As one who’s been in this industry for several decades, it is interesting to look at the past, present, and, in a limited way, future of supply chain management. And what a ride it’s been. As evidence of how the field has changed over the past 30-plus years, consider that one of its leading professional organizations changed its name not once but twice in that time to reflect members’ shifting responsibilities—progressing from the National Council of Physical Distribution Management (NCPDM) to the Council of Logistics Management (CLM) and finally to the Council of Supply Chain Management Professionals (CSCMP) in 2005.
In many companies, the road to change was rocky. “Supply chain” meant different things to different people, and the organizational structures reflected that. For many managers, titles changed but responsibilities did not. For others, it was exactly the opposite. Finally, in 2003, CLM (now CSCMP) developed a definition of supply chain management that was intended to clear up the confusion. It reads as follows:
Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies.
The definition emphasizes coordination and collaboration, which have become critical to supply chain management. You will notice, however, that there is no mention of technology, which, in my opinion, has become the driving force behind today’s supply chains.
Very quickly, we have moved beyond the basics of transportation, warehousing, inventory management, and purchasing to a much more sophisticated playing field that’s powered by technology. And in today’s world, technology no longer just means warehouse management, transportation management, and order processing systems; it has also come to include what are known as “disruptive technologies.”
What are the major disruptive technologies in the supply chain? In a Jan. 27 conference call conducted by Stifel Capital Markets, Steve Sashihara, CEO of Princeton Consultants, identified five technologies that are affecting transportation and logistics. They are as follows:
- Drones. Already being used in several industries, unmanned aircraft have a future in supply chain deliveries if issues with weight capacity and energy consumption can be resolved.
- Self-driving/autonomous trucks. In light of the long-standing truck driver shortage, self-driving vehicles could have a very bright future.
- “Uber for freight.” This is not a new idea, but today’s technology makes online freight scheduling a more economical and efficient process.
- The Internet of Things. Thanks to sensors and other smart devices, forklifts, packages, tractors, trailers, and robots can now communicate with each other, making human intervention less necessary.
- Big data. The past few years have seen an explosion in the amount (and types) of data that are available to supply chain managers. The issue is not the volume of information, however, but what you do with it.
There are others Sashihara did not mention. For example, 3-D printing, artificial intelligence, blockchain, and robotics in general certainly qualify as disruptive technologies. And I think we can safely say there are more to come.
What does all this mean for industry professionals? For one thing, it means that tomorrow’s supply chain managers will need to be well versed in all the various supply chain functions as well as the underlying technology. It also means that today’s managers will need to start devoting much more time to education than they’ve been used to. In the modern supply chain environment, self-development should be a top priority.
About the Author
Clifford F. Lynch is principal of C.F. Lynch & Associates, a provider of logistics management advisory services, and author of Logistics Outsourcing – A Management Guide and co-author of The Role of Transportation in the Supply Chain. He can be reached at firstname.lastname@example.org.