Progress is good. Innovation is good. Invention is good. Until it destroys your business model. And that’s what’s about to happen, because unless the supply chain can adapt, the organization won’t survive. Because it’s going to be spotted by the supply chain first, it’s going to impact the supply chain first, and it’s going to distort the supply chain first. In fact, the new industrialization era is already revolutionizing global supply chains, and if your company hasn’t caught up, it may soon end up in the obituaries. Even some of the largest companies in history couldn’t survive the changes brought on directly and indirectly by technological shifts, including the South Sea Company (which was, adjusted for inflation, the third largest company in history in 1720), the Mississippi Company (which was, adjusted for inflation, the second largest company in history, also in 1720), and the Dutch East India Company (which was the largest company in history, adjusted for inflation, in 1637). These were all bigger than Apple, Microsoft, Google, and Facebook — which could all become blips in future decades. And even if you survive, you can fall from great heights to obscurity. Consider the Hudson’s Bay Company, founded in 1670. It’s still around, and has assets worth almost 8 Billion, but even a considerable number of Canadians aren’t likely to mention it, if they even know if it, if asked for prominent Canadian companies, instead citing companies such as Tim Hortons (sold again for 11.4 Billion last year), Imperial Oil, the Canadian National Railway, and Rogers (if they don’t realize that our biggest companies are actually are banks).
Three changes in particular are going to disrupt your supply chain in the near term, so if your supply chain is not ready, it better get ready. In no particular order they are:
Those of you following SI’s landmark series on The “Future” of Procurement and the “Future” Trends Expose which basically clarified once and for all that the vast majority of “future” trends that were being touted by the average analyst, blogger, speaker, and vendor were actually trends that were years old, decades old, and, in some cases, centuries old and that while a handful were still relevant (as they are still emerging and only affecting the leaders), only a few trends being touted as “future” trends were actually recent enough to still fall into that category. One of these was 3-D printing.
As stated last September, while 3-D printing is not a new technology, as this year is its 30th anniversary, it was only in the last decade that it became accessible to more than a handful of businesses and only within the last few years that it has become widely accessible and affordable. Now that the technology is becoming mainstream, it’s entering a rapid maturization phase in which it’s going to become better, faster, cheaper, and infinitely more powerful. As a result, prototyping is not only going to become more rapid, but more powerful. Engineers will be able to iterate through multiple prototypes in rapid succession without having to wait six (6) weeks for the next iteration from the plant in China. Not only will this support the increasingly shorter and more complex product life-cycles, but it will help reduce failure risk and associated costs, and increase innovation potential as now you can try the product before you commit to a production run.
Robotics is not new, and many factories, such as automotive plants, have been investing in automation for decades. But recent increases in computing power, hardware production, and control systems coupled with open source systems such as Arduino have revolutionized the ability for even garage start-ups to build elaborate control systems, create advances in robotic automation, and even unmanned vehicles for air, sea, and inhospitable (volcanic) environments. Space age developments can literally be done in a garage workshop. So it won’t just be your largest competitor that you have to fear, but an unknown start-up that can revolutionize a production process and decrease the cost of production by orders of magnitude.
Bio-plastics are new age plastics that are derived from renewable biomass sources that are more environmentally friendly (as they are biodegradable) than petroleum base plastics. Although they are currently more costly, and in some case, more environmentally damaging to produce than traditional plastics, the inflection point is coming and then your competition is going to have cheaper packaging that is more accepted by the market than you. And while the focus now is on packaging and industries like electronics and automotive where injection moulding is required, they could even have applications in medicine. Think about liquid bandages. Variations of bio-plastics might lead to the (accidental) discovery of better, and safer, polymers. Bio-plastics might have less risk of leaking when used in casts. And so on.
And this is just the first wave of disruptive innovation that your supply chain has to deal with. More waves are coming. While progress is wonderful at a societal level, for those organizations not ready, it’s damning since the very nature of innovation means that for something new to emerge, something old has to die.