It's easy to dismiss Pokemon Go as an online fad without application to business. But it's really the start of the augmented reality trend, which is set to shake up every industry and has particular application for distribution and supply chains.
Augmented reality is one of the most important emerging technology trends. It involves overlaying a computer-generated image on a view of the real world. In a distribution context, it will allow a more accurate picture of the supply chain and its components. It will also mean more accurate modelling can be done of the distribution system.
A good way to think about how augmented reality will transform the supply chain is to apply the way ridesharing service Uber allows users to view where a driver is on a map to a business context.
As soon as a ride is booked, users can follow the car from its departure point to its destination. A more advanced version of this technology, drawing on these augmented reality tools, will soon help power optimised supply chains, allowing businesses to view all the supply chain's moving parts, giving them the ability to know exactly where their goods are in real time.
Augmented reality is only one of the emerging technologies that will underpin the supply chain of the future. Other new practices such as radio frequency identification (RFID), which uses minuscule computer chips to track items, are also critical.
"RFID is not just about telling you where something is or where it's been," says Mike Lorge, managing director at Sage Business Solutions.
"Aside from tracking an item, it can also record how fast it's moving on a particular route and even monitor temperature. For instance, customers can monitor whether a delivery vehicle has exceeded a certain temperature level for food safety reasons."
Another tool that will transform the supply chain of the future is additive manufacturing, which is the industrial application of 3D printing. It allows layers of different materials to be added together to create a finished product.
It means businesses can create a highly customised product to industrial standards, often in small lots, to ensure customers are receiving exactly the product their require, reducing wasted stock.
The ultimate benefit of these technologies is better inventory management, which means improved profits down the track. "The supply chain revolves around inventory; having the right stock in the right place at the right time is fundamental," Lorge said.
"Sage Business Solutions research suggests that organisations using our inventory optimisation software can achieve a 20 to 25 per cent reduction in inventory. So if your company has $5 million in inventory, that's a $1.25 million saving."
At the same time as reducing inventory, the supply chain of the future will vastly improve fulfilment rates. "Fulfilment rates increase by up to 95 per cent thanks to a reduction in how much stock you need to carry, and also carrying the right stock," Lorge said.
Organisations that understand how connected they need to be to the modern supply chain and build that capability into the way they run their businesses give themselves an advantage over their competitors. Something that cannot be ignored in an increasingly cut-throat and disrupted world.
