Digital

How Supply Chains are Embracing Digital Disruption

Many companies today are beginning to embrace the ‘fourth industrial revolution’ where ‘hyper connected’ production and supply chain environments will transform companies into digital businesses. These latest disruptive technologies can be broadly split into three categories.

Firstly, new networks such as 5G mobile networks, Internet of Things related platforms, and other cloud-based network infrastructures. Secondly, new types of devices being connected to these networks, namely 3D printers, advanced robotics, drones and, of course, Internet of Things devices. Thirdly, new types of information coming off of these connected devices, data which can be archived and analyzed to obtain deeper insights into what is happening across an end to end supply chain.

Digital Transformation

To understand how new digital transformation initiatives could affect supply chain operations, OpenText recently commissioned the analyst firm IDC to conduct a survey in this area. We had a great response to the survey with cross industry and cross region insights which I will be sharing via several blogs over the next few months. I am only going to share one key statistic from the new study here, and that is from the 250 companies surveyed, 56% said they had already appointed a Chief Digital Officer. 

Digital Transformation

We asked IDC to test a specific hypothesis to see whether ‘new digital technologies would lead to new supply chain transformation initiatives’. If true, then it presents an opportunity for companies to consider outsourcing their B2B integration requirements while they focus on deploying their new digital projects. As part of the survey, we obtained the latest adoption patterns on new digital technologies, such as drones, IoT and wearable devices and we will share these and other findings from this interesting study over the coming months.

There are five disruptive technologies that are gaining more coverage in the industrial media than others at the moment, drone-based technologies, 3D printers, wearable devices, advanced robotics and the Internet of Things. Our new IDC study looked at adoption rates for these technologies and many more technologies such as machine learning, especially in relation to supply chain operations.

Digital Transformation

Why are these five technologies getting more coverage than other disruptive technologies? Well firstly all of the aforementioned technologies are being targeted at both the consumer and enterprise space, so for example you can purchase a 3D printer or robotic hoover for the home, and similar technologies are starting to be introduced to the enterprise. This is not the first time that consumer-based technologies have entered the work environment. Over recent years CIOs have had to adjust their corporate strategies to support ‘bring your own device’ based technologies brought into the enterprise by employees. So how are these five disruptive technology areas being deployed across the enterprise today?

Drone Based Technologies – This technology has been getting a lot of coverage in the press in recent years, all for the wrong reasons. The drone device market has been impacted by various lobbying groups concerned by their safety and of course privacy as they fly across city centres. Local governments have been quick to establish no fly ‘drone zones’ over cities around the world, even before the economic benefit of these devices can be properly determined. Companies such as Amazon and their Prime Air drone has got the most press coverage with their drones which can deliver small packages to consumers. This ‘last mile’ delivery of packages is an increasingly important area of development for third party logistics providers. DHL is one of the first 3PL providers to leverage this technology to deliver medicines to remote islands in the Far East where there is not enough space for traditional aircraft runways. There are initiatives underway to define air corridors for air-based drone devices, but of course drones don’t have to be limited to the air.

Starship Technologies for example has developed a small autonomous vehicle that has a payload capacity to carry two shopping bags. The intention is that this small vehicle can deliver shopping ordered by a consumer and deliver to their home address. But what if you could use the same technology to deliver small components from automotive suppliers located on a supplier park near to a major automotive OEM? Supplier parks are being established in all the major automotive hubs around the world today and these types of autonomous drone devices could help to streamline the delivery efficiency of parts to car manufacturers in support of their Just-In-Time production environments. Drone based technologies are still relatively new, however they offer some unique capabilities to support today’s production and aftermarket retail sectors. Audi for example are starting factory tests of drones to deliver parts from inventory locations to trackside for fitting to vehicles.

3D Printing Technologies – 3D printing technologies are not new and in fact much of the early research into this area actually started in the early 1990’s. Back then it was known as stereolithography or rapid prototyping, both terms being used to describe the layer by layer curing of plastic based materials to create a 3D object. Today, the technology is being developed at a rapid pace, not just with the printing technology but the materials used as part of the printing process. From an automotive production point of view, extensive research is being undertaken in the use of metal-based 3D printing processes as these offer the greatest advancement in terms of both reducing production times and increasing customer satisfaction in the aftermarket service sector.

On the production side, manufacturers such as VW Group are already producing 3D metal parts, initially on concept cars being exhibited at motor shows such as Geneva. 3D printing is actually transforming the design and engineering of tomorrow’s vehicles as more and more parts are being identified for ‘design for replacement’. So for example if a car goes in for a service and a broken support bracket needs to be replaced, rather than ordering a new bracket from a supplier, the replacement bracket can be 3D printed in the dealer service centre and then fitted to the car being repaired. This introduces the concept of the ‘zero length supply chain’, where parts can be 3D printed on demand and no 3PLs are involved in the delivery of replacement parts. This is likely to transform the automotive aftermarket service sector. One manufacturer, Local Motors in North America is pushing 3D printing technologies to its limit by manufacturing an entire vehicle using 3D printing processes. Local Motors could be considered as an automotive industry disruptor in a similar way to Tesla Motors. Whereas Tesla has cornered the market in the premium electric vehicle market, Local Motors looks set to transform the modular construction of vehicles using new 3D printing technologies.

Digital Transformation

Wearable Technologies – In recent years there has been a trend to develop mobile apps for enterprise smart phones and tablet devices however now there is an increasing trend to develop apps for wearable technologies as well. The adoption of wearable technologies in the consumer sector has grown exponentially over the past couple of years. Technologies such as Apple’s Watch, Microsoft HoloLens and Google Glass have been getting the most attention from the enterprise and this has been driven by a need to provide employees with digital product information any time, any place or anywhere. Apple Watch is relatively new to the market and enterprises are still learning how this technology could benefit production and supply chain operations.

The ability to view information relating to B2B transactions such as purchase order status or Advanced Ship Notice delivery status could transform the delivery and monitoring of such transactions across a business network. For example being able to act upon an undelivered ASN before it impacts downstream production processes, could be of immense benefit to a company. In addition using mapping apps to track shipment deliveries etc could help to increase the level of end to end visibility across a supply chain. More info on this in an earlier blog. Microsoft HoloLens, using augmented reality technology overlaid across a real world environment, could transform collaborative review processes. For example not just at the design stage of a new project but also across retail distribution networks where advanced features of a new vehicle can be demonstrated to potential buyers. Volvo Cars announced a partnership with Microsoft to install HoloLens across their dealer networks to allow potential buyers of their cars to visualize and ‘experience’ the various safety features of their vehicles. To learn how HoloLens could be used for visualizing information flowing across our Business Network, take a look at this blog.

The one piece of technology that obtained the most interest when it was launched two years ago was Google Glass. Even though version one was retired by Google in 2015, Version two is rumoured to be released in the very near future. Glass has the ability to transform how for example production workers access digital assembly information or how service technicians access repair information. VW announced in December 2015 that they were deploying Glass to production workers in one of the factories, providing them with the ability to view assembly drawings, assembly videos and other product specific digital information within the Glass device. This allows workers to access any digital asset related to the assembly of a vehicle. Devices such as Glass will transform the role of the warehouse picker who can be guided to part collection points using maps and other location specific information which can be presented in their Glass device, keeping their hands free at all times.

Advanced Robotics Technologies – Over the past few years, Google has acquired eight robotics companies including the infamous Boston Dynamics, a leading developer of advanced robotic devices for the US military. Google has been applying their robotics research towards production environments and in the future it is possible that Google may develop an operating system specifically targeted towards managing production robots. In fact, Google is already working closely with Foxconn, a leading contract manufacturer in the high tech sector, to replace up to a million manual workers across their Chinese production plants with advanced robots known as ‘Foxbots’. One of the key drivers for this robotics research is to try and develop more intelligent robots that can not only think for themselves but also sense their surroundings in a more accurate manner. Another leading robot manufacturer, Rethink Robotics, developed the ‘Baxter’ robot to try and transform production line operations. Traditional single arm robots normally require a safety cell to work within so that workers on the shop floor don’t get injured. Baxter meanwhile has proximity sensors placed in both of its arms so that if anyone approaches Baxter then it can shut down immediately. The area of artificial intelligence is going to further develop the advancement of industrial robots and when combined with the connected nature of the ‘Internet of Things’, production lines are going to become increasingly automated, self-sensing and more responsive to changing production requirements.

The Internet of Things – if there is one disruptive technology that is getting the most interest from the industrial manufacturing sector, it is the Internet of Things (IoT). IoT or the Industrial Internet, Internet of Everything, Internet Plus etc all exist to achieve the same thing, namely to provide a way for billions of connected devices to be able to transfer gigabytes of data with Big Data repositories where trends can be analysed and reported upon.

The IoT will transform the 360 degree view of information and visibility of physical shipments moving across end to end supply chains. RFID technologies have been used for over twenty years, with mixed success in terms of adoption across the manufacturing industry however the IoT gives RFID a new sense of purpose and further investment in RFID technologies is now taking place to support IoT initiatives.

IoT is also driving significant merger and acquisition and consolidation activities across the high tech sector, with a significant amount of M&A activity taking place in the semi-conductor sector. IoT is transforming industries, business processes and providing companies with significant operational benefits. The supply chain stands to benefit considerably from the IoT and there are three immediate areas where IoT can add value to a supply chain environment. To find out more about these three use cases, please take a look at an IoT  webinar with the lead IoT analyst from Gartner late last year.

Digital Transforrmation

All five technologies that I discussed in this blog post will eventually find their way into more digital supply chains, as depicted by the diagram above. Key to the success of these future digital supply chains will be to establish an end to end ‘digital backbone’. B2B/EDI networks will evolve into more intelligent business networks where connected devices can share structured and unstructured information in a seamless manner with backed enterprise systems and Big Data repositories. OpenText is continually investing in our Business Network and my previous blog post highlighted some of the recent enhancements we have made to our Business Network. I will discuss further enhancements in the near future. OpenText has a broad portfolio of Enterprise Information Management solutions to help enable the digital business. One thing’s for sure, B2B integration will be at the heart of these digital transformation initiatives and I will share some proof points on how this will be achieved in future blog posts along with discussing the type of supply chain transformation initiatives being undertaken. If you would like to learn more about the IDC study then I will be presenting key findings at our series of European Innovation Tour events during the second half of March 2017. If you haven’t registered yet then please click here.

OpenText Innovation Tour

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