When it comes to new supply chain technology, development usually proceeds incrementally. But progress continues to be made on many fronts. Here is a look and some critical new technologies, and how the ARC Advisory Group assesses their maturity.
3D Printing of Spare Parts
The opportunity to use 3D printing – more accurately labeled “additive manufacturing” – to print spare parts is widely recognized. In ARC’s conversations with industry insiders, we have come across many companies that have beta projects and are printing a small number of parts, but no company that is doing this at scale. There are a number of challenges associated with scaling additive manufacturing in the supply chain. However, the challenges are not insurmountable. New cloud-based solutions are very promising.
Artificial Intelligence and Machine Learning in Supply Chain Applications
Artificial intelligence (AI) is hot. Crunchbase reported that over the last year over $4 billion in venture capital has been invested in AI firms just in the US. Investments in AI and machine learning are key drivers in the ‘arms-race’ between software vendors to achieve differentiation in this space. These technologies are poised to make implementation easier, forecasting better, risk management more proactive, and also ease usability. But in most cases, these new capabilities have not yet been baked into the standard products.
Autonomous Mobile Robots for the Warehouse
When Amazon purchased Kiva Systems in 2012, interest in autonomous mobile robots (AMRs) for the warehouse soared. Even though these solutions are not yet widely deployed (except at Amazon), they cannot be considered an immature or emerging technology. Amazon has proven they can be used at scale with a solid ROI. And Locus Robotics is proving they are a solid alternative to a looming warehouse labor shortage. But a revolution in robotic automation may be emerging. The combination of mobile robots and picking arms is potentially revolutionary. Rochester Drug Coop has implemented a solution from IAM Robotics with future phases already planned. The Founder of Locus Robotics and the CEO of IAM Robotics will be speaking on this topic at ARC Advisory Group’s Annual Industry Forum in Orlando in February.
We’ve been on the journey toward autonomous vehicles longer than many realize. Yet, despite the billions of dollars invested in multiple autonomous vehicle technologies, the road to fully autonomous vehicles operating in an urban environment involves surmounting almost un-imaginable technological hurdles. Additionally, legal, infrastructure, and economic hurdles still need to be overcome. One sign that the hurdles are high is that Warren Buffet made a multibillion dollar investment premised, in part, on his belief that this technology is being overhyped. In the short term, truck platooning might provide some fuel savings, but relatively few truckers or shippers are likely to be able to take advantage of these developments.
SNEW data – social media, news, event, and weather data – has great potential to improve supply chain capabilities in three ways: improved forecasting, risk detection and response, and dynamic optimization. The solution is already proven in terms of enabling enhanced supply chain resiliency capabilities. In the other areas leading supply chain software suppliers, like JDA, have interesting product development in this area.
The Uberization of Freight
Some big name investors have invested in startups that use Uber-type technology to disrupt the freight industry the same way Uber disrupted the taxi industry. Even Uber and Amazon have entered the fray. There are real reasons to doubt whether investments seeking to transform this industry will pay off. Uber style functionality will most affect a relatively small portion of the trucking industry, the spot market. Larger shippers sign long term contracts with select carriers after going through detailed procurement engagements. They tend to work with carriers that are large and can be reliably counted on to be available when loads need to ship. The Uber style solutions make the most sense for shippers that have a shipment going to an unusual location. The carriers that will be most likely to find value from an Uber style application will be owner operators and very small carriers. Still, Uber-style apps that operate on truckers’ smart phones are poised to provide much, much better logistics visibility. And that is a real benefit. Descartes’ acquisition of Macropoint will allow these Uber visibility apps to be sold by a mature and established company.