SCDigest: Here Soon, Technology that will Dramatically Impact Supply Chains

Feb 02, 2009

By Dan Gilmore, Editor-in-Chief

Through a
special arrangement, presented here for discussion is an excerpt of a current
article from Supply Chain Digest.

In his book, Jump the
Curve, Jack Uldrich discusses how rapidly growing technologies (or trends)
can stay small for a long time when starting from a tiny base, but then
suddenly explode – leaving many companies unprepared.

First, a lesson on the
unique attributes of exponential growth. Mr. Uldrich notes in the book
an example using a water lily. Let’s say you have a single water lily in
a pond that will grow to cover the entire pond in 30 days. Guess how much
of the pond would be covered in 20 days? Much, much less than most people
– just .01 percent! In fact, at day 25, just over 3 percent of the
pond would be covered. The growth in the last five days is astounding.

It turns out there are
more of those areas than we might realize, zooming along at a rapid pace
and likely to soon gain real critical mass. Here’s a few examples of what
Mr. Uldrich sees as game-changing technologies:

Robots: From surgery to military operations
to even the home, “I, Robot” has already come or will be here
soon. Stanford students, Uldrich said, have built a robot that can assemble
an IKEA bookshelf. The number of personal robots, still in their infancy,
really, employed to do vacuuming, scrubbing and other household or industrial
chores, is expected to grow from 2 million worldwide in 2007 to 9 million
this year – now that’s exponential growth.

The potential for robotics
in manufacturing and logistics is immense. Not only as a cost reducer,
but potentially allowing more affordable customization, more on-demand
production, or changing the cost dynamics of outsourcing.

Computing Power: We have plenty of powerful computers
already, but we are still just scratching the surface. Mr. Uldrich says
that an entry level Cray Supercomputer – incredibly powerful machines – can
now be purchased for as little as $25,000, and are heading further south.
This raw computing horsepower will be enabled by a new generation of software
that is being developed using such techniques as “genetic algorithms” that
can take advantage of this power and solve problems that machines simply
couldn’t handle before.

Nanotechnology: In short, nanotechnology is the
science of being able to manipulate atoms – something we have only
fairly recently learned how to do, but the ramifications of that capability
are endless and profound. For example, scientists have the ability right
now to make real diamonds using nanotechnology. (What is
a diamond but a string of carbon atoms?) What if everyone can have a two
carat, perfectly clear engagement ring for $99? This could
change the whole perception of diamonds.

Mr. Uldrich even expects
RFID to hit this kind of exponential growth curve soon, and by some measures,
though still relatively insignificant in the total scheme of things, RFID
is already seeing that kind of growth now.

Discussion Questions:
Do you agree there are a number of technologies being developed/applied
right now that could be real game changers? What do you see as the most
dramatic or powerful, for businesses, supply chains or consumers?

Join the Discussion!

11 Comments on "SCDigest: Here Soon, Technology that will Dramatically Impact Supply Chains"

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Dan Gilmore
Dan Gilmore
8 years 10 months ago
I think Professor Weitz has it closest to the sense that Uldrich and I were promoting here. There are a number of technologies in gestation right now that can not only deliver some or even substantial business process improvements (e.g., bar coding earlier, probably RFID some day) but dramatically change the business landscape for thousands of companies. The web’s impact on the travel and music and soon movie business is a great example. For my piece, I naturally picked those that had the chance to have a major impact on the supply chain, but Uldrich lists many others that have a more consumer orientation. Nanotechnology simply has the potential to change just about everything. Your danger from being late to bar coding in the 1980s/90s was modest, and easily rectified. But some of these technologies may have much more existential implications. Another good example, not cited by Uldrich: all-electric cars are vastly simpler in design and to manufacturer that those running on gas or hybrids. Much fewer parts. If they were to take hold, it… Read more »
James Tenser
8 years 10 months ago

I’m with Len and a few others–mobile technology and social networking have great disruptive potential with regard to how we bring products to market.

But I also think the focus on supply chain technology improvements tends to divert our attention from where the greatest fundamental opportunity lies: The stores themselves have emerged as the chief limiting factor in retail effectiveness. RFID does seem promising as a solution enabler in this realm, however real business process changes are needed more than any particular technology or tool.

Like the wise man said, it’s not the hammer; it’s not even the hand that wields it; it’s the brain that controls the hand. Some problems just aren’t nails.

Max Goldberg
8 years 10 months ago

There are always a number of technologies that could explode onto the scene at any minute. Others have been around for some time and are about to have an even greater impact on retail.

I don’t think we have seen the full impact of social media and believe that it will continue to change the fundamental ways that retailers and consumers communicate and operate.

On the other hand, I’m still waiting for all of the new technology to generate more free time. It seems to be doing the opposite. Perhaps robots will free parents from those three dreaded words: “Some assembly required.”

Len Lewis
Len Lewis
8 years 10 months ago

Mobile phones. We are just scratching the surface of what they can do.

Anne Bieler
Anne Bieler
8 years 10 months ago

I believe RFID will start delivering on some of the promise for retail. It’s taken time for many retailers to implement the IT systems that meet today’s expectations. With new technologies for printable, adaptable and cost-effective solutions, expect to see a lot more in many categories. Amazing that we still see so many out-of-stocks, etc on shelves, particularly in high margin categories.

Another area that will change suddenly at some point is battery technology–from elimination of heavy metals to robust, rechargeable solutions to all the things that power our hand-held society–change is coming!

Barton A. Weitz
Barton A. Weitz
8 years 10 months ago

I agree with Pete Fader that the concept of technologies taking off after a gestation period is not new. The critical issue is identifying technologies that are disruptive, change the playing field, versus technologies that are facilitating, improve the play of the present players. For example, the Internet was disruptive for the travel industry and music retailers but facilitating for most other retailers.

I doubt that RFID will be disruptive. It will take off eventually and make prepared retailers more efficient.

Another issue is whether or not you want to be on the bleeding edge of new technologies. It might be better to be an early follower than a pioneer.

Peter Fader
8 years 10 months ago

As Ian said, this concept is an old one. Geoffrey Moore brought it to our attention long ago in “Crossing the Chasm,” and countless others have (re)discovered it as well….

Bill Robinson
Bill Robinson
8 years 10 months ago

I have always been fascinated at the pace of technology adoption in retailing. Retailers are always cautious, even threatened by new technology. Then they enter a phase of protracted experimentation. Those that sell technology to retailers will recognize this as the dreaded “pilot.”

Finally, as if someone blows a whistle from the sideline, the industry en masse absorbs the technology in the space of 18 to 24 months. Why does this occur? It’s because retailers must roll out technology suddenly and expertly to their entire domain of stores. They must have critical mass or they risk chaos.

I’ve seen this phenomenon dozens of times in my career: electronic POS, 3rd party credit, barcoding, Internet, Wireless, Kiosk, etc, etc.

What technologies will roll out soon? I don’t know exactly but I know it will be rapid. Look for biometrics, widespread cell phone apps, RFID, and advanced business intelligence.

Ian Percy
8 years 10 months ago
Thus has it been since the beginning of time. Fire was a game changer and brilliant people have been ‘jumping the curve’ ever since. But when you look it these examples are all about ‘things’. I’m not sure ‘things’ are our problem. Will a $99 diamond lead to a happier marriage? Isn’t an unhappy workplace with a supercomputer still an unhappy workplace? Which is better: a) have a robot assemble your kid’s bike; or b) laying it all out on the garage floor and assembling it with your child? BTW you’re supposed to have parts left over…it’s part of the experience. I’m all for nifty clever things. What we can’t seem to understand, however, is that sooner or later our happiness and prosperity gets down to the faith, love and spirit in the human heart. Human beings remain the only life form that doesn’t naturally reach its fullest potential. We persist on self-sabotage if not self-destruction. Look at the current mess we’re in and I rest my case. Do we need to ‘jump the curve’?… Read more »
Devangshu Dutta
Devangshu Dutta
8 years 10 months ago
The water lily example is just so apt to describe technology adoption in the retail sector (especially in fashion and other soft goods). And when a weed-killer gets dumped in the water at an early stage, the adoption can take even longer. In 1985 the industry was breaking new ground with the principles of Quick Response (QR)–then in the 1990s Efficient Consumer Response (ECR), Collaborative Planning and Forecasting (CPFR), and numerous other acronyms appeared in the supply chain alphabet soup. During 1999-2001 in my previous company, the team developed a collaborative supply chain enablement solution to create an easy-to-understand common platform for the various stakeholders in a supply chain to work together seamlessly. By 2001 we discovered that we were among a handful of companies speaking the same language, and among a sea of 300+ web-based portals aiming to catch up. And then the bottom fell out of the market. As we stand today, about a decade on, design-to-delivery lead times are still measured in months, buyers are still trying to gaze into crystal balls… Read more »
Mark Lilien
8 years 10 months ago

The #1 technology that will disrupt supply chains: none of the ones listed above. For grocery, the biggest disruption will probably be more recalls caused by poor handling and manufacturing practices. For nonfood, the biggest disruption is well underway: fewer bricks and mortar stores, with more volume supplied by central warehouses via the internet (Amazon and every other e-commerce web site.)

The non use of technology (for food) is the biggest disrupter, not the use of technology. For nonfood, the internet’s disruption has at least another decade to take market share away from bricks and mortar stores.


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