The Triumph of the Supply Chain: Earlier posts in this short series have addressed why I consider the immediate future prospects of the supply chain industry to be, not dark, but tremendously inspiring. Despite the daunting blitzkrieg of a coronavirus pandemic, enforced nation- and industry-wide lockdowns, rocketing hyperinflation, and weaponized trade sanctions, global supply chains have survived.
What is this if not testimony to their enduring resilience?
There’s a new and universal appreciation of the importance of supply chains, and the challenges have generated a tremendous influx of new talent and creativity to provide solutions. The field is intellectually alive as never before and has literally an entire world of material and personnel resources on which to draw. It’s impossible to consider all these factors and not see in them the promise of an exceptional future for the industry.
But there is one factor I haven’t mentioned that is absolutely transformative. The same factor that has transformed and is transforming everything in our lives at every moment—technology. We are so deeply embedded in a technological culture that, like fish unaware of the sea, we barely notice any longer the smartphones, the laptops, the surveillance cameras, the GPS, the HDTVs that surround us. We regard it all as just a part of everyday life; and when we see the factories and the efficiency experts, the drones and ships and trucks and planes, the ever more sophisticated Excel spreadsheets and PowerPoint charts, we think these things will persist in roughly the same form for the rest of our lives.
And so, we miss the fact that our technology is evolving, evolving ever more quickly. We look at political events and listen to pop music and drug ourselves with entertainment and think this is where the action is. On the contrary: the reality is that a continuous series of technological revolutions is taking place within the technology that supports us, and those innovations are taking us to the brink of the borderline miraculous.
I’m only concerned with supply chain matters here, but even there the coming developments reconfiguring the field as we speak are almost too broad to sketch. But even to skim the surface should give one an exhilarating sense of the new possibilities. And for the supply chain, in my opinion, the key drivers now are these:
The impact of computerization itself goes without saying. Is it even possible to imagine business today without Microsoft Word, Excel spreadsheets, social media, Zoom conferences? Without SAP S4Hana or Oracle databases, software upgrades, information architecture, LinkedIn networks? We know that every one of these technologies is constantly being followed by newer more powerful versions that subtly and not so subtly transform the businesses using them—that iPhone 10 will be iPhone 20 one day, that Windows 10 will be Windows 30, and that therefore, beyond Six Sigma, a Seven Sigma is waiting in the wings.
But there is a new development on the horizon that will scatter that slow evolution to the winds: Quantum Computing. Using quantum physics to process data, these computers solve problems up to 100 million times faster than traditional computers. Moreover, using numbers in a fluid, non-binary state of quantum uncertainty, neither one nor zero, these computers can consider immense numbers of probable possibilities, delivering the results instantly. Already routing is benefiting from multiple optimal solutions, and security is looking both at the possibility of absolutely impregnable encryption – as well as the possibility of a computer capable of breaking all possible existing encryption. In the short term this speed and breadth will advance the way we do business. But it will also accelerate our slow evolution to the point that no longer will ‘only the strong’ survive. Survival and competitive success will go only to the most resilient and adaptable, the companies most capable of navigating the shocks of rapid change.
Anyone who has ever stood in a Japanese auto assembly line and seen lines of metallic arms swing down like silvery tentacles as they meticulously assemble one vehicle after another, know they are witnessing the future. The dream of 100% automation may never be fully reached—there will always have to be a customer at the end of the process to judge customer satisfaction—but in terms of autonomous mechanical processes, the age of the robot is upon us. If it’s not obvious, it’s only because the robots have not yet been generally designed to mimic humanoid form. Nonetheless robotic devices are already driving our trucks, flying our satellites, guiding our vehicles, adjusting the heat in our saunas. Drone delivery, automated factories, semi-autonomous mining rigs—it’s possible to envision a day when all major productive processes will be robotic in nature. Will that dispense with the need for human assessment and oversight? Perhaps not. But the transition from largely human productivity to largely robotic production will transform supply chain analysis as we know it.
Blockchain is the foundational system that makes cryptocurrency possible, and is a subject unto itself. Suffice it to say the blockchain is public digital ledger whose entries and transactions are irreversible: once they are entered, the data in any given block cannot be altered retroactively.
Aside from the fact that this feature stops certain aspects of business corruption flat—it is not possible to hide funds using ‘two sets of books’ in blockchain— the supply chain implications are many.
Blockchain, moreover, does more than merely register information; it can incorporate computer functionality that operates on that information, making possible autonomous timed self-executing smart contracts. “By associating unique identifiers to products, documents and shipments, and storing records associated with transactions that cannot be forged or altered,” blockchain can be used to spot and end counterfeited products, saving money and brand reputation for defrauded companies. Blockchain is also being used in peer-to-peer energy trading, a novel potentially critical response to the energy crises brought on by sanctions.
3D printing is a machine process that uses three-dimensional digital modeling to create a physical object by adding many thin layers of material in succession. This dry description is a very poor way of communicating the experience of watching a computer file literally create usable objects in front of your eyes. What sorts of objects? One thinks of tiny replacement parts, but the reality is that even now 3D printers are producing semi-automatic rifles, sports cars, food (chocolate!), lego architecture, prosthetic bones, rocket launchers, clothing,
How far are we from the replicators of Star Trek? Far enough. But even now 3D printing has amazing potential for the supply chain. As a supply chain consultant and business professional, I am watching 3D printing very closely. Yes, it is an innovation that is still in its infancy. But the speed with which it is advancing, and its potential impact on all levels of the supply chain, is intoxicating.
I will not dwell on the implications of Artificial Intelligence for the supply chainoverlong, for even a moment’s reflection must impress on readers the staggering power of developed AI. Machines that make have built our world, but machines that think can rebuild it with an ingenuity and rationality beyond our scope. If that is daunting and a little frightening, it should be. A world in which machines make our decisions for us could be more hell than heaven. But a world in which intelligent machines present reasoned justifications for better business and social decisions is another matter.
AI is too large a subject to treat here, but the obvious value of machine intelligence which can weigh vastly more data than a human mind can, and use it provide vastly subtle and comprehensive options and solutions than a human mind could, speaks for itself. AI will find answers and solutions to supply chain challenges that humans will miss. Possibly those solutions will be brilliant, and companies and customers will benefit. So long as those decisions are not autonomous, and humans are in a position to judge their utility and choose to implement them or not, the rising presence of AI in the supply chain industry should only be a good thing.
Suffice it to say, that rising presence, like the rising presence of all the subjects discussed here, is inevitable. And let us speak plainly: it is wonderful. What we do in the supply chain industry is absolutely necessary for human flourishing. Thanks to these new developments, we will be able to do them better, do them faster, do them more efficiently, do them more effectively. And because of this, the future of the society that supply chains serve will be better too. Much better.
The role of the supply chain analyst and consultant of the future will not be to simply repeat the successful but increasingly outmoded templates of the past, but to intelligently guide businesses in the best ways to adapt and implement the innovations of the future.
And if it seems that these glimpses into the future of the supply chain have the flavor of science fiction, let me conclude with the ‘Three Laws’ of one of the greatest science fiction writers, the scientist Arthur C. Clarke:
1. When a scientist states that something is possible, he is almost certainly right. When he states that something is impossible, he is very probably wrong.
2. The only way of discovering the limits of the possible is to venture a little way past them into the impossible.
3. Any sufficiently advanced technology is indistinguishable from magic.
Indistinguishable from magic? One day, perhaps. But for now let us cultivate a little humility. It is the task of the supply chain professional to provide competitive advantage, improved efficiency, and enhanced profit for his or her business and client. That is our job, and that is never impossible. But to do our very best at that task, we need to thoughtfully and passionately push the boundaries of the possible. Our response to recent global challenges, the rise in public awareness, the growth of material options and intellectual resources, the acceleration of technology, all give our efforts an ever-increasing likelihood of success. The improved lives and better world that will result is not only possible, it is the very meaning of what we do.