IGD recently published a report looking at the, likely profound, impact of the Internet of Things on supply chains. You can download a free summary of the report here which outlines nine predictions. The one I found most striking, given my role in recent years, was how the Internet of Things “will “equalize” supply chains by increasing visibility, and this means companies will collaborate more as opportunities are surfaced”.
In other words, because of increased transparency, differences – and hence competitive advantages – between individual supply chains will become eroded. (Or rather, the nature of what a competitive advantage is will itself change.) At the same time, opportunities which require end-to-end thinking will become more obvious because everyone in the chain will have access to all of the information in it, rather than (their own) fragments as currently. Altogether, this will make the case for collaboration compelling.
That’s the theory. Of course, many barriers will need to be overcome to get there. Today, one of the biggest barriers to such collaboration is trust, or rather a lack of it. Companies are reluctant to share much of their information for fear that it could erode their competitive advantage or be used against them commercially. However, as technology progresses – whether that’s the Internet of Things or networked, cloud based systems – will trust become less of a barrier as information becomes less “siloed” and therefore less reliant on it to be shared? As the report puts it, “technology may eventually trump trust”.
For example, manufacturers currently rely on retailers to share point of sale data. This doesn’t always happen, and where it does, it can often be out of date, lack granularity or incur charges to access – hardly conducive to synchronisation in the chain. With more sensors on products and platforms, in the future, it may no longer require an active effort from retailers to share this data as it will be instantly accessible, live and in the cloud for all partners. Manufacturers (and retailers) will also be able to see whether their products are on the shelf in stores or sitting in the backroom.
If technology enables or accelerates this, that’s a good thing. But I can’t help feeling disappointed if we, as an industry, were never able to get to the point where collaboration is the norm – indeed, the expectation – through trusting each other. It seems like a failure to adapt. Slowly, but surely, cultural change has been spreading and there are many well-documented examples of collaboration, but the fact that these are so widely heralded shows just how much of the exception they remain.
Even with current (deployment of) technology there is so much more we can do to work together today, improving efficiencies, taking miles off the road and cutting out food waste, simply by trusting each other a little more and sharing information. Of course, we need to adequately protect ourselves, through contracts and other assurances on data security and applications, but the question is how many in the industry have even started the conversations with each other? What can you do to take the first step?
Just because change is inevitable, it doesn’t mean you should sit back and wait for it to happen. With rising costs, complexity and fragmentation, embracing a new supply chain “business model” of transparency, collaboration and connectivity, will bring forward the benefits and help ensure your business successfully adapts to – and even shapes – the future. Try a bit of trust and you may not have to trail technology.