As interesting as was 2016, we can expect an equally fascinating year in 2017.
For the past five years, I have enjoyed commenting for the Annual Review and Outlook about the state of global supply chains and what to expect. For 2017, it is more difficult to predict than ever to predict the future of supply chains.
Obviously, the world economies and trade are changing. The supply bases and manufacturing and assembly locations will diversify more than ever, and the customers will expect increasingly rapid, efficient, and “perfect order” deliveries. Online ordering will continue to grow faster than any other sales channel.
For this year, let’s focus on digital. More than the current “buzz-word,” this is equivalent in some ways to the Industrial Revolution. The digital era is upon us, and we better get busy preparing for it, and joining those who properly see it as a revolution, a disruption, and a complete game-changer.
We see three important changes that digital will cause in 2017:
- First, the total shopping and buying experience — whether B2C or B2B — is expected to increase to $4 trillion by 2020. This has substantial impact on supply chains and logistics. While moving “from physical to digital” is incremental, disruptions and transformations are inevitable, and will impact every business that buys, makes, moves, or sells a product.
- Second, the transformation to digital supply chains will intensify. True “customer-centricity” will be the driver, along with platform models that provide a foundation for several participants. Thus, true end-to-end supply chains, which depend on trading partners all synched to real-time sales or other information, will become a reality, beginning in 2017. Speed, accuracy, cost, and new management practices will be enhanced, as business processes are reinvented for digitalization. The opportunities for digital supply chains are substantial and are still being discovered.
- Third, the business impact of these first two, as they evolve, are open-ended. Digital components such as the Internet of Things (IoT), artificial intelligence, data reservoirs, advanced analytics, robotics, 3D printing, and mobile — just to name a few — have the potential to change everything about how supply chains work.
Managing operations in the digital supply chain era will be challenging. Conflicts, confusion, and consternation will be prevalent, as people try to adapt to the digital world.
So, in summary, prepare for the digital revolution. Start now, and decide your vision and roadmap. Falling behind is not an option, as disruption and differentiation are coming at us faster than ever before.