Why prediction and automation will drive supply chain activities

It's not uncommon to see predictions at the end of any year. What's interesting about the future of supply chains, though, is that prediction may be the order of the day for some time to come, as AI and smart systems become more of a commonplace. Strategic shifting of logistics systems is a key part of this, as businesses select the locations and facilities that best suit them.

The Wall Street Journal reported on the plans that The Merck Group, also known as Merck KGaA, has for its own future processes. The company wants to increasingly adapt to the digital space with demand processing, real-time supply chains measures and other enhanced systems.

Using artificial intelligence, the systems within the supply chain could self-regulate, potentially reducing the time it would take for the business to keep up. However, the source did specifically clarify that the company would predict demand, not revenue, showing a limit as to what the new tech would effectively do.

There are a few ways businesses would benefit from more predictive solutions, as the following list will show.

Planning long-term

With software options that look to the future, it seems natural that companies would get in a broader frame of mind. As a Supply Chain Digital piece recently stated, there is a bit of a paradox at work here.

While the use of predictive analytics will have lots of value in the short-term, allowing companies to react more quickly, it's the bigger picture that will show the greatest use of predictive technology. Retailers in particular can use insights to prepare for both major future demand and immediate changes.

New delivery methods

In as little as three years, a new dynamic shift could see companies increasingly targeting the consumer for better satisfaction. In a recent abstract, IDC Manufacturing Insights Global Supply Chain Strategies VP Simon Ellis said that there will be some possibility for changes as soon as next year.

"While the predictions offered here largely focus on the near term to midterm (2017–2020), the impact of many of these will be felt for years to come," Ellis said. "It is worthwhile to note that predictions are not finite but rather occur on a continuum of change within the wider ecosystem of the manufacturing industry and global economy."

New software can also match hardware and vehicles designed to make smoother deliveries.

Thinking smaller

Having the greatest impact could require companies to focus on local solutions to reach all customers. Combining this with the predictive mode could mean more data points for analysis and a more robust list of points to draw from for making meaningful predictions.

As a Supply Chain Quarterly piece on IDC's predictions noted, the scope of what manufacturers focus on could change as well, narrowing down from the way items are stacked in warehouses to the specific objects themselves. This granular approach could, in turn, be a call for smarter global sourcing to improve logistics.

Invest in options for the future of the supply chain that is perfect for both the tech you plan to use and the new approach to managing complicated networks.