A new term to describe a supply chain that is all-seeing, real-time, productive, optimized, and cognitive has recently emerged. The “sentient supply chain” refers to a supply chain that’s nodes communicate 24/7.
This supply chain has been compared to a network of autonomous vehicles by SC professionals. Autonomous vehicles are designed to analyze infinite amounts of real-time data flawlessly while operating. Part of their appeal is also the promise of reduced accidents and more efficiency on the roads. If the world were only comprised of self-driving vehicles, all cars would be communicating with each other in real-time, all the time.
A system of these sentient vehicles wouldn’t just analyze data about risks and actions within its own area, but also in their immediate vicinity. They’d take in the larger view to optimize a route, and this includes looking ahead in time.
If all of these gains were applied to an organization’s supply chain, think of how unstoppable it would be.
Supply chain leaders have spent their life’s work trying to facilitate communication between each node of the supply chain in order to better manage it. Of course, the systems they’ve created have driven value and changed the supply chain for the better, but there is still much room for improvement.
The rise of the omni-channel has pushed businesses’ supply chains to great new limits. Now, more than ever, companies need them to perform like highly intelligent, orchestrated, optimized autonomous systems, like that of self-driving vehicles. Modern supply chains need to be predictive and prescriptive in order to survive in this market.
Traditionalists favor the reactive supply chain. That is, a supply chain where variability is +/- 5 days, service level is 95%, and buffer stock requirements are 10 days.
Innovators stand behind the live supply chain, where variability is +/- 48 hours, service level is 98%, and buffer stock requirements are 5 days.
However, futurists are fully committed to the predictive supply chain. Its variability is the lowest of the three, at +/- 2 hours, so is its service level, at 99.5%, and so is its buffer stock requirement, at 2 days.
When conveyances, suppliers, warehouses, manufacturing facilities, and stores all understand what each other is doing in real-time, what they plan to do and when, what external factors are like, and they have an advanced algorithm-learning machine, you have a sentient supply chain.
You’ve read the word “automation” many times now, but know this: the sentient supply chain does not mean that all actions will be 100% automated. It will still require strict determination of which decisions can be machine-made and which need to be left to the supply chain professionals.
The value of this futuristic business process is in its ability to quickly analyze massive amounts of data in real-time, and to apply advanced algorithms to that data in order to produce wildly intelligent insights. Within the complex global supply chain, humans simply cannot do this.
Sentient supply chains can track the real-time movement of ocean shipments, trucks, n-tier suppliers, even consumer behavior, and more. Though it is early in adoption, its capabilities are undeniable, and futurist supply chain professionals believe it will take the world by storm soon.