60 second with Scott Sopher, Deloitte

Scott Sopher, Deloitte Consulting  
Title: Global Supply Chain Leader, Deloitte Consulting LLP’s Supply Chain Practice
Location: Atlanta, Ga.
Experience: More than 28 years of experience across many industries assisting clients in supply chain strategy, planning and transformation
Primary Focus: Supply chain strategy and operations improvement in warehousing and logistics

Modern: Let’s look at the recent survey you conducted with MHI. First, who was surveyed? And, since this was the second of these reports, how was this different from last year’s project?

Sopher: The survey included more than 400 supply chain professionals from a range of industries and company sizes. For instance, 57% of respondents held executive positions. And, the companies ranged in size from small to large, including 11% that reported sales of $10 billion or more. What was different this year was a focus on how companies are using emerging technologies to drive innovations in their supply chains. We did a deeper dive into user cases and provided examples that executives can use in their own supply chains to meet the conflicting demands to be better, faster and cheaper.

Modern: The report is titled “Supply Chain Innovation—Making the impossible possible.” What does supply chain innovation mean to you?

Sopher: We think of innovation as the ability to prototype, experiment and fail or succeed quickly to maximize an investment. It’s the appropriate use of technology as well as automation to develop new techniques to meet market demands, such as omni-channel, that we didn’t have before. It’s also about driving strategies that are scalable and affordable. Another factor at play is that innovations are adding a disruptive element to the industry. Emerging technologies like 3D printing will disrupt our industry and bring competitive advantage to some. I do think sometimes people don’t imagine that innovation applies to a DC, but when I went to ProMat, some of the automation I saw was very innovative. For example, you used to see a storage and retrieval crane going up and down an aisle to putaway a pallet or a case. Now, you’re seeing shuttle and robotic technologies that increase throughput and provide storage in a much smaller space. That’s innovation.

Modern: We were struck by one of the first quotes: “Companies that continue to utilize traditional supply chain models will struggle to remain competitive and deliver orders that are complete, accurate and on-time.” What are the traditional supply chain models, and why are they not working?

Sopher: Some traditional supply chains still work very well today. However, what we’re seeing is the need for even greater flexibility; for variability in service level requirements, like the ability to provide same-day service and other alternatives; and companies asking their supply chains to be more predictive than reactive. And, companies are building resiliency into their supply chains to make that happen. Companies are investing in analytics to predict what may be happening so they can respond quicker. They are focusing on the end-to-end material flow versus the segment by segment. At Deloitte, we worked with a retailer that used automation to handle its wholesale channel, retail stores and e-fulfillment under one roof with different order profiles and customer service level requirements. In a traditional supply chain, those would have been separate DCs. That’s an example of emerging technologies changing the way people operate.

Modern: In this year’s report, you identified eight technologies that will transform traditional supply chain models over the next decade. Which will be most important in the next three to five years and why? 

Sopher: Predictive analytics and wearable technologies have only moderate adoption today, but will have the highest growth rate in the next three to five years—a nearly 25% CAGR. The use of predictive analytics is expected to triple in the next three to five years. Similarly, we see people piloting wearable technologies in piece picking environments and for maintenance in remote locations. As the cost comes down, we’ll see more and more interest.

For more on the 2015 MHI Annual Industry Report: Supply chain innovation—Making the impossible possible, visit MHI.org (www.mhi.org/publications/report).