The smarter supply chain of the future

The aims of this paper is to show how supply chains can become a lot smarter to deal effectively with risk and meet business objectives.

For this Global Chief Supply Chain Officer Study, IBM group leaders interviewed 400 senior executives from North America, Western Europe, and the Asia Pacific region who are responsible for their organizations' supply‐chain strategies and operations.

Findings in five key areas summarize the state of supply‐chain management today: cost containment; visibility, risk; customer intimacy; and globalization.

IBM sees a different kind of supply chain emerging – a smarter supply chain with three core characteristics: Instrumented – supply‐chain data previously created by people will increasingly be generated by sensors, RFID tags, meters, actuators, GPSs, and other devices and systems; Interconnected – smarter supply chains would take advantage of unprecedented levels of interaction that will facilitate collaboration on a massive scale; and Intelligent – to assist executives in evaluating trade‐offs, intelligent systems will assess myriad constraints and alternatives, allowing decision makers to simulate various courses of action.

Smarter supply chains would have the analytic capability to evaluate myriad alternatives in terms of supply, manufacturing, and distribution – and the flexibility to reconfigure flows as conditions change. Executives could then plan for contingencies and execute them.