SCM Experts Consider the Internet of Things to Become the Most Relevant Innovation Driver

There is wide agreement among industry experts that the Internet of Things is going to be the most significant driver of future technological innovations. This is the result of a survey conducted at the Arvato Supply Chain Masterclass event held in September 2016. But also other disruptive innovations like Big Data, 3D Printing, Cloud Deployment, the Internet of Things (IoT) are all around us. At the second in a series of Masterclasses organized by Arvato SCM Solutions, industry experts explored the impacts of disruptive innovations on the future Supply Chain industry. 

 The presence of disruptive technologies is growing. Therefore, the Supply Chain Masterclass held in Santpoort-Noord (the Netherlands) focused on the very latest developments. “Disruptive technologies are changing the way we live”, says Andreas Barth, President Hightech & Entertainment at Arvato SCM Solutions. “And the Supply Chain industry is not immune to this. New technologies will have a huge influence on the Supply Chain in the future.”

These developments are challenging more and more the industry’s ability to adapt. From the connection of various devices and machines to the creation of intelligent networks along the entire Supply Chain: new technologies will not only enhance competitive advantage – the industry also needs to reconfigure organizational processes to introduce them. “Supply Chains are expected to be flexible, agile and must be ready to respond to or anticipate a change right now”, says Edwin van der Meerendonk, VP European Operations at Walt Disney. “However, the big question is how do you recognize a disruptive technology? Also, some technologies get there faster than others so it’s not easy to assess the impact in the short term. One good indication is when a new technology will become affordable.”

During the Masterclass event, the participating Supply Chain professionals were asked in a survey what they “consider being the most relevant disruptive technologies that should drive innovation” in their Supply Chain “in the next 5 years”. Almost half the participants agree that the Internet of Things/Interconnectivity platform will have the most significant impact, whereas almost one third predict 3D/4D Printing to be the most important innovation driver in their Supply Chain. However, only a fraction stated that Big Data Analysis is going to be at the cutting edge when it comes to innovations. Finally, Robotization was considered least likely to have an effect.

The most recent developments influence the behavior of customers as well: savvy consumers are expecting a seamless, connected experience across all channels. Thus, creating direct relationships with consumers through a direct-to-consumer channel can be useful in meeting these requirements. The question remains which of the disruptive technologies could help unlock this channel? The majority of the Supply Chain professionals that participated at the Masterclass event identify Augmented Reality as the most helpful connection platform, with Wearables as a close runner-up. Only one seventh of the surveyed professionals consider the Internet of Things to be helpful in building a direct-to-consumer channel, whereas 3D/4D Printing and Big Data Analysis come last in the survey.

In a 2013 report, McKinsey Global Institute estimates that disruptive technologies could have an economic impact of up to $US 33 trillion by 2025. In order to profit from the resulting benefits, especially service providers are asked to meet the growing challenges with intelligent, tailor-made solutions. “There will be great opportunities for companies to provide solutions to customers linked to global megatrends such as the demographic change and urbanization, the rise of the individual, climate change and the natural resources scarcity”, underlines Frank Vorrath, VP Global Supply Chain at Johnson Controls, in a panel discussion on the role of service partners. “The Arvato Masterclass event provided some great insights into how technology will disrupt and drive change in an even faster and more exponential way.”

About Arvato Supply Chain Masterclass
The Masterclass is an innovative thought leadership series of events hosted annually by Arvato SCM’s business unit Hightech & Entertainment. Focused on Supply Chain innovation, guests are invited to network and discuss challenges, merging trends and success stories in an open and constructive forum. Previous events covered topics ranging from digitalization to disruptive technologies. In the coming months we will prepare for the third series. Should you wish to declare your interest in the upcoming Masterclass 2017, please click here.