Future of Supply Chain – A Turnpike

I just read a JDA Software Group report that had a few interesting highlights that support some of the assumptions we are building on:

I believe that the Supply Chain of the past is being replaced by something of a Supply Graph – not linear. JDA says, “Supply chain structure in the past has been viewed as a fairly “left-to-right” linear set of assets with relatively static inter-relationships. Today’s supply chains are more characterized as a set of assets that “surround the customer” and dynamically assemble to process and fulfill orders.” I think we are saying the same thing. The ‘chain’ will become more of a turnpike – where many parties enter, exit, and interact with each other at various locations.

New models are balancing profitability and growth. JDA says, “Retailers are on a collision course with zero profitability as their eCommerce sales grow.” That has to change, and it can with the right tools. 

Convergence of B2B and B2C makes ‘new retail’ as different from traditional retail as the phone on the wall in your kitchen is comparable to your iPhone. I’m not sure it should be called a ‘phone,’ and I’m not sure it will be called ‘retail.’ Convergence is leading to what JDA calls “the seamless supply chain.” Makes sense. 

Back to the Supply Network (i.e. turnpike) concept I mentioned, everyone needs access to useful information and insights. JDA says, “the various end-to-end assets will no longer be characterized by linear, fixed interrelationships, but will “self-form” relationships based on a specific customer need at a specific point in time.” Again, that’s a big graph (turnpike); not really a ‘chain.’

I believe that no supply chain platform can have a chance of relevance without completely integrated business analytics that are relevant and easy to use (i.e. smart & pretty). JDA says, “Data science will be a core competency of the third wave of modern supply chain management, requiring all enterprises to become “math houses.” It seems more obvious every day that machine learning and AI will be vital to continuous structural improvement.

JDA also mentioned the concept of “the two-speed architecture,” which respects the past while allowing for a seamless branch to the future. I think most business leaders are seeing that issue every day as well. We all want to disrupt, but we also absolutely balance it with innovation within the framework of critical enterprise systems that need stability. 

And, probably the most exciting part for anyone in this business is summed up by the concept they mentioned: “Amazon did not happen to bookstores; the future happened to bookstores.” The future is happening in supply chain - really fast.  

Dan is the President and CEO of CaseStack, a Board Member of The Center for Retailing Excellence, and the author of Collaborate: The Art of We.