The supply chain industry can expect a dose of reality in 2015 on some important fronts.
Anticipate a big cyber-security breach that will give control over a supply chain to an adversary or at least expose that susceptibility. This will spotlight the genuine vulnerability that currently exists but that is not recognized by most companies. Industry is not ready for such a supply chain intrusion, but will start to deal with the reality of the threat in 2015 … but only after the big breach.
Expect continued emphasis on supply chain innovation (SCI) in 2015 as companies strive to stay ahead of the competition in fast-changing markets. The good news is that more companies will come to realize that most SCIs are not “Eureka” successes that instantly transform the business model and will be more deliberate in their SCI initiatives. In reality, the majority of SCIs are sustaining (incremental cost and cycle time reductions) rather than disruptive (redefining the economics and value proposition). This type of SCI helps companies to better use their resources and focus on innovations that will gradually improve their competitive position, rather than be dazzled by the Next Big Thing.
A good example is the hype surrounding 3D printing and the use of drones as delivery vehicles, two developments that have captured the imagination of many industry pundits. The likelihood is that regulations will constrain drone usage to simple and line-of-sight applications. In the case of 3-D printing, a number of companies have adopted the technology to make specialized components (UPS’s expansion of 3D printing in their stores bodes well for specialized usage), indicating more realistic expectations for 3D printing.
So, in 2015, expect more reality to drive supply chain innovation and improved performance — but not without some pain along the way.
James B. Rice Jr., Deputy Director, MIT Center for Transportation & Logistics