How the Autonomous Supply Chain Will Disrupt All of Us

By December 1, 2016Uncategorized

Some notes from the ‘Imagine2030’ conference of supply chain insights

Jeremiah Owyang of Crowd Companies was 1 of the keynotes on the #imagine2030 conference of supply chain insights. CC is a Silicon Valley startup bringing change in large companies. It centers on the “collaborative economy” (AirBnB), “crowd business models” (Uber) and “autonomous world” (autonomous driving & robotics) disruptions.

Much of Jeremiah’s keynote at the Imagine2030 conference was centered on the example of how the car industry is currently disrupted and massively moving towards a fully autonomous fleet of cars. The figure below shows data from Morgan Stanley which promises we will have full autonomous capabilities by 2020 and 100% penetration by 2040.

 

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Jeremiah continued that the disruption is not just technologically, it is also in the business model. For example, instead of owning a car, we may just pay per use. Not only the automotive industry is disrupted, the impact goes much broader. What will be the new insurance model? What if all of these cars will be electric? What’s the impact on public transport? How does it affect mobility of elderly or disabled people? How will that transform healthcare? We all know it will have a major impact on logistics.

The conference continued with Lora sharing her vision on how these technological trends will impact the supply chain. She expects the ‘Autonomous Supply Chain’ of 2030 to be

  • outside-in
  • learning
  • socially responsible
  • orchestrating the network of networks
  • and providing an engine of growth

Outside-in, as opposed to inside-out, means your supply chain is able to pick up demand signals and translate those throughout your supply chain up to your suppliers’ supplier, and likewise, pick up supply signals, like price changes or shortages of key raw materials, and translate that into demand shaping actions, like marketing alternatives. In the outside-in supply chain, the outside world is shaping our actions, not internal assets or politics.

As we reach further into the extended supply chain, we will be more aware we have to manage a ‘network of networks’ instead of an actual ‘chain’. Segmentation will be key in defining which parts of the network to further integrate, and which parts to treat with a shorter term focus.

Managing these networks of networks in an outside-in way, will require ‘learning’ in an ‘artificial way’. The increased complexity contains an opportunity for but it will also require the use of advanced analytics.

As capabilities increase, we will behave more socially responsible. Let’s try to reveal the hidden societal costs and include them into the financial equations we use to run our enterprises. If we manage to do so, I do agree we will become socially more responsible.

Last but not least, these autonomous supply chains will provide an engine of growth. It will create new jobs, with a higher skill set. Supply chain is becoming the new IT, absorbing generations of engineers and data scientists, to fulfill the dream of the autonomous supply chains by 2030.

In the many excellent roundtable discussions that followed the keynotes, some of the discussions centered on the following question. We all believe the technological progress is there, but how will we manage it? Are we mentally ready to adopt it?

Bigger organizations are notoriously bad at dealing with disruptive change. The car industry seems to be take aside by a company like Tesla. A company like Microsoft was taken by surprise by companies like Google. But how do we manage the change? Where big companies have the means to innovate but seem to lack the capability, small companies may have the capability but may lack the means?

The question was not answered in full, but some elements can be found in the ‘Supply Chains to Admire’ that Lora presented at the end of day 1. The Supply Chains to Admire all invest in building supply chain centers of excellence. Investing in people and in knowledge is key to make the digital pivot. Target the energy and entrepreneurial spirit of the digital natives, to carefully supply chain challenges. Be ready for disruption. Only this state-of-mind allows you to imagine when, where, and how to make the digital pivot.

For 2 years I’ve been a big fan of Lora’s work. She knows how to envision the future. Her ‘open content’ research model is an example of the ‘socially responsible’ she envisions for the supply chain of the future. Her supply chain network cross all type of boundaries: sectors, company size, language, gender, … The Supply Chain Insights ‘Imagine 2030’ conference brought all of that together. Warmly recommended and hope meeting you there next year!

Bram Desmet

About Bram Desmet

Dr Bram Desmet is Adjunct Professor in Operations & Supply Chain Management at Vlerick Business School. He holds a Master’s degree in Mathematics (Ghent University, 1998), an Executive MBA (Vlerick, 2004) and a PhD in Industrial Engineering and Operations Research (Ghent University, 2009). From 1998 till 2003 Bram worked as an IT Systems Manager with Arcelor-Mittal in Ghent. He is working as a management consultant for MÖBIUS and Solventure since 2003. As a consultant he supports global industrial and retail companies in transforming their supply chains and operations.

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