I am dreaming of a world where I, and our customers, can predict and forecast much more accurately.
Current hit-or-miss forecasting and demand planning is extremely expensive in lost opportunities, in wasted dollars and in wasted resources. In my dream, we know exactly where a product is at all times and how it is being used.
Does the consumer actually use the product and, if so, how frequently and how well? Is the product flying off the shelves today?
This dream is about to come true for many companies. As the Internet of Things extends to more and more products, data becomes more prevalent and useful.
Successful companies will figure out how to build technology into their product such that they can gather data. The most innovative companies will harness and analyze this data to make great decisions, create unique value for customers and optimize their delivery system.
Connected devices, Internet of Things, Smart Manufacturing — all are buzzwords describing the changes happening as technology becomes embedded in each process, each product and each company.
We used to talk about each company having technology. Now each company will be a technology company.
Effect on supply chain
There is no other place where these changes will be as profound as in the supply chain. The changes will happen on two levels: The product itself will change, and supply chains will utilize technology at a different level.
Traditional products will be displaced by products with integrated and critical technology components. The entire definition of products and manufacturing will change as product companies offer integrated technology services and build related user communities.
Fitness devices are premier examples in the consumer space. I also marvel at changes in industrial products, such as our forklifts providing data about utilization, accidents and maintenance. The forklift manufacturers have suddenly become software developers, electronics buyers and builders of a community for best practices.
The supply chain becomes not “just” about manufacturing and shipping products; it is about helping to gather, harness and utilize data; about servicing the user community; developing the programs to support interaction. This shift demands different skills, different organizational structures and different innovation cycles.
Supply chains are entirely dependent on technology, even today. As complexity, regulations, globalization and consumer expectations increase, the dependency will only become more profound.
Yet the visibility and controls will go to the next level, as products, packaging and transportation embed sensors that are integrated into visibility platforms.
We will have visibility to demand at the consumer and retail store level. We will also be able to track availability of components and finished goods. We will have the ability to customize products, often real-time, wirelessly.
The prediction is that 80 percent of current companies will not be able to survive this transition. Survivors dream about the new possibilities and position themselves and their organizations to be competitive.
The new success criteria will be innovation, use of technology in products and delivery systems, agility in both innovation and supply chains, understanding the users and a strong collaborative culture. ●
Hannah Kain is founder, president and CEO at ALOM.