AG (Frankfurt TecDAX: SOW) today announced that it’s top ten
predictions for the manufacturing and supply chain industry in 2016 have
proved remarkably accurate. From the strength of the Internet of Things
to an explosion in automation and a severe shortage of operations
talent, the predictions indicated the industry would reach a tipping
point in 2016.
Sean Riley, Director of Industry Solutions - Manufacturing, Software AG,
observed: “The Internet of Things and digital technology will continue
to take center stage due to the increasing need for demand
responsiveness and ever-faster execution.” He further noted the
following five critical trends that manufacturers need to embrace in
order to achieve success in 2017.
By 2020, 90 percent of Supply Chain Execution Systems expenditure will
be for Cloud-based applications, while Supply Chain Planning
applications will remain on-premise, according to Gartner. Additionally,
new technologies will appear such as blockchain for gross weight
verification, the Internet of Things (IoT) and advanced (predictive)
analytics for condition analysis and prediction. Moreover, Digital
Transformation will become a key focus to capitalize on the
available value of these technologies in the supply chain.
Short-term forecasting will all but disappear due to ‘Demand Sensing’
and robust supply chain visibility. However, this will not occur for
manufacturers that do not have a supply chain resiliency program in
Do Not Disrupt
Manufacturers will begin in earnest to pursue a resilient supply chain
as disruptions, such as the Hanjin
Shipping issue, will have a much larger effect on supply chains
pressed for spare capacity and inventory. A resilient supply chain
becomes critical thus identifying, managing and mitigating external and
internal supply chain risks will become paramount.
Smaller is Better
Manufacturers, taking note of Amazon’s logistics network, will begin
examining the feasibility of using a Micro-Logistics network in 2017.
Much of this depends upon the ability to work with third party logistics
providers (3PL’s) and shift from a dedicated- to a shared-facility
supply chain model, but the benefits of the Micro-Logistics model cannot
Shrinkage may Occur
Trans-ocean container shipping, third party distribution services and
‘Over the Road Carrier Services’ (trucks) will consolidate due to either
financial difficulties or the need for strategic capacity. The
consolidation will result in contract rationalization, rate fluctuations
and will create a lever for 3PL agreements to be more value- than
price-focused. This will require manufacturers to examine their current
agreements and re-evaluate their current supply chain network with
preparations beginning in 2017.
According to Sean Riley, “2017 promises to be a year when supply chain
practitioners must become technologically fluent in order to meet their
business goals due to the opportunities available and the upcoming
business environment changes. These changes will be driven by
manufacturers having to be as nimble and agile as their smaller
About Software AG
The digital transformation is changing enterprise IT landscapes from
inflexible application silos to modern software platform-driven IT
architectures which deliver the openness, speed and agility needed to
enable the digital real-time enterprise.
Software AG offers the first end-to-end Digital Business Platform, based
on open standards, with integration, process management, in-memory data,
adaptive application development, real-time analytics and enterprise
architecture management as core building blocks. The modular platform
allows users to develop the next generation of application systems to
build their digital future, today.
With over 45 years of customer-centric innovation, Software AG is ranked
as a leader in many innovative and digital technology categories.
Software AG has more than 4,300 employees, is active in 70 countries and
had revenues of €873 million in 2015.
Learn more at www.softwareag.com.
Software AG, 11700 Plaza America Drive, Reston, VA, 20190
Detailed press information about Software AG including a picture and
multimedia database are available under: www.softwareag.com/press
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