The Rise of the Supply Network, the End of Silos

We recently came across a report from 2016 that confirms what Cin7 has said for a while. Technology is rapidly turning the supply chain into the supply network.

A supply chain is the steps a product takes to move from its fabrication to the customer. Information moves from one link in the chain to the next. The retailer might not know about a potential delay until a late order from a wholesaler. A customer might grow impatient and go to the next retailer.

In the budding supply network world, suppliers, wholesalers, warehouses, retailers, and customers are omniscient. A retailer would hypothetically react to a manufacturing delay by transferring inventory from one branch to another. A 3PL might step in to fulfill the order more quickly. All parts of the network cold use that information to hone processes.

A retailer would hypothetically react to a manufacturing delay by transferring inventory from one branch to another. A 3PL might step in to fulfill the order more quickly. All parts of the network cold use that information to hone processes.

There isn’t that level of transparency yet. But the transition is happening. Digital technology has already begun tearing down the silos.

Accelerating to Supply Networks

The road to supply networks is paved with technology investment.

The report cited above places Industry 4.0 in a timeline stretching back to 1800 at the rise of mechanical production.

Industry 2.0 came 100 years later with mass production, electricity, assembly lines. Advanced automation, electronics, and information technology marked the rise of Industry 3.0 in the 1970s.

The report marks 4.0’s dawning in 2015, characterized by big data analytics, smart manufacturing, and of course, the digital supply chain.

The next step will ostensibly come about in 2030, spawned by continued exponential growth of technology and its adoption by industry. It’s a fair call, considering the current investment in supply chain digitization, and its benefits.

Supply Chain Dive recently cited a study indicating that 72% of 2,000 surveyed companies expect to fully digitize their supply chains within five years. That is expected to produce 4.1% annual growth, and a 2.9% revenue increase each year.

And while the digitized supply chain hasn’t arrived in full-effect, the silos are already coming down. The cloud has made it possible for companies to have complete visibility and control of much of their once-segmented supply chain with integration.

They can coordinate their inventory across suppliers, multiple sales channels, warehouses and 3PL providers, all the way to their cash register. This, in turn, increases sales opportunities and decreases the need for excess inventory

Read more about the possibilities of growing your business with an inventory management solution that connects to every part of your budding supply network.