Autonomous Supply Chain: Desirable Vision or Silly Daydream?

Stephen DeAngelis

June 20, 2019

Nelson Mandela once stated, “Vision without action is just a dream, action without vision just passes the time, vision with action can change the world.” Occasionally, I read articles about autonomous or no-touch supply chains and I find myself wondering whether the autonomous supply chain is a vision or so far-fetched it’s only a silly daydream. Or is it something else? I’m not surprised someone came up with the concept. Ravi Prakash Mathur (@rpmathur), Senior Director of Supply Chain Management and Head of Logistics and Central Planning at Dr. Reddy’s Laboratories Ltd., notes, “Technologies once imagined only on the movie screen now bring convenience and value to our daily lives. Some examples include gestural interfaces, machine-aided purchases, facial recognition, autonomous cars, miniature drones, ubiquitous advertising, and electronic surveillance. Machines are now making predictions on trading stocks, customer purchases, traffic flows, and crime — much as we saw in the 2002 movie ‘Minority Report’.”[1] When today’s technological wonders are looked at holistically, it was only a matter of time before someone imagined a fully automated supply chain. Mathur believes the first step towards a fully automated supply chain is an intelligent supply chain powered by artificial intelligence (AI). He explains, “The algorithmic supply chain requires organizational maturity and cultural readiness to embed and regularly rely on systems. The concept of an intelligent supply chain goes a step further by incorporating self-learning capabilities of the machine to make better supply-chain decisions.”

The case for the autonomous supply chain

The basic argument favoring the no-touch or autonomous supply chain is that current technology trends logically lead in that direction. For example, analysts at River Logic write, “The concept of autonomously delivering products is slowly starting to become a reality. While there are many hurdles to overcome before the point is reached where there’s no human intervention in the supply chain, there are many industrial examples that indicate it’s feasible and practical.”[2] They go on describe what, in their minds, constitutes an autonomous supply chain:

“An autonomous supply chain should have the capability to process a request to fetch a component from its location and to autonomously deliver this component to a specified delivery point, all without human intervention. Key elements of such a system include the ability to:

  • Interpret the request
  • Find the part’s location
  • Load the part onto a transportation system
  • Identify the delivery point
  • Transport to the delivery point
  • Off load the part
  • Provide feedback to the supply system

If all steps are automated and do not require human intervention, then the supply system could be regarded as autonomous.”

Martin Barkman, a Senior Vice President at SAP, and Markus Rosemann, a Global SAP Vice President, believe an autonomous (touchless) supply chain will become a necessity to please increasingly demanding consumers. They explain, “You typically ignore electricity in your house — until it goes out, of course. That’s because it’s touchless, meaning it runs on its own. Imagine managing a touchless supply chain — one where your digital systems automate your planning and logistics processes and employees intervene only when absolutely necessary. Sounds impossible, right? It’s not. Innovative technologies, such as the Internet of Things (IoT) and machine learning, present opportunities for companies to create a touchless supply chain. And by optimizing planning and logistics through automation, businesses can focus on their ultimate goal: satisfying customers.”[3]

The case against the autonomous supply chain

You can almost sense the enthusiasm exuded by proponents of the autonomous supply chain. Futuristic thinking has a way engendering enthusiasm — sometimes irrational enthusiasm. Some pundits believe that’s what happening with this topic. For example, Martijn Lofvers (@lofvers), CEO of Supply Chain Magazine, points to supply chain planning as one area some subject matter experts believe is ripe for autonomy. He believes they’re wrong. He explains, “For no-touch and lights-out planning it will be necessary to create a so-called digital twin or virtual twin of the complete, end-to-end supply chain networks. The big problem is that it is simply impossible for companies to make a simulation model that sufficiently captures the complex reality. Most companies don’t even know all their Tier 2 suppliers. And the market conditions, political developments, customer buying behavior and competitors’ responses cannot be modeled accurately because companies will never have 100% of the planning data needed.”[4] Imagine the complexity of trying to design an entire autonomous supply chain, not just an autonomous planning system. River Logic analysts concede there is a high degree of complexity involved. They write, “In a real-life situation, an autonomous supply chain needs to be able to process thousands of requests, often in a very short period of time. It also has to have the ability to find different components and transport them automatically to multiple delivery points. From this definition, it’s clear there has to be a high degree of order and standardization. Additionally, the entire process needs to be supervised by sophisticated software incorporating a comprehensive database that knows the location of every part and delivery point. It has to be able to compute the best route to the delivery point and to avoid congestion.” Despite this complexity, they conclude, “Provided these conditions can be met, an autonomous supply chain is feasible.” This is unquestionably a big proviso.

Concluding thoughts

I’m not going to prognosticate about the future of the autonomous supply chain; although, I am certain it’s not going to happen in the near future. Some pundits believe it shouldn’t happen at all. John Santagate (@j_santagate), research director for the service robotics market at IDC, asserts, “Just because you can automate something doesn’t mean you should. There are aspects of supply chain that shouldn’t be automated. You can leverage technology to support things, but there are still humans required in decision making and in some processes.”[5] Personally, I believe humans should play an essential role in the supply chain, even if that role is management by exception as companies continue to push for increased automation. I’m also convinced Mathur is correct that, regardless of how far down the road companies journey towards a no-touch supply chain, supply chains will become more intelligent. Cognitive solutions, like the Enterra Supply Chain Intelligence System™, will augment human decision-making in ambiguous and anomalous situations. The pursuit of the autonomous supply chain requires actions, which makes it more than a dream, even if the vision is never fully realized.

Footnotes
[1] Ravi Prakash Mathur, “The Intelligent Supply Chain: A Use Case For Artificial Intelligence,” D!gitalist, 26 July 2017.
[2] Staff, “The Autonomous Supply Chain: Possible or Impossible?The Stream by River Logic, 30 September 2018.
[3] Martin Barkman and Markus Rosemann, “The Key To Customer Centricity: Creating A Touchless Supply Chain,” D!gitalist, 3 May 2018.
[4] Martijn Lofvers, “No-touch nonsense,” Supply Chain Movement, 15 November 2018.
[5] Craig Guillot, “Not everything in the supply chain should be automated,” Supply Chain Dive, 22 January 2019.