anticipate that Artificial Intelligence (AI) and Machine Learning (ML) enabled applications and IT infrastructure to be more prevalent in the coming year. We will further address our view of the attraction of related technologies such as Internet of Things (IoT), Blockchain, and B2B Supply Chain Networks platforms in the coming year.

 

We once again encourage clients and readers to take the time to review what to anticipate in the coming year and how your organization can be best prepared.

As we continue our highlighting of each of our predictions in added detail, please continue to provide your individual feedback along with what specific area that most concerns you in the coming year.

 

Bob Ferrari

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