In episode 56 of the CXO Minute, Tony Uphoff explains how supply chain strategies have evolved over the years, and how we are on the precipice of a new era of innovation in this area thanks to technologies such as Internet of Things (IoT), blockchain, artificial intelligence (AI)/machine learning, robotic process automation (RPA), and 3-D printing.
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00:40 — Since the pandemic, supply chains have become cocktail party conversation, says Tony, as a reason for everything from supermarket shortages to auto repair wait times. While the supply chain became a catch-all business excuse, the reality is that the pandemic and post-pandemic marketplaces have given us a visceral understanding of just how critical and fragile supply chains are.
01:26 — The reality is that your supply chain is your business today, and supply chain innovation is rapidly becoming one of the top priorities for CEOs in every industry.
01:39 — Tony runs through some history of supply chain outsourcing, citing Jack Welch’s widely-hailed outsourcing moves when he was CEO of GE. The advantages of moving operations offshore began to dwindle in the mid-2000s, however.
02:15 — Changing macroeconomic factors, such as increases in labor and transportation costs, absorbed much of the savings that manufacturers had previously enjoyed. Additionally, after experiencing offshoring firsthand, many companies found that the initial math that drove offshoring was flawed, as hidden costs often outweighed the cost benefits of manufacturing overseas.
02:40 — Making products closer to where there is demand allows companies to cut back on logistics and transportation costs, reduce their carbon footprint, reduce risks associated with offshore outsourcing, and get products to consumers faster, which is a huge competitive advantage in today’s “instant gratification society,” says Tony
03:08 — We are at the precipice of a revolution in supply chain innovation, says Tony, with technology now helping business leaders solve their main supply chain concerns, including connectivity, visibility, automation, analytics, sustainability, financing, and procurement.
03:19 — There are five main technologies enabling supply chain innovation today: IoT (Internet of Things), blockchain, artificial intelligence/machine learning, robotic process automation, and 3D printing. IoT involves connecting sensors to finished goods, shipping containers, or warehouses, providing data and insights that can improve traditional supply chain practices. Blockchain, the underlying technology behind cryptocurrencies, has the potential to improve visibility and transparency in supply chain processes.
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03:51 — Artificial intelligence (AI), machine learning, and predictive analytics can automate warehouse operations, improve delivery times, manage inventory proactively, optimize strategic sourcing relationships, and create new customer experiences. AI-powered robotic process automation RPA can increase productivity and help close the talent gap for supply chain skills. Lastly, on-demand 3D printing reduces the need for expensive warehousing solutions, and excess inventory, and allows companies to offer new services and a better customer experience.
04:43 — Supply chain innovation has become a strategic imperative, and it’s essential for business leaders to understand these technologies, concludes Tony.
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