Technology is a vital “muscle” for companies to thrive and create value amidst constant disruptions. It bears reflecting on what this means from an engineering standpoint for key industries as we move forward. In 2020, businesses rushed to transform their businesses digitally. With necessary infrastructure in place, it’s now time for businesses to level up and focus on how they can gain ROI from their digital investments. It’s not going to be a fundamental change, rather incremental changes that will enable businesses to gain ground on competition.
Based on my observations in the technology world, I foresee the following four trends impacting various industries:
Digital commerce will become a lot more fun
According to research by eMarketer and Statista, Ecommerce will make up 22 per cent of global retail sales by 2023. It’s a great opportunity for this sector provided they reduce losses due to excess cost of free shipping, order preparation and last-mile delivery.
The biggest cost contributor to any e-commerce P&L is fulfilment. Typically, replenishment models focused on historical sales, preventing retail supply chains from responding with speed when crisis hit. Mastering inventory and forecasting with data and AI can enable retailers to gain back 20 per cent on total cost of order. Newer models can capture a broader set of inputs and use machine learning to sense demand earlier, while enabling creative ways to meet customer needs. Digital IT costs is another area where there is opportunity to gain 30 per cent cost savings. It’s important to review IT operations with a profitability lens and ensure customers gain tangible benefits and higher returns from their investments.
Additionally, using AI and ML will allow retailers to identify items experiencing a high rate of returns and why – for a perspective, it can take up to 30 days before returned products make their way back to inventory. We know that sizing issues are the largest contributor to apparel returns. By cross referencing returned and non-returned items, retailers can make adjustments, such as improving product description, adding a sizing guide or upgrading the imagery.
Optimising and building resilience in supply chains
As we approach 2023, leaders must invest in continuing to make supply chains dynamic, flexible and responsive. Accomplishing this goal will require businesses to drive transformation across the following areas –
•A single sourcing supply chain strategy no longer works: We foresee see a shift where no one wants to risk all their eggs in one basket with a single source model. A multi sourcing strategy will enable businesses to be more dynamic, combat greater complexity and prepare for rapid demand shifts.
•Demand planning and forecasting: Improving accuracy in demand planning, will continue to be a focus moving forward. Be it special days, dynamic pricing, or gaining locational intelligence, data-enabled tools and technologies can provide insights at a granular level to formulate decisions. In fact, one of our clients reduced forecasting processing time from days to hours, by leveraging data through our platform-driven forecasting solutions.
•Multi-channel fulfillment: Ensuring the goods reach their destination has gotten more complicated over time. For a perspective, leading US retailers are now considering setting up warehouses in the east coast in addition to the west coast, to protect themselves against costs of future delays. This is just one instance of how large businesses with global operations are trying to simplify the logistics process.
In each of the areas outlined above, there is a common pattern – the underlying processes and systems need to be dynamic and most importantly, the need to gain an integrated view across the supply chain. Most systems currently in use lack the elasticity necessary to support these strategies. Few have visibility beyond direct suppliers, traditional routes and even ports. This is where, an asynchronous and event based microservices architecture will be a game changer. Timely visibility across the supply chain will allow businesses to optimize and make their supply chains more dynamic and resilient.
5G to up the game for businesses more than consumers
5G has potential to spark the next industrial revolution of wireless connectivity with wire-like stability and transform the world as we know. While it can enable downloading an HD movie from a crowded location in seconds, its advantages for B2B and B2C businesses will far exceed than just enabling speed. 5G is really about connecting everything, everywhere, all at once, with reliability and minus the lag. What this will enable is the ability to measure, understand and manage things in real time in a way that is unimaginable in the current landscape.
5G will allow you to receive high fidelity data in large volumes in real time, which will present a number of opportunities. To put things in perspective, Ericsson conducted an exercise on 5G by using a dummy patient to demonstrate how a surgeon could use a VR headset and special glove to control a robot arm that would perform an actual operation in another location. For AR/VR to truly take shape, a lot will depend on how data that can be transmitted and processed in real time – something that 5G has potential to disrupt.
The automotive industry is another area that is set to be transformed by 5G. More vehicles will be able to connect to the internet at once – thanks to the greater capacity and decreased latency of 5G networks, resulting in smarter transportation systems with less congestion and higher levels of safety.
Seizing the energy sustainability movement
The recent power crises gripping Europe is a stark reminder of the impact of climate change, inflation and geopolitical tension. At a high level, overcoming the crises will call for a transformation in the way power is generated, distributed, consumed and stored at the edge of the grid – especially in large industrial complexes.
Consider the following scenarios – power generation is dynamic, and so is the demand. In times of high summers and winters, the consumption goes up. At the same time, in large industrial complexes, not all sections are operating at all times. But there is little opportunity to conserve this power unless it’s shut down manually. Clearly, there is a certain dynamic element missing in power management.
The need of the hour is to bring in more agility and intelligence across the entire ecosystem of power generation, distribution, and consumption. From a technology perspective this translates to flexible and interoperable systems with enhanced computerisation, secure connectivity and power storage.
Capturing necessary data from all sources will also be crucial in gaining a single view of information across all grid operations. Using advanced data and analytics on this data will enable users to bring in accuracy in the way they forecast availability and demand, which will further allow them to manage planned and unplanned outages, weather variations, avoid wastage and most importantly, reduce their carbon footprint over time.
There will undoubtedly be winners and losers in the months ahead, but those that thrive will do so by striking the right balance between short-term business goals and long-term innovation. For all the magic and excitement of emerging technologies, businesses must remember to focus on end consumers and understand opportunities to make a positive difference in their lives, and at the same time be conscious of their responsibilities to the planet and to the society in which we live.
Disclaimer: The views expressed in the article above are those of the authors’ and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.