The proliferation of devices associated with the internet of things (IoT) is likely to significantly alter how the supply chain operates.
This is according to Gartner, and the body believes the explosion of intelligent devices will allow supply chains to assemble and communicate in new ways.
There will be a 30-fold increase in the number of such devices by 2020, which will dramatically affect supply chain leader information access and cyber-risk exposure.
Michael Burkett, managing vice president at Gartner, said IoT maturity should be put into perspective and supply chain strategists need to look at its potential now.
“Some IoT devices are more mature, such as commercial telematics now used in trucking fleets to improve logistics efficiency. Some, such as smart fabrics that use sensors within clothing and industrial fabrics to monitor human health or manufacturing processes, are just emerging,” he commented.
The market analyst anticipates that a double-digit increase in digital marketing investment will provide supply chain leaders with deeper market insight, as well as fulfillment challenges in industries where more granular market segments are targeted.
An increase in digital marketing budgets is expected this year, which will have direct supply-chain implications, affecting consumer product industries and B2B industries.
Marketers are segmenting audiences and using commerce sites to deliver relevant customer experiences. Increased fragmentation of demand is forecast to occur as digital marketing targets smaller market segments.
Mr Burkett said supply chain leaders must adapt their processes to the digital business world, fulfilling new customer expectations and the volatile demands of the digital marketplace.
A future supply chain will converge people, business and things in a digital value network, and incorporate emerging capabilities such as IoT and smart machines into this design strategy – which could present data management challenges.
Digital marketing customer information will be used by the supply chain team to refine its own segmentation efforts and to enhance demand planning.
The team will thus become market-driven by understanding channel programs and using this as an early indicator of demand.
Design and manufacturing of products is also expected to be affected by digital business during the next five years.