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Top 6 2020 supply chain trends

Supply chain technology is growing more complex and so are partnerships. Here are the most important trends leaders must understand in 2020 and beyond.

As business models radically morph to meet market demands, supply chain technology needs to change as well. That means 2020 supply chain trends are a time of tumult.

"All technologies are now up for review, as are all business verticals, because supply chains have broken their traditional molds," said Andrew Stevens, senior research director at Gartner. "For example, a food and beverage supply chain is no longer just a retail supply chain; it includes agritech for sourcing, transportation tech for distribution, and so on."

Even so, some technologies and strategies are unmistakably rising to the top of the list. Here are a few of the most notable 2020 supply chain trends.

1. Companies get more selective about data

Instead of trying to "boil the ocean," companies are culling data points that are relevant to a specific business query.

"One of the biggest trends in supply chain next year and beyond is 'data that matters,'" said Steve Pillsbury, principal at PwC.

One example is change data, which is any data depicting a deviation from standard routine machine data. By gathering and analyzing only the change data, leaders need fewer analytics resources and can get insight more quickly since less data needs to be transferred and analyzed.

"Companies are still overwhelmed with the data they have," Pillsbury said. "They have to figure out what data matters to which problem in order to find a solution."

But determining which data matters is complex, and leaders can overlook important factors. For one thing, finding important data that's currently missing can be as vital as distilling existing data. Another issue is myopic data, meaning too narrowly focused data, which can lead to completely or partially wrong outputs.

2. AI in the supply chain grows

More automation via AI is hot among supply chain trends for 2020.

The ongoing need to discover the internal and external "data that matters," alongside the increasing need to automate actions from algorithm outputs, should accelerate AI and advanced analytics adoption rates, said Abe Eshkenazi, CEO at the nonprofit Association for Supply Chain Management.  

"We will witness a great shift to automated decision-making that leverages predictive and prescriptive analytics, including AI," Eshkenazi said.

3. Data use cases expand

Companies will also be able to use data beyond traditional applications and in expanded ways. 

"Procurement data use cases will go beyond their typical reach," said Rubiés Enríquez, procurement excellence director at Cimpress, a mass customization manufacturer based in Dudalk, Ireland.

"One such expanded use case for procurement data will be for carbon footprint calculations and in return carbon emissions will become a new decision criteria for procurement," he said.

This broadening scope of data use cases in the supply chain is already beginning to change business processes by encouraging companies to go green.

4. Supply chain collaboration becomes more critical

An emerging supply chain trend for 2020 is an economical reimagining of the supply chain and the need to build highly collaborative ecosystems. However, establishing that degree of trust among supply chain stakeholders is no small task. Customer demands add even more complexity.

Buyer demands for supply chain transparency versus supply chain partner desire for data and IP protections is creating friction that is slowing down progress, Pillsbury said. 

"There is wariness among supply chain members as they continue to struggle with trust issues and withhold key data," Pillsbury said. "The fear is over who gets to monetize the data: the supplier, the manufacturer or the customer."

Take, for example, changes in the container shipping industry twisted by sustainability demands and the resulting need for data sharing between uneasy partners.

"Consolidation and alliances in the shipping lines will require an intense amount of data consolidation and sharing in order to merge operations and support the interoperability of these networks," said Mike Wychocki, CEO of EagleRail Container Logistics, a producer of automated shipping container lifting and shuttling equipment, based in Chicago. "There will be fewer, more cooperative and more technically advanced partners in the container shipping and intermodal going forward, and their mutual success will revolve around the capture, analysis and sharing of key data points," Wychocki said.

5. Pressure for interoperability grows

These are all hefty issues when taken individually and even more so when collectively presented. The technologies needed to address supply chain trends of 2020 and beyond will need to work together rather than as standalones.

The top technologies for supply chain in 2019 were AI, advanced analytics, IoT, robotic process automation, autonomous things, digital supply chain twin, immersive experience and blockchain, according to a Gartner report on 2019 supply chain trends.

"Those technologies will continue to trend next year and beyond," said Stevens.

"But by 2023, at least 50% of those technologies will not be used in isolated standalones, but as supplements to legacy or existing solutions," Stevens said. "The ability to work together in a complementary manner will be essential."

The takeaway: If a technology doesn't play well with other technologies, leaders will be unlikely to purchase it or they'll phase it out if it's already in use.

6. Supply chains will include more tech

A few new technologies will be added to the supply chain arsenal mix this year, according to the same Gartner report.

"Edge computing, 5G, and convergence between IT and OT [operational tech] will be on the rise,"  Stevens said. "Dark warehouse, 3D printing, next-generation RFID, near-field communication and extended level integration technologies will also be added to the list of 2020 supply chain trends."

Although many of these technologies and their use cases are not yet mature, supply chains are changing, Stevens said.

"For example, companies are becoming more responsive to using blockchain to manage every aspect of a product's lifecycle," he said.

What is certain? Supply chain trends for 2020 will include profound change.

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