From keeping your food safe and contaminate-free, to tracking flu shot distribution, to making sure diamonds are ethically sourced—the supply chain impacts every part of consumer life. Consequently, supply chain leaders manage a diverse lineup of costs, services and quality goals within their organizations. But not long ago—at the turn of the millennium—many supply chain principles that are now considered integral to the success of business had yet to be imagined.
Shay Scott, Executive Director of Supply Chain and Operations Programs and Executive Director of the Global Supply Chain Institute, explained in his “Survival of the Fittest Supply Chain” speech at the Strategic Logistics Summit on March 19, 2019 that nearly two decades ago, “Businesses saw cost-cutting as supply chain management’s largest asset.” However, Scott—a leading expert in understanding how supply chain management drives business outcomes—detailed that presently, “The supply chain has since transformed itself from disparate functions into an integrated amalgam. Supply chains must not only deliver customer value profitability but also work almost every area of the business to do so—customers, suppliers, sales and marketing, finance and senior leadership.”
Today’s supply chain management looks to new technology and machine learning to get ahead. Mission-critical trends have caught the attention of C-Suites who now rely on supply chain management to work with a variety of teams to reduce waste and increase profitability.
In order to understand where supply chain management is going, we must understand its evolution. Having this knowledge will help us look to the future and anticipate the next phase of the supply chain.
Evolution of supply chain management
According to Scott, supply chain management has evolved through four game-changing themes: strategy and performance, planning and execution, relationship management, and talent and information.
Strategy and performance encompasses three elements:
- Management’s perspective on creating value;
- How well supply chain strategy adapts tactics and operations to environmental changes; and
- The way goals are set and performance is tracked.
In 2000, supply chain management offered cost-based value. Today’s C-Levels see supply chain management’s value as a differentiated service; the total management cost is still important, but so is asset utilization and customer service. This performance can be tracked through service and revenue. When evaluating supply chain management, executives will often look at how working capital, fixed capital, and total cost have been reduced, while also measuring how customer service has been increased.
Planning and execution in supply chain management have changed from relying on historical forecasting to optimize value and now, instead, utilizes customer “end-casting.”
Relationship management was once a monolith, but the supply chain now interacts with customers across the strata. The supply chain activity itself is also now virtually integrated and no longer siloed by verticals. Even external relationships that were once adversarial are now opportunities for collaboration.
Talent and information are approached by companies in a very different way than they once were. Information that was previously hoarded across the supply chain is now shared in a timely and transparent way, changing the way talent is developed. Knowledge development has replaced “job training.”
Together, these themes have changed supply chain management and made leaders take notice. Supply chain management delivers results by creating a balance between growth and efficiency.
Mission-critical trends emerge
Supply chain management’s focus on growth means that we have already seen new mission-critical trends emerge that were not initially recognized in 2000. Gartner’s Hype Cycle for Emerging Technologies, 2017 points to three major trends for all industries: AI, digital platforms, and transparently immersive experiences.
With Gartner’s trends in mind and looking forward to 2025, UT Haslam’s Global Supply Chain Institute anticipates:
- Innovation will become value transformation. Rather than simply welcoming the new, we will need to throw out what we’ve done before and proactively pursue change.
- “Smart” technology will become autonetic technology.
- Global optimization will become glocal optimization, a global-local hybrid that drives profitability by paying attention to every moving part at every level—local and global.
- Risk management will become risk prognosis. To reach maximum risk reduction, we must outsmart what might happen. We must know what can happen before it happens.
- Sustainability will become prostainability. Supply chains will improve environmental and social outcomes by marrying these goals with a company’s bottom line. Combining economic and social objectives will improve performance for everyone.
What’s next?
While 2025 isn’t here yet, the supply chain is constantly looking forward. In his research, Scott, in concert with his colleagues at UT Haslam’s Global Supply Chain Institute, has found four themes that will shape the future of supply chain management:
- Technology Stacking
- Rethinking Data
- New Era for Collaboration
- Human Capital and the Nature of Work
For supply chain managers, this means the future is full of exciting potential—you just have to be savvy about it.
Data and data capabilities are already changing. The IoT, crowdsourcing, and physical technologies are disrupting data. With this will come necessary analytical improvements. Cognitive AI and blockchain are exciting realities in the future of supply chain management. The variety of applications within supply chain management—from planning, to sourcing, to manufacturing, to delivering, to returning—will change, as will the value supply chain management provides to a company. There will be increased visibility, agility, speed, and precision, which will give supply chain managers new relationships and new responsibilities that pertain to decision-making.
In short, your role as a supply chain manager and your skills—analytical, relational, strategic, and technical—will need to evolve and grow with the industry.
Prepare for the future
Supply chain is constantly evolving, and with the right outlook and knowledge-base, you can help your company stay ahead of the curve by turning disruption into an opportunity for growth. If you’re interested in the future of supply chain management, consider an Online Master of Science in Supply Chain Management at UT Haslam College of Business.
UT Haslam, home to Scott and the Global Supply Chain Institute, is one of the top-ranked and most industry-connected programs in the world. Now, you can get your MS in Supply Chain Management with Haslam online.
The online program was designed for flexibility and can be completed full-time or part-time. Weekly, live synchronous classes will help you develop critical relationships with your teachers and classmates, and you’ll gain real-world experience through a capstone project. At UT Haslam, you’ll master how supply chain management is used to deliver impactful results to a company.
With the most relevant curriculum in supply chain management, Haslam prepares you to take the next step toward your future, whether that means getting ahead in your present organization, or embarking on a new career.