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  December 15th, 2017 | Written by

Ten Supply-Chain Predictions for 2018

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  • Digital transformation will impact supply chain planning, execution, procurement, and security.
  • The impact of digital transformation on supply chains will be felt for years to come.
  • Digital transformation will effect change in the manufacturing industry and global economy.

A new report from the market research firm IDC, “IDC FutureScape: Worldwide Supply Chain 2018 Predictions,”  posits that digital transformation (DX) is the key overriding theme in IDC’s worldwide supply chain top 10 predictions for 2018, including the impact for supply chain planning, supply chain execution/fulfillment, and procurement and supply chain security. While the predictions largely focus on the near term to midterm (2017–2020), the impact of many of these predictions will be felt for years to come. Most refer to a continuum of change within the wider ecosystem of the manufacturing industry and global economy.

“The supply chain is undergoing almost unparalleled levels of change,” said Simon Ellis, program vice president, Global Supply Chain Strategies. “The older measures, productivity, quality, and service still apply of course, but we now see the specter of digital transformation poised to change everything. Whether the way that manufacturers and retailers plan, procure, or fulfil, digital transformation is both opening up new opportunities and presenting new challenges.”

Here are IDC’s worldwide supply chain 2018 predictions:

Prediction 1: By 2020, 60 percent of G2000 manufacturers will rely on digital platforms that enhance their investments in ecosystems and experiences and support as much as 30 percent of overall revenue.

Prediction 2: By the end of 2020, one-third of all manufacturing supply chains will be using analytics-driven cognitive capabilities, thus increasing cost efficiency by 10 percent and service performance by 5 percent.

Prediction 3: By the end of 2018, half of manufacturers will be using analytics, IoT, and social collaboration tools to extend the integrated planning process across the entire enterprise, in real time.

Prediction 4: By 2021, 60 percent of manufacturers will be leveraging an advanced analytics-driven data aggregation platform for supply chain operational data to improve the speed and accuracy of the fulfillment process.

Prediction 5: By 2019, 80 percent of supply chain interactions will happen across cloud-based commerce networks, dramatically improving resiliency and reducing the impact of supply disruptions by up to one-third.

Prediction 6: By 2021, one-third of manufacturers and retailers will be tracking goods using blockchain in anticipation of regulatory changes, resulting in an improvement in delivered product quality of up to 20 percent.

Prediction 7: By the end of 2018, the use of industry clouds, blockchain, and cognitive will have dramatically enhanced the understanding of supplier capacities for one-third of manufacturers, enabling the iterative rebalancing of critical supply based on capabilities rather than units and quantity.

Prediction 8: By 2019, robots will be in use in 50 percent of fulfillment centers, resulting in productivity gains of up 30 percent and helping drive down the cost of operations and offset an increasing shortage of labor.

Prediction 9: By the end of 2019, cybersecurity will have surpassed physical security as a top concern for one-half of all manufacturers, and in the transition to digitally enabled, cognitive supply chains, cybersecurity will have become a top investment priority.

Prediction 10: Smart postponement techniques and additive (3D) manufacturing will have been deployed by one-third of manufacturers by 2020, thus reducing delivery latency by up to 50 percent.