Forget the supply chain. It’s all about the network

Last week, I attended the Gartner executive supply chain conference in Phoenix. Given Gartner’s deep expertise in technologies, including emerging technologies, the event isn’t so much about where we are today in the supply chain, but where we’re headed. For that reason, there was a lot of discussion about robots in the warehouse, 3D printing on the manufacturing floor, mobility, drones and driverless vehicles in logistics, and digital business.

These and other new technologies have the potential to change more than how we do things in our factories and warehouses or in our transportation lanes. They are also changing the nature of relationships across a supply or value chain, or whatever term you prefer, suggests Ram Muthukrishnan, director of Cisco Consulting Services – Muthu to his friends.

Most of us think of the supply chain as a linear set of handoffs from one link in the chain to the next, like a relay race. The smoother the handoffs, the more efficient the chain. In that view, procurement orders the raw materials that go to the plant; the plant ships finished goods to the distribution center; and the DC sends things to the end customer.

Instead of a linear chain of events, Muthu, as he’s known to his friends, argues that we’re moving to a supply network. In a network, there are a lot more conversations – suppliers may not only be talking to customers but also to other suppliers; more visibility about what’s going on at any given point in time; and the ability to truly optimize across processes and not just within silos. The handoffs aren’t just linear, like in a relay race; the handoffs are happening all over the network of suppliers, plants and distribution centers, logistics providers, and customers.

For instance, advance notification that a truck with a hot order has left the plant and is going to arrive in the distribution center in four hours could result in the WMS automatically generating an order to pick and stage the other products for that order; the TMS automatically scheduling the transportation for that order; and the customer facing system sending off a notification to the customer about when to expect delivery. Any changes in the plan – say the customer needs delivery sooner or doesn’t have room for the product right now and would rather get it later – could speed up or slow down the network.

Some of this is already in place at Cisco, according to Muthu and his colleagues, and the company continues to roll this out as part of its Internet of Everything strategy. More importantly, it’s happening independently of robots, 3D printing, and drones. They may end up being the icing on top of the supply network cake, but the cake is the ability to capture more real-time data about processes along with the infrastructure to understand the implications of the data and automatically communicate what needs to be done across the network. 

The supply network doesn’t change the actual work we do in the DC of handling goods - or in the plant or transportation modes and lanes. But it does change our role as well as how we relate to our partners and customers.