In pursuit of the ‘Self-Driving Supply Chain'

Industry leaders are now seeking to augment the strengths of their ERP by scaling up solutions around task automation ("Robotic Process Automation") and decision automation ("Cognitive Automation”). This shift is expected to radically transform the way supply chains will be designed, operated and managed in the near future. Deloitte published a paper in which it provides companies with insights on the road to a 'Self-Driving Supply Chain'.

• You can consult & download the complete 'Self-Driving Supply Chain' file below.

In their path towards more digitized ways of working, many organizations have been on a run for decades towards implementing Enterprise Resource Planning (ERP) and Advanced Planning Systems (APS).

Over the last decade however, these organizations have realized that these systems have - next to their merit as systems of records - their flaws: they indeed struggle to completely take away repetitive, labor intensive tasks and, most importantly, they most often fail to support effective decision-making. With that, Industry leaders are now seeking to augment the strengths of their ERP (and the rest of their application landscape) by scaling up solutions around task automation (referred as "Robotic Process Automation") and decision automation (referred as "Cognitive Automation"). Advances in technology — including cloud computing, analytics, artificial intelligence (AI), the internet of Things, and robotics — enable highly responsive supply chains that orchestrate continuous collaboration between supply and demand, planning and fulfillment, expectations and customer satisfaction.

In 5 years from now, Deloitte envisions that the best-equipped supply chains will be the ones which decided to let machines take over the full exception management process and drive autonomous action-taking, from anomaly detection to trade-off analysis to write-back in operational systems to continuous improvement through self-learning. The strength of Cognitive Automation is to enable applications that go beyond the routine to the innovative: from collecting and processing data to analyzing and making contextual decisions, with machines in the driver's seat while humans monitor decisions and leverage machine generated insights to steer continuous improvement within the organization.

In other words Cognitive Automation can be described as taking the old model of people's work being augmented with the help of machines, and turning it into a model where machines do the intensive labor while being guided by people. Industry pioneers with scaled-up cognitive automation capabilities report 27% in cost reduction and expect an increase in revenue of 11 percent over the next three years. With organizations developing capabilities that go far beyond traditional reporting & dashboard capabilities a new type of Control Tower emerges: the "Cognitive Command Centers". These Command Centers distinguish themselves from more traditional Control Towers by their ability to sense and respond to supply chain events in a pro-active, cost-efficient and a data-driven way enabling supply chain to act autonomously. From visibility into key components of the supply chain (e.g. OTIF, Forecast Accuracy, Inventory levels, Production Scheduling Adherence, ...) to near real time decision points down to SKU level. Examples include:

• Shall I produce less / more in week X in order to cover for a spike of demand?

• Shall I redeploy inventory from one location to the other to fulfill demand in country Y?

• What part of my inventory is Slow Moving and Obsolete (SLOB) and what can I do about it?

• What shipments face a risk of being delayed?

• How can I optimize my spend?

• Etc.

Author:

Kevin Overdulve,
Logistics & Distribution co-Lead for EMEA (Deloitte)

More insights on the pursuit of the 'Self-Driving Supply Chain': Cognitive Automation Self-Driving Supply Chain (deloitte.com)