Gartner: Eight technology trends in supply chain
As supply chain leaders seek to explore the benefits of digitalisation, it has become critical to introduce how to leverage innovative technologies that have the potential to disrupt supply chain operating models that provide a competitive advantage.
“Gartner research shows that supply chain leaders perceive technology primarily as a competitive advantage — they focus on long-term value,” says Christian Titze, Vice President Analyst, Gartner. “Yet, 80% of organisations favor a cautious approach when it comes to adopting new supply chain applications and technologies.”
It’s a framework to combine a comprehensive offering of technologies in the best possible way, such as historic legacy platforms with recently deployed tools and planned investments. This means different things for different organisations so it’s important that supply chain leaders find their individual definition. If deployed correctly, hyperautomation can encourage broader collaboration across domains and act as an integrator for disparate and siloed functions.
2. Digital supply chain twin
It’s a digital representation of the physical supply chain and is derived from all relevant data across the supply chain and its operating environment. This forms the basis for all local and end-to-end decision-making. “DSCTs are part of the digital theme that describes an ever-increasing merger of the digital and physical worlds,” Titze says. “Linking both worlds enhances situational awareness and supports decision making.”
3. Continuous Intelligence
It is one of the biggest opportunities for supply chain leaders to accelerate their organisation’s digital transformation. It takes a computer’s ability to process data at a much faster rate than people can. Supply chain leaders can look at the processed data to understand what is happening and take immediate action.
4. Supply chain governance and security
It is an increasingly important macro trend, as global risk events rise and security breaches impact companies on a digital and physical level. “Gartner anticipates a wave of new solutions to emerge for supply chain security and governance, especially in the fields of privacy as well as cyber and data security,” Titze says. “Think advanced track-and-trace solutions, smart packaging, and next-gen RFID and NFC capabilities.”
5. Edge computing and analytics
The rise of edge computing, where data is processed and analysed close to its collection point, coincides with the acceleration of Internet of Things (IoT) devices. It is the technology needed when there is a demand for low-latency processing and real-time, automated decision-making. Edge computing is currently making its way in the manufacturing space. For example, there are some companies that have leveraged driverless forklifts for their warehouses and some heavy equipment sellers that can use edge computing to analyse when a part needs maintenance or replacement.
6. Artificial intelligence
AI in supply chain makes up a toolbox of technology options that allow companies to understand complex content, engage in natural dialogue with people, enhance human performance and take over routine tasks. AI currently helps supply chain leaders solve long-standing challenges around data silos and governance. Its capabilities enable more visibility and integration across networks of stakeholders that were previously remote or disparate.
7. 5G Networks
In comparison to predecessors, 5G is a major step forward in regard to data speed and processing capabilities. The nature of 5G means that the potential for supply chain is significantly increased. For example, running a 5G network in a factory can reduce latency and accelerate real-time visibility and IoT capabilities.
8. Immersive experience
Immersive experience technology such as virtual, augmented and mixed reality has the potential to substantially change the trajectory of supply chain management. These new interaction models amplify human capabilities and organisations are already seeing the benefits in use cases, such as onboarding new workers through immersive on-the-job training in a safe, realistic virtual environment.
Japan Seeks to Revive Stalled Semiconductor Industry
Post-pandemic, Japan has seen the consequences of relying solely on foreign imports for its semiconductors. Over 64.2% of its chips are usually imported from South Korea and Taiwan, leaving the country dependent on its neighbours. Industries from auto manufacturers to consumer electronics firms wait for chips, to no avail. But now, the Japanese government looks likely to put real funding behind its semiconductor industry, with top officials emphasising their support.
Domestic supply chains have never been more important. Rather than remain tied to international shipping routes during shortages and delays, governments are doing everything in their power to develop local lines of supply. But the question remains: can Japan pull it off?
How Will Japan Pay For It?
Herein lies our first issue. Japan’s debt has rapidly increased over the past few years, and the semiconductor industry will need roughly a trillion yen—US$9bn—in this fiscal year alone. This cost, however, pales in comparison to what Japan could lose if it fails to keep up with Europe and the US. Both nations have launched aggressive funding measures to revive their local semiconductor industries. And if Japan refuses to invest due to its debt, it could slow down progress in fields ranging from artificial intelligence to autonomous driving.
According to Tetsuro Higashi, the former president of Tokyo Electron and Japan’s top government advisor in semiconductor strategy, ‘If we miss this opportunity now, there may not be another one’. Yet one advanced wafer fabrication factory can cost more than US$10bn, and any money poured into the industry will go fast. That’s why Japan, rather than invest trillions and trillions in failing domestic firms, is considering a second option.
What Do They Plan To Do?
Japan now intends to look abroad and convince overseas chip foundries to come to its shores. Its past failures mostly centred on trying to merge domestic firms that were already going through tough times. ‘This sort of made-in-Japan self-reliance approach hasn’t worked out well’, said Kazumi Nishikawa, a director at the Ministry of Economy, Trade, and Industry’s IT division. ‘This time the goal is to offer a strong incentive for an overseas logic foundry to come to Japan’.
As follows, Japan will now reach out to industry partners and leaders in other countries, including the industry heavyweight Taiwan Semiconductor Manufacturing Co. (TSMC), to build Japanese bases. According to the South China Morning Post, the heart of Japan’s mission is a US$337.2mn research and development project in Tsukuba that will involve TSMC and more than 20 Japanese firms. ‘I think we need to cooperate with our overseas counterparts’, said Akira Amari, a senior member of the ruling Liberal Democratic Party. ‘[And] TSMC is the world’s top logic chipmaker’.
Indeed, if that’s Japan’s strategy, the future looks bright. TSMC recently set up a venture near Tokyo to research energy-efficient 3D chips with several Japanese partners. And in the future, the multinational chipmaker may consider expanding its Japanese operations—that is, if government incentives pave the path forward.