Recently the supply chain landscape has been flooded by a massive wave of new technologies and associated strategies, leaving practitioners with the daunting task of sorting out which ones are right for them.
To help ease that pain, Gartner Inc. recently released its "Hype Cycle for Supply Chain Strategy, 2017," which graphically shows where various technologies and technology-enabled strategies lie along the adoption curve. (To see the cycle and read an explanation of the methodology, see the associated sidebar, "Gartner's Hype Cycle explained.") In particular, the report highlights nine that it says will achieve mainstream adoption levels in five years or less:
1. Descriptive analytics is the application of analytics to describe what is happening or has happened. It includes such capabilities as reporting, dashboards, supply chain visibility, data visualization, and alerts. According to Gartner, many organizations report that descriptive analytics have already helped to significantly improve their operations. Indeed this is the only technology covered in the report that Gartner believes has matured enough that its applicability and relevance are well understood and the criteria for evaluating a vendor are clearly defined. Estimated time to mainstream adoption: less than two years
2. Centers of excellence (COEs) are centralized groups that focus on identifying, designing, developing, and implementing best practices across the business. Gartner's research indicates that 78 percent of supply chain organizations have one or more COEs. However, many of these COEs lack a coherent organizational structure, says Gartner, due to weak mandates, uncertain missions, and unclear governance and performance metrics. For this reason, Gartner does not believe that the practice is fully mature. However, as more organizations advance their expertise, Gartner expects the COE will develop further and be used more productively by more companies. Estimated time to mainstream adoption: within the next two years
3. Diagnostic analytics seek to explain why something—an event or a trend—happened. According to Gartner, to implement diagnostic analytics, a company needs to have already implemented descriptive analytics and have a clear understanding of all the relationships in its supply chain. As analytics in general improve and the availability of real-time data from technologies like the Internet of Things (IoT) increases, Gartner believes that more companies will implement diagnostic solutions. Estimated time to mainstream adoption: two to five years
4. Targeted supply chain segmentation involves techniques such as categorizing customers or suppliers as high priority or treating parts or inventory differently based on volume. While segmentation has been around as a concept for at least 10 years, a documented approach based on industry consensus will go a long way toward speeding up adoption. Estimated time to mainstream adoption: within the next five years.
5. Supply chain management business-process-as-a-service is an external service that delivers standardized processes through a cloud-sourced technology platform. Examples include compliance and regulatory reporting, freight forwarding, customs processing, and aftermarket services. These services allow companies to gain incremental capabilities and efficiencies without having to buy a new software license or hire new employees. Estimated time to mainstream adoption: two to five years.
6. Supply chain visibility involves generating timely, accurate, and complete views of plans, events, and data across the entire supply chain, including external partners. Many organizations currently lack an end-to-end approach to supply chain visibility, says Gartner. But the firm believes that such visibility will become more standard as more mature IoT technologies and analytics solutions become available. Estimated time to mainstream adoption: over the next two to five years
7. Big data technologies are used to analyze large datasets to reveal patterns, trends, or associations. According to Gartner, there is a now a "post-hype" realization that more data does not necessarily lead to better insights. Today, organizations are focusing on improving analytics and integration to get more out of their big data. Estimated time to mainstream adoption: another two to five years
8. Social learning platforms provide personal productively tools, Web 2.0 applications, content repositories, and data sources that can help employees learn and share knowledge. In the supply chain space, Gartner sees social learning platforms as one way to address the large number of long-term employees retiring. They allow companies to capture their knowledge and share it with younger workers in a way that can be scaled across multiple business units and geographies. Gartner recommends integrating social learning within the company's organization-wide information technology (IT) program. Estimated time to mainstream adoption: two to five years
9. Solution-centric supply chains offer customers a personalized collection of products, data, and services from a digitally enabled ecosystem of partners. It's an approach seen mainly in the high-tech, medical, consumer, and industrial sectors at the current time. Estimated time to mainstream adoption: five years
All of these strategies and technologies are indicative of a general trend toward the "digitalization" of the supply chains, says Noha Tohamy, Gartner's vice president of supply chain research.
"Looking further out than five years, we can expect even more exciting technologies coming over the horizon," said Tohamy. "We expect that artificial intelligence, machine learning, corporate social responsibility, and cost-to-serve analytics will all drive significant shifts in supply chain strategies within the next decade."
Gartner's Hype Cycle explained
Gartner Hype Cycles provide a graphic representation of the maturity and adoption level of upcoming technologies and applications. The cycle consists of five stages:
1. Innovation trigger: A potential technology breakthrough triggers early proof-of-concept stories and media interest. Often no usable products exist and commercial viability is unproven.
2. Peak of Inflated Expectations: The early publicity generates a number of success stories—which are often accompanied by scores of less-well-known failures. Some companies take action; many do not.
3. Trough of Disillusionment: Interest in the technology wanes as experiments and implementations fail to deliver. Producers of the technology either merge or fail. Investments continue only if the surviving providers improve their products to the satisfaction of early adopters.
4. Slope of Enlightenment: More instances of how the technology can benefit the enterprise start to crystallize and become more widely understood. Second- and third-generation products appear from technology providers. More enterprises fund pilots, but conservative companies remain cautious.
5. Plateau of Productivity: Mainstream adoption starts to take off. Criteria for assessing provider viability are more clearly defined. The technology's broad market applicability and relevance are now well known.
Companies in every sector are converting assets from fossil fuel to electric power in their push to reach net-zero energy targets and to reduce costs along the way, but to truly accelerate those efforts, they also need to improve electric energy efficiency, according to a study from technology consulting firm ABI Research.
In fact, boosting that efficiency could contribute fully 25% of the emissions reductions needed to reach net zero. And the pursuit of that goal will drive aggregated global investments in energy efficiency technologies to grow from $106 Billion in 2024 to $153 Billion in 2030, ABI said today in a report titled “The Role of Energy Efficiency in Reaching Net Zero Targets for Enterprises and Industries.”
ABI’s report divided the range of energy-efficiency-enhancing technologies and equipment into three industrial categories:
Commercial Buildings – Network Lighting Control (NLC) and occupancy sensing for automated lighting and heating; Artificial Intelligence (AI)-based energy management; heat-pumps and energy-efficient HVAC equipment; insulation technologies
Manufacturing Plants – Energy digital twins, factory automation, manufacturing process design and optimization software (PLM, MES, simulation); Electric Arc Furnaces (EAFs); energy efficient electric motors (compressors, fans, pumps)
“Both the International Energy Agency (IEA) and the United Nations Climate Change Conference (COP) continue to insist on the importance of energy efficiency,” Dominique Bonte, VP of End Markets and Verticals at ABI Research, said in a release. “At COP 29 in Dubai, it was agreed to commit to collectively double the global average annual rate of energy efficiency improvements from around 2% to over 4% every year until 2030, following recommendations from the IEA. This complements the EU’s Energy Efficiency First (EE1) Framework and the U.S. 2022 Inflation Reduction Act in which US$86 billion was earmarked for energy efficiency actions.”
Economic activity in the logistics industry expanded in November, continuing a steady growth pattern that began earlier this year and signaling a return to seasonality after several years of fluctuating conditions, according to the latest Logistics Managers’ Index report (LMI), released today.
The November LMI registered 58.4, down slightly from October’s reading of 58.9, which was the highest level in two years. The LMI is a monthly gauge of business conditions across warehousing and logistics markets; a reading above 50 indicates growth and a reading below 50 indicates contraction.
“The overall index has been very consistent in the past three months, with readings of 58.6, 58.9, and 58.4,” LMI analyst Zac Rogers, associate professor of supply chain management at Colorado State University, wrote in the November LMI report. “This plateau is slightly higher than a similar plateau of consistency earlier in the year when May to August saw four readings between 55.3 and 56.4. Seasonally speaking, it is consistent that this later year run of readings would be the highest all year.”
Separately, Rogers said the end-of-year growth reflects the return to a healthy holiday peak, which started when inventory levels expanded in late summer and early fall as retailers began stocking up to meet consumer demand. Pandemic-driven shifts in consumer buying behavior, inflation, and economic uncertainty contributed to volatile peak season conditions over the past four years, with the LMI swinging from record-high growth in late 2020 and 2021 to slower growth in 2022 and contraction in 2023.
“The LMI contracted at this time a year ago, so basically [there was] no peak season,” Rogers said, citing inflation as a drag on demand. “To have a normal November … [really] for the first time in five years, justifies what we’ve seen all these companies doing—building up inventory in a sustainable, seasonal way.
“Based on what we’re seeing, a lot of supply chains called it right and were ready for healthy holiday season, so far.”
The LMI has remained in the mid to high 50s range since January—with the exception of April, when the index dipped to 52.9—signaling strong and consistent demand for warehousing and transportation services.
The LMI is a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
"After several years of mitigating inflation, disruption, supply shocks, conflicts, and uncertainty, we are currently in a relative period of calm," John Paitek, vice president, GEP, said in a release. "But it is very much the calm before the coming storm. This report provides procurement and supply chain leaders with a prescriptive guide to weathering the gale force headwinds of protectionism, tariffs, trade wars, regulatory pressures, uncertainty, and the AI revolution that we will face in 2025."
A report from the company released today offers predictions and strategies for the upcoming year, organized into six major predictions in GEP’s “Outlook 2025: Procurement & Supply Chain.”
Advanced AI agents will play a key role in demand forecasting, risk monitoring, and supply chain optimization, shifting procurement's mandate from tactical to strategic. Companies should invest in the technology now to to streamline processes and enhance decision-making.
Expanded value metrics will drive decisions, as success will be measured by resilience, sustainability, and compliance… not just cost efficiency. Companies should communicate value beyond cost savings to stakeholders, and develop new KPIs.
Increasing regulatory demands will necessitate heightened supply chain transparency and accountability. So companies should strengthen supplier audits, adopt ESG tracking tools, and integrate compliance into strategic procurement decisions.
Widening tariffs and trade restrictions will force companies to reassess total cost of ownership (TCO) metrics to include geopolitical and environmental risks, as nearshoring and friendshoring attempt to balance resilience with cost.
Rising energy costs and regulatory demands will accelerate the shift to sustainable operations, pushing companies to invest in renewable energy and redesign supply chains to align with ESG commitments.
New tariffs could drive prices higher, just as inflation has come under control and interest rates are returning to near-zero levels. That means companies must continue to secure cost savings as their primary responsibility.
Specifically, 48% of respondents identified rising tariffs and trade barriers as their top concern, followed by supply chain disruptions at 45% and geopolitical instability at 41%. Moreover, tariffs and trade barriers ranked as the priority issue regardless of company size, as respondents at companies with less than 250 employees, 251-500, 501-1,000, 1,001-50,000 and 50,000+ employees all cited it as the most significant issue they are currently facing.
“Evolving tariffs and trade policies are one of a number of complex issues requiring organizations to build more resilience into their supply chains through compliance, technology and strategic planning,” Jackson Wood, Director, Industry Strategy at Descartes, said in a release. “With the potential for the incoming U.S. administration to impose new and additional tariffs on a wide variety of goods and countries of origin, U.S. importers may need to significantly re-engineer their sourcing strategies to mitigate potentially higher costs.”
Freight transportation providers and maritime port operators are bracing for rough business impacts if the incoming Trump Administration follows through on its pledge to impose a 25% tariff on Mexico and Canada and an additional 10% tariff on China, analysts say.
Industry contacts say they fear that such heavy fees could prompt importers to “pull forward” a massive surge of goods before the new administration is seated on January 20, and then quickly cut back again once the hefty new fees are instituted, according to a report from TD Cowen.
As a measure of the potential economic impact of that uncertain scenario, transport company stocks were mostly trading down yesterday following Donald Trump’s social media post on Monday night announcing the proposed new policy, TD Cowen said in a note to investors.
But an alternative impact of the tariff jump could be that it doesn’t happen at all, but is merely a threat intended to force other nations to the table to strike new deals on trade, immigration, or drug smuggling. “Trump is perfectly comfortable being a policy paradox and pushing competing policies (and people); this ‘chaos premium’ only increases his leverage in negotiations,” the firm said.
However, if that truly is the new administration’s strategy, it could backfire by sparking a tit-for-tat trade war that includes retaliatory tariffs by other countries on U.S. exports, other analysts said. “The additional tariffs on China that the incoming US administration plans to impose will add to restrictions on China-made products, driving up their prices and fueling an already-under-way surge in efforts to beat the tariffs by importing products before the inauguration,” Andrei Quinn-Barabanov, Senior Director – Supplier Risk Management solutions at Moody’s, said in a statement. “The Mexico and Canada tariffs may be an invitation to negotiations with the U.S. on immigration and other issues. If implemented, they would also be challenging to maintain, because the two nations can threaten the U.S. with significant retaliation and because of a likely pressure from the American business community that would be greatly affected by the costs and supply chain obstacles resulting from the tariffs.”
New tariffs could also damage sensitive supply chains by triggering unintended consequences, according to a report by Matt Lekstutis, Director at Efficio, a global procurement and supply chain procurement consultancy. “While ultimate tariff policy will likely be implemented to achieve specific US re-industrialization and other political objectives, the responses of various nations, companies and trading partners is not easily predicted and companies that even have little or no exposure to Mexico, China or Canada could be impacted. New tariffs may disrupt supply chains dependent on just in time deliveries as they adjust to new trade flows. This could affect all industries dependent on distribution and logistics providers and result in supply shortages,” Lekstutis said.