Hype Cycle for Supply Chain Execution Technologies, 2020
Published: 7 July 2020 ID: G00441523
Analyst(s): Dwight Klappich
Supply chain leaders should use this Hype Cycle to understand the maturity, viability and riskiness of various emerging supply chain execution technologies. This will help them understand how these technologies will evolve and how they could help benefit their operations now and in the future.
Table of Contents
Analysis...... 3 What You Need to Know...... 3 The Hype Cycle...... 3 The Priority Matrix...... 5 Off the Hype Cycle...... 7 On the Rise...... 7 Digital Twins in Warehousing...... 7 Autonomous Trucks...... 8 5G for Manufacturing Operations...... 10 Warehouse Labor Forecasting...... 11 Transportation Forecasting...... 12 Warehouse Execution Systems...... 14 Supply Chain as a Service...... 16 At the Peak...... 18 Light Cargo Delivery Drones...... 18 IoT-Enabled Applications...... 20 Warehouse Picking (Humanoid) Robots...... 22 Digitized Freight Networks (Road)...... 24 Blockchain in Logistics and Transportation...... 25 Blockchain in Supply Chain...... 27
This research note is restricted to the personal use of [email protected]. Immersive Experience in Logistics...... 29 Web-Based Logistics Portals...... 30 Warehouse Resource Planning and Scheduling...... 31 Autonomous Mobile Robots...... 33 Sliding Into the Trough...... 34 Predictive Analytics in Supply Chain Execution...... 34 Returns Management...... 36 Anti-Counterfeiting Technology...... 37 Real-Time Transportation Visibility Platforms...... 39 Serialization...... 41 Warehouse Simulation and Modeling...... 42 Last-Mile Delivery Solutions...... 44 Supply Chain Convergence...... 45 Ring Scanner...... 47 Climbing the Slope...... 48 Warehouse Control Systems...... 48 Global Logistics Visibility...... 49 Indoor Location for Assets...... 51 Carrier/Supplier Appointment Scheduling...... 53 Appendixes...... 54 Hype Cycle Phases, Benefit Ratings and Maturity Levels...... 55 Gartner Recommended Reading...... 56
List of Tables
Table 1. Hype Cycle Phases...... 55 Table 2. Benefit Ratings...... 55 Table 3. Maturity Levels...... 56
List of Figures
Figure 1. Hype Cycle for Supply Chain Execution Technologies, 2020...... 4 Figure 2. Priority Matrix for Supply Chain Execution Technologies, 2020...... 6 Figure 3. Hype Cycle for Supply Chain Execution Technologies, 2019...... 54
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This research note is restricted to the personal use of [email protected]. Analysis
What You Need to Know This 2020 Hype Cycle for supply chain execution technologies covers technologies used to support logistics and fulfillment processes (for example, warehousing, transportation and global logistics). The positioning of specific technologies on this Hype Cycle considers these technologies in the aggregate across various industries and geographies, but there can be notable differences in maturity, market penetration and projected demand across these dimensions. When considering new supply chain execution (SCE) initiatives and investments, users should align their risk tolerance to the positioning of various technologies in this research. Some SCE technologies are lower risk, quite mature, and have either reached or are nearing the Plateau of Productivity on the right side of the Hype Cycle. However, innovation continues, and there are numerous emerging and valuable technologies on the left side of the Hype Cycle, although these are best-suited to more risk-tolerant organizations.
The Hype Cycle Supply chain organizational risk culture has a significant influence on how users view the placement of technologies across this Hype Cycle. Gartner’s 2019 Supply Chain Technology User Wants and Needs survey found that only 22% of respondents say their supply chain organizations are highly risk-tolerant and seek to exploit risk for competitive advantage by investing in early-stage technologies. These companies will gravitate to the left side of the Hype Cycle. However, of the 350 study respondents, 48% identified as risk-intolerant and will rightfully focus on more mature and proven technologies covered on the right side of this Hype Cycle. The good news is that supply chain technology maturity continues to improve with 44% of companies now at Stage 3 supply chain technology maturity. These organizations are taking advantage of improving technologies to support end-to-end processes, improved data rationalization and process integration capability. Even better news is that a quarter of respondents say they have now reached Stage 4/5 supply chain technology maturity, which is an improvement. Finally, the study found that supply chain organizations are shifting their investment focus from technologies deployed to simply run the business (36%) to now 64% of investment going to growing the business (33%) and transforming the business (31%).
Some macro trends driving innovation in SCE are:
■ Extension and enhancement of existing application suites — Logistics application suites continue to mature and evolve. Although warehouse management systems (WMS) and transportation managements systems (TMS) suites have evolved off the Hype Cycle, innovation continues with value-adding components offered by both specialist vendors and as add-on components to suites. Capabilities like digital twins in warehousing, 5G, digital freight networks and last-mile delivery solutions enhance the core suites.
■ Agility — Even before the COVID-19 pandemic, logistics organizations were under growing pressure to be able to continuously and rapidly adapt to changes in a highly volatile and chaotic world where operating complexities are expanding exponentially. Many companies were
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This research note is restricted to the personal use of [email protected]. struggling to adapt to the new realities, but COVID-19 was the spark that lit the fire that is driving companies to move quickly, and investment in technology is a core way they intend to respond.
Several technologies were added in 2020:
■ Digital twins in warehousing
■ Autonomous trucks
■ 5G in manufacturing
■ Light cargo delivery drones
■ Digitized freight networks (road)
■ Last-mile delivery solutions
■ Ring scanner
Figure 1. Hype Cycle for Supply Chain Execution Technologies, 2020
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This research note is restricted to the personal use of [email protected]. The Priority Matrix Risk-averse logistics and IT operations should focus on the technologies outlined in the left two columns of the Priority Matrix for supply chain execution technologies to identify those technologies that are suitably mature and proven. The upper half rows highlight technologies that will have maximum impact on the industry, based on the level of benefit (transformational or high benefit). Some technologies offering transformational benefits (such as transportation and labor forecasting) or high-benefit propositions (such as warehouse resource planning and scheduling) are emerging technologies, with 10 or more years to maturity. They are evolving rapidly and have moderate risk, so sophisticated logistics organizations should consider them, even if they are somewhat risk- averse. Several technologies, such as predictive analytics or autonomous mobile robots, show a time to plateau of five to 10 years, but this shouldn’t be viewed as an indication that these technologies are immature. These technologies are mature and have many viable providers, but the high budget outlay and entrenched legacy systems mean it will take several years for these new technologies to replace legacy systems, despite the strong business case for them. In addition, these solutions continue to evolve and expand, which is extending their time to plateau.
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This research note is restricted to the personal use of [email protected]. Figure 2. Priority Matrix for Supply Chain Execution Technologies, 2020
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This research note is restricted to the personal use of [email protected]. Off the Hype Cycle Several innovation profiles were removed from this year’s SCE Hype Cycle because these have progressed beyond the Plateau of Productivity, changed name or were retired due to factors outlined below:
■ Slotting Optimization — This technology remains important and demand remains strong, but it is largely a mature technology and has moved off the Hype Cycle.
■ Mobile Technology — Use of mobile devices in warehousing and transportation is very mature and, in certain cases like warehouse management, ubiquitous. The focus is more around the solutions than the physical devices and, as vendors have made their user interfaces responsive, this has further contributed to the maturing of the technology.
■ Dock Scheduling — This is a mature technology for the most basic capabilities and is most often delivered as part of a WMS suite, so it has moved off the Hype Cycle. There was a past belief that new, more advanced and functionally robust dock scheduling solutions would emerge and there could be a market for stand-alone systems, but this has not materialized except for a small number of vendors like C3 and Transportation Warehouse Optimization (TWO).
■ Real-Time Dynamic Route Optimization — This was replaced by last-mile delivery solutions.
■ Track and Trace Serialization — This was changed to serialization to narrow the focus. Previously, it was too broad and consisted of multiple technologies, so having a single dot was not reasonable.
On the Rise
Digital Twins in Warehousing Analysis By: Dwight Klappich
Definition: Digital twins (DT) are virtual representations of things, people, places or processes. In warehousing, a digital twin virtually replicates entities that support fulfillment processes.
Position and Adoption Speed Justification: Gartner research finds that supply chain and particularly warehousing users do not see DT as something separate and distinct from the solutions they own and operate today. They are not yet convinced that buying something stand-alone is warranted. Over the next three to five years, we expect only the most mature supply chain organizations to have explicit warehousing DT strategies. Most warehousing organizations will continue to consume pseudo DT as part of WMS solutions. The most innovative vendors will lead the charge by branding some of their visual and process modeling capabilities as composite digital twin capabilities. However, these will often be integrated with underlying WMS and other systems which may also incorporate discrete digital twin capabilities (for example, asset optimization). While these will be more appealing and easier to absorb tools, they will not fundamentally change what already exists within many systems though in more coarse-grained way.
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This research note is restricted to the personal use of [email protected]. User Advice:
■ Warehouse users should begin to embrace the concepts of warehouse DT today, even though most of what they will use currently is not yet called DT. Because DT are “virtual representations of things, people, places or processes,” this will allow warehouse users to recognize and codify the value in virtually replicating warehouse entities that support their fulfillment processes.
■ Users should focus first on the most obvious digital twin use cases where they can virtually represent almost any physical entity associated with the warehouse, such as mapping the warehouse layout or modeling the blueprints of physical assets like lift trucks or robots.
■ Finally, in highly automated facilities, users should consider creating 3D virtual representations of all the material handling equipment in their warehouse with an eye to employing this to support simulation and virtual provisioning.
Business Impact: Warehouse are becoming increasingly complex and trying to visualize this complexity using data trapped in traditional tables and parameters is ineffective for representing this complexity. Companies can improve decision making and management of their warehouse assets by virtually replicating the physical and digital worlds. Warehouse DT can be employed to optimize the operation or use of physical objects in the warehouse. This includes but is not limited to monitoring the operation of a machine to improve operational efficiency or to predetermine when maintenance will be required to keep the asset up and running. As operations become increasingly automated it will be increasingly important to be able to visualize the warehouse and automation in 3D and then simulate processes using the 3D models. For traditional human-centric warehouses, the warehouse DT will help companies drive efficiencies and in more automated environments it will reduce the risks, costs and time and effort to buy, build and maintain automation.
Benefit Rating: High
Market Penetration: 1% to 5% of target audience
Maturity: Emerging
Sample Vendors: Emulate 3D (Demo3D); Optricity; Slot3D
Recommended Reading: “Innovation Insight for Digital Twins in Warehousing”
“What to Expect When You’re Expecting Digital Twins”
Autonomous Trucks Analysis By: Bart De Muynck
Definition: Autonomous trucks are commercial trucks that use a combination of lidar, radar, sensors and cameras as well as machine learning to drive autonomously, meaning without the assistance of a driver. There are several scenarios planned in which trucks can have drivers in the cabs while being autonomous. They can be fully autonomous vehicles without drivers or participate in truck platooning, where the lead vehicle has a driver and the following vehicles follow the lead truck fully autonomously.
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This research note is restricted to the personal use of [email protected]. Position and Adoption Speed Justification: The logistics industry sees autonomous trucks as an opportunity to improve safety and operational efficiencies. Autonomous trucks could also help lessen the challenges around shortage of drivers. Estimates for deploying autonomous trucks vary, with rollouts estimated to occur as quickly as three to five years in China. The U.S., by comparison, is closer to a decade away. In most cases, amending existing regulations will determine which regions adopt first.
User Advice: Although the current market for autonomous vehicles is quite limited, many companies with truck fleets should begin to look into autonomous vehicles to understand if, where and how this technology might impact their supply chains. Companies should look for parts of the world where regulations favor autonomous innovation, but today very few regions support this. Risk-tolerant companies should allocate a small, technically competent team to research and evaluate government regulations and emerging autonomous capabilities being added to current vehicles. Shippers should also talk to their third-party logistics providers to see how they are embracing autonomous vehicles. Some firms may want to partner with shippers initially to pilot the new capability while sharing some risks.
Business Impact: Autonomous driving technology is maturing rapidly but adoption will be constrained by other factors such as regulatory restrictions. Several successful pilots have shown the technology to be nearly ready for the open road. The trucking industry’s appetite to embrace autonomous vehicles is fueled by the belief that early adopters will gain market share and secure a more profitable operating model. However, despite having the potential for addressing industry’s most severe challenges, growth will be delayed by long-running and sometimes contentious regulatory debates and low public acceptance as well as due to economic factors such as the current COVID-19 crisis. Driver pay is one of the largest operating costs for fleets associated with a commercial truck. Safety regulations limit the amount of time a driver can operate behind the wheel. Together with the current driver shortage, autonomous trucks will provide additional capability on top of the current trucking capacity. Autonomous vehicles also reduce transit time substantially which affects the decreasing lead times customers put on orders and also reduces the need to have the inventory placed within close proximity to the end customer markets.
Autonomous trucks have already been used successfully in closed environments within vertical industries like mining and agriculture. They will be further tested on the road in the U.S., Europe and Asia/Pacific.
Benefit Rating: Transformational
Market Penetration: Less than 1% of target audience
Maturity: Emerging
Sample Vendors: Alphabet (Waymo); Daimler Group; Einride; Embark; Google; Peloton; Pronto; Tesla Semi; TuSimple; Volvo Trucks
Recommended Reading: “Momentum and Demand Build for Autonomous Trucking”
“Top 10 Strategic Technology Trends for 2020: Autonomous Things”
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This research note is restricted to the personal use of [email protected]. 5G for Manufacturing Operations Analysis By: Andrew Stevens; Simon Jacobson
Definition: 5G for manufacturing operations are tailored, next-generation mobile broadband and cellular standard data services. 5G delivers across a spectrum of 3 mm wave bands (low, mid and high frequency). 5G service capabilities for manufacturing will initially be provided through brand new targeted supply chain data and communications services available via communication service providers (CSPs), commonly referred to as telcos.
Position and Adoption Speed Justification: 5G for manufacturing operations is in the very early phases of evolution. The speed of CSPs’ ability to provide specific data services will be dependent on their prioritization and allocation of resources for managing both private/campus 5G networks and larger-scale mobile networks. Early cadence for accelerated adoption in manufacturing operations will be dependent on objective evaluation of 5G’s ability to empower and augment across a new spectrum of technology use case applications for manufacturing. These include network slicing, Internet of Things (IoT) with edge, edge computing and analytics, low-latency and mixed reality spectrum applications. Early piloting 5G in manufacturing has been observed across industries such as automotive and aerospace and engineering. Further momentum for discovery and broader applications in the manufacturing environment is expected to increase in parallel with global rollouts of 5G networks, ongoing country bandwidth auctions of networks spectrums and increases in successful early applications across manufacturing operations.
User Advice: Manufacturing operations leaders must objectively assess 5G’s potential to complement, enhance and upgrade existing services through new generations of data communications services. Early applications will favor process-intensive, hazardous and time- critical operations, given 5G’s ability to significantly increase data speed (projected to be least 10 times faster) and capacity. New generations of 5G data services offer manufacturing environments tools for increased data speed and capacity optimization, accelerated processing times and richer distribution, and visualization tools for real-time decision making. Manufacturing operations leaders should extend their strategic technology planning responsibilities to facilitate more direct working relationships with CSPs for collaboration and to sponsor immersion learning opportunities for CSP delegates to foster accelerated early value propositions. Manufacturing operations leaders (working in conjunction with CSPs) must map early use-case pilots and service propositions to the correct spectrum applicability. An example is high-frequency millimeter wave (mmWave) that will likely support new 5G applications, especially across critical processing streams systems that encounter heavy data traffic and require very low-latency responsiveness and agility low- to mid-frequency spectrums. They will support improved data mobilization, will enhance user experiences and will be best-positioned to meet the increasing capacity demand for mobile services. 5G has the potential to be transformational to manufacturing operations if planned and phased correctly across networks of devices, machines, systems and enterprise applications. 5G’s impact is both broad and ubiquitous for manufacturing operations domains. Collaboration and collective learning from within manufacturing will generate maximum benefits for applying 5G against minimum disruption to ensure business continuity. It will also serve to continually reinforce the supply chain 5G value service proposition.
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This research note is restricted to the personal use of [email protected]. Business Impact: Business criteria will be shaped through evolution of larger numbers of targeted use cases in manufacturing operations. These opportunities might include:
■ Predictive/preventive plant, machine and device maintenance — real-time data collection and analytics across distributed networks of devices, machines and service-based field assets.
■ Continuous quality automation/in-process perception artificial intelligence (AI). In addition, learning and feedback loops for process optimization, yield, capacity utilization and product development.
■ Next-generation agile self-learning and automated robotics networks.
■ Untethered virtualized operations panels, video feeds for remote management and processing synchronization across critical or hazardous processing phases.
■ Integration accelerator for data mining, real-time data capture and cleansing across disparate manufacturing networks for richer business information for decision making.
■ A new era of remote working and operations through reliability and integrity of data feeds — a migration to virtualized operations and transactions and new opportunities for e-learning and remote training through mixed reality, augmented reality (AR)/virtual reality (VR) applications.
■ Engineering collaboration/simulation of correlations between product designs and factory layouts leveraging 3D models, digital twin technology and mixed reality (AR and VR).
Benefit Rating: Transformational
Market Penetration: 1% to 5% of target audience
Maturity: Embryonic
Sample Vendors: AT&T; China Mobile; Ericsson; Korea Telecom; Nokia; SKF; Swisscom; Telia; ZTE
Recommended Reading: “The 2020 Strategic Supply Chain Technology Trends”
“Starting Now, Supply Chain Leaders Should Assess the Potential for 5G Mobile Communications Networks”
“Innovation Opportunities Will Be Enabled as 5G Evolves Through 2025”
“Top 10 Strategic Technology Trends for Manufacturing Industries: Smart Factory”
“What 5G Requirements Do Manufacturing Industries Have”
Warehouse Labor Forecasting Analysis By: Dwight Klappich
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This research note is restricted to the personal use of [email protected]. Definition: Warehouse labor forecasting is a specialized form of predictive analytics that uses qualitative and quantitative approaches to intelligently predict short-term, midterm and long-term warehouse labor demand in aggregate and by task, skill, process area and other factors.
Position and Adoption Speed Justification: Most warehouse operations currently use rudimentary spreadsheet-based models to roughly predict labor requirements into the future. Some organizations have tried to convert product demand forecasts into labor forecasts, but this approach has failed because the data models are not the same. Vendors are starting to apply general-purpose quantitative methods leveraging statistical and mathematical analysis but find that defining the proper data model is more difficult than first thought. Workforce and warehouse labor management system vendors have been focused on labor planning over the past few years but midterm to long-term forecasting remains nascent.
General-purpose human capital management authorities outline various methods for estimating labor needs. These include managerial judgment, work/time study techniques (also known as developing engineered standards), trend analysis, time series forecasting techniques, model-based simulation/analysis and, more recently, machine learning. Effective warehouse labor forecasting will likely combine several of these methods.
User Advice: Given the paucity of solutions, companies will have to be very flexible in their evaluations. Avoid defining rigid requirements unless you are willing to build a solution. There might not be anything even close to what you have thought of but there might be a solution that can still help and add value. Focus on vendors that have expertise in warehousing because the data model will be the gating factor, not the mathematical models that are ubiquitous in many cases.
Business Impact: Labor availability has supplanted labor cost as a key driver for looking at warehouse productivity tools. As labor availability constraints increase, the need for improved forecasting will explode.
Benefit Rating: High
Market Penetration: 1% to 5% of target audience
Maturity: Emerging
Sample Vendors: Blue Yonder; Easy Metrics; Manhattan Associates; TZA; West Monroe
Recommended Reading: “Warehousing and Fulfillment Vendor Guide”
Transportation Forecasting Analysis By: Bart De Muynck
Definition: Transportation forecasting solutions apply demand-sensing/forecasting techniques specifically aligned with transportation networks, hierarchies and planning constraints. Specialized transportation forecasting solutions offer robust, transportation-specific allocation methodologies that can translate customer, location and product demand into lane- and mode-specific shipping- demand projections.
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This research note is restricted to the personal use of [email protected]. Position and Adoption Speed Justification: Gartner research finds that shippers and carriers are shifting from a singular emphasis on cost reduction to better address efficiency and productivity, with a focus on the impact of transportation and logistics on company growth and profitability. Shippers are also looking for ways to tackle the capacity and rate flux experienced during disruptions in the transportation industry. Transportation is a significant cost to most shippers, yet transportation largely remains unplanned beyond the operational execution window, which is normally one to five days. Shippers continue to invest in operational transportation planning and optimization, and these solutions deliver cost reductions based on their ability to efficiently route and consolidate shipments and enforce least-cost carrier strategies. However, most companies plan only a couple of days into the future. This is because most transportation management systems (TMSs) require orders/shipments, and companies only have firm orders several days in advance of shipping, at best.
With continuous flux in capacity and rates, shippers struggle to understand their real capacity needs in the short to medium term. In times of tight capacity, carriers become more selective in what freight they want to handle. This demands that shippers be more effective in looking beyond the operational planning horizon to project their future transportation requirements on a lane-by-lane basis. The needed granularity of freight forecasts will vary over time. Near term — one month to a quarter out — companies will need specific lane-by-lane, carrier-by-carrier forecasts down to the day, while longer term — up to a year or more — less exhaustive information, but still lane-specific, will often suffice.
If done at all, most companies rely on spreadsheets to forward-plan freight, and there are many flaws in this approach. Most companies have instituted product forecasting systems, but product demand hierarchies (for example, SKU, product, product line and brand) do not align with transportation hierarchies, which might look like products, shipments, loads, modes, lanes, equipment and carriers.
Companies must be able to forecast future transportation requirements, so they can collaborate with carriers to plan and lock in capacity. Transportation forecasting will supplement — not replace — multimodal TMSs. Although transportation forecasting solutions must be designed to address the specific and unique needs of transportation, the processes will be similar to the process used in product supply chain planning. Consequently, supply chain planning processes need to be extended to transportation, and transportation deserves things like sales and operations planning (S&OP) meetings.
User Advice:
■ Recognize that business conditions are in a state of flux, forcing shippers to be more proactive to understand capacity needs and collaborate with carriers to ensure freight capacity availability.
■ Make transportation planning part of the S&OP process and understand that operational transportation planning is not enough. Start planning freight further into the future.
■ Abandon spreadsheets and consider freight-forecasting tools if your company has current or projected freight capacity shortages. Although spreadsheets are ubiquitous — and the most
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This research note is restricted to the personal use of [email protected]. common tools for attempting transportation forecasting — they are not multiuser or enterprise- class tools, and logic flaws are common. Furthermore, they are not scalable, they have limited logic granularity and they lack effective controls.
Business Impact: Although controlling transportation costs remains a prime focus for shippers, the current flux and uncertainty in the transportation industry will demand that shippers become proactive in forecasting future freight demands. Doing so will help ensure adequate freight capacity with a shipper’s core carriers by helping the carriers align their driver and asset movement patterns with customers’ freight demographics and demands. As a result, companies will be able to maximize the use of the best freight rates and minimize the need to go deeper into the routing guide, where rates are typically higher. Furthermore, the future-state scenario has the potential to jeopardize costs and capacity. If it is not planned effectively, then shippers will pay more for strained capacity resources. Shipper partnerships with carriers for known quantities at specific times will secure capacity at predictable and lower rates, while latecomers will be forced to pay higher spot- market prices. By becoming more predictive and planning ahead, shippers will ultimately realize lower costs than the traditional cost only focused methods.
Benefit Rating: Transformational
Market Penetration: Less than 1% of target audience
Maturity: Emerging
Sample Vendors: 4flow; Blue Yonder; Dassault Systèmes; E2open; flexis; LLamasoft; MIXMOVE; Oracle; Transplace
Recommended Reading: “How Digitized Freight Platforms and Other Transportation Technologies Can Help With Current Domestic Transportation Capacity Challenges”
“Critical Capabilities for Transportation Management Systems”
“Gartner’s Model for Holistic Multimodal Transportation Management Systems: Extended Capabilities”
“Leverage Transportation Forecasting to Enhance Available Carrier Capacity and Reduce Transportation Costs”
Warehouse Execution Systems Analysis By: Dwight Klappich
Definition: Warehouse execution systems (WES) are a hybrid technology that blends capabilities from traditional warehouse management systems (WMS) and warehouse control systems (WCS). WES enhance work management in automated warehouses and manage the interplay between automated and manual processes. WES leverage near-real-time insight into work in the automated warehouse, combined with advanced business process logic to improve the flow and prioritization of work.
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This research note is restricted to the personal use of [email protected]. Position and Adoption Speed Justification: Historically, WMS controlled all people-centric warehouse transaction logic, such as receiving, put-away, counting, picking, packing and shipping. WES was specifically suited to high-velocity warehouse processes, adding capabilities like waveless picking that seamlessly integrates with the WCS, which, in turn, talks (in real time) to the automation layer. Early WES vendors had strong domain expertise in automation and built their logic to better exploit automation. WES is a very specialized use case of IoT in the warehouse.
WES will evolve in two directions before eventually coalescing. Initially, WES vendors will innovate and continue to add business logic approaching the breadth of WMS within the WES. In parallel, some thought-leading WMS vendors recognize the threat of WES and are adding WES logic to reach further into the automation layer. This bifurcation will threaten traditional WMS vendors’ ability to sell into automated facilities if they fail to address this trend. Adoption and evolution of WES was stalled because of mergers and acquisitions, and due to vendor and buyer confusion, but interest is renewed in more advanced business logic aimed at driving automation.
User Advice: As logistics leaders consider warehouse redesigns to address their need for high- velocity fulfillment, they should investigate emerging WES as a potential good fit for new, automated, order-picking strategies. They also should assess future demand to determine the degree of productivity improvement needed to support order volume and velocity.
Existing warehouses should take a more incremental approach, evaluating whether WES can serve as a supplement in areas such as order picking. Organizations with well-functioning warehouse capabilities should assess offerings thoroughly before adopting emerging technology that still has gaps.
Business Impact: Logistics leaders, especially in e-commerce and high-volume retail, are under pressure to drive increased throughput at lower costs per order, which is pushing the need for high- velocity automated fulfillment. WES is a potential good fit for new automated order-picking strategies, and companies will look to WES to help support increased volume and velocity. If volume/velocity opportunities are modest, then process evolution and adding people may be the path to scaling the business. However, if volume/velocity growth is twice or more than current levels, then new technology will be the key to future productivity gains.
Consider the following impact areas:
■ Risk: Moderate — Tools are nascent and evolving, but the cost and risk of WES solutions are significantly less than that of automation.
■ Technology intensity: High — Tools are nascent and, in most cases, not completely packaged, making projects more complicated, but the cost and risk of WES solutions are significantly less than that of automation.
■ Strategic policy change: Low — WES is primarily an operational effectiveness opportunity with minimal impact on the overall strategy.
■ Organization change: Moderate — As the amount of automation typically driving the need for WES increases, companies will have to transition management practices from a focus on
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This research note is restricted to the personal use of [email protected]. people to a focus on automation design. For example, the emphasis on things like maintenance management becomes more important as the warehouse becomes more automated.
■ Culture change: Low/moderate — Hard to generalize as it will be very specific to the use case.
■ Process change: Moderate to high — As material handling automation assumes more responsibility for process execution, the changes can be dramatic, and things like picking will have to be completely redesigned.
■ Competitive value: Moderate — WES is primarily an operational effectiveness opportunity with minimal competitive advantage, unless automation can significantly lower costs and/or improve speed beyond the reach of competition.
Benefit Rating: Moderate
Market Penetration: 1% to 5% of target audience
Maturity: Emerging
Sample Vendors: Fortna; Manhattan Associates; QC Software; Softeon; Tech King Operations (TKO); VARGO
Recommended Reading: “Transform Automated Warehouses With Warehouse Execution Systems to Master High-Velocity Order Fulfillment”
“Select From the 8 Software Deployment Options to Support Warehouse Automation and Robotics”
“Warehousing and Fulfillment Vendor Guide”
Supply Chain as a Service Analysis By: Michael Dominy
Definition: Supply chain as a service (SCaaS) is an externally focused commercial digital service that delivers ongoing management of one or more supply chain functions to other enterprises. These business process services leverage technologies and supply chain professionals. Processes are standardized, configurable and exploit cloud technologies.
We have combined supply chain (SC) business process as a service (BPaaS), business process outsourcing (BPO) and digital SC services into SCaaS to better align with how the market describes the innovation.
Position and Adoption Speed Justification: Cost-effective availability of cloud computing infrastructure services, multitenant SaaS applications, open-source software and analytics tools have enabled service providers and some enterprises to create, launch and sustain SCaaS offerings. Adoption will vary by maturity and current application portfolio. Organizations with limited or outdated supply chain applications will be more open to using SCaaS. Access to master data and transaction systems, such as ERP, will be critical enablers for the service.
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This research note is restricted to the personal use of [email protected]. Adoption varies by process area:
■ Transportation management, customs clearance process and tracking are mature examples. In the area of tracking, basic tracking is not charged separately.
■ Postsale or postdelivery services are less mature.
■ Supply chain planning and analytics as a service are less mature but are being offered and hyped by many providers.
■ Sourcing and procurement, like logistics, is mature overall with differences between direct and indirect categories. Indirect sourcing and procurement is very mature, while direct materials or parts is immature.
User Advice: If you are considering launching your own SCaaS, evaluate your ability to compete. Use “Take Four Steps to Develop Your Supply-Chain-as-a-Service Strategy” to help assess your capabilities, the competitive landscape and solution requirements.
If you are considering using SCaaS, prioritize processes and functions with lagging capabilities or those spanning multiple organizations. For example, if you have poor supply chain planning capabilities and constrained budgets or insufficient planning professionals, you should consider a SCaaS offering for supply chain planning. An example SCaaS targeting processes spanning multiple organizations would be those enabling a digital business model for a product company that requires integration and coordination of forward fulfillment and aftermarket or delivery services.
Continually monitor the market for new SCaaS offerings. As software functionality becomes more advanced, and as integration capabilities utilizing cloud services improve and expand, service providers will bring new and broader services to the market. Digital tools, such as artificial intelligence, robotic process automation and machine learning, are enabling providers to create, deploy and scale services faster than traditional license, design and implementation approaches using packaged applications.
Business Impact: SCaaS will continue to impact the logistics function, especially as logistics service providers look to leverage technology to offer more differentiated services to shippers. Aftermarket services, such as returns and reverse logistics, will be impacted as companies expand digital offerings or embrace circular business models. SCaaS will also impact planning and optimization, including demand forecasting, supply planning and inventory optimization. Manufacturing operations processes that involve regulatory and compliance activities, such as environmental, health and safety (EH&S) reporting, material safety data sheet (MSDS) processing and reporting, will be impacted. The demand-sensing and demand-shaping functions within supply chain management (SCM) will also be impacted as existing and new service providers capture and analyze consumer data from social networks and combine it with other sources of demand data, such as POS scan data.
Benefit Rating: High
Market Penetration: 1% to 5% of target audience
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This research note is restricted to the personal use of [email protected]. Maturity: Emerging
Sample Vendors: Arrow Electronics; Celestica; DHL; Entercoms; Genpact; Jabil; KPMG; Mayo Clinic; Tata Consultancy Services; UPS Supply Chain Solutions
Recommended Reading: “Take Four Steps to Develop Your Supply-Chain-as-a-Service Strategy”
“Market Guide for Supply Chain Strategy and Operations Consulting”
“Market Guide for Supply Chain Planning BPO or BPaaS”
“Magic Quadrant for Third-Party Logistics, North America”
“Market Guide for Electronics Manufacturing Services”
At the Peak
Light Cargo Delivery Drones Analysis By: Aapo Markkanen; Bill Ray
Definition: Light cargo delivery drones are flying, autonomous vehicles used to deliver small packages of food, medical supplies or other suitably sized goods. Autonomy may be supplemented by remote operation when needed. The maximum weight of cargo depends on the flown distance, the size of the drone and the applicable regulations, among other factors. Currently, for example, delivery drones used by JD.com in China include a battery-powered model being able to carry 10 kg over 100 km per charge and a gasoline-powered one being capable of 30 kg over 30 km.
Position and Adoption Speed Justification: Many high-profile companies, including Alphabet, Amazon and JD.com, have invested in development of delivery drones. The concepts are based either on dropping deliveries from midair or landing the drone at the delivery address. These services are still at an early stage, owing to the cost of the devices, the complexity of operation and regulatory restrictions. However, most of the vendors are hoping that the loosening regulations and the economies of scale will eventually make large-scale operations viable. With its relatively established medical delivery operations across Eastern Africa, Zipline is currently the best example of how the technology is being applied in the field.
Regulations are still developing, with aviation authorities and policymakers evaluating, in particular, how fleets of aerial delivery drones can be accommodated into the airspace. For urban operations, integration with smart city infrastructure is another area that requires significant progress. Ensuring physical safety, in terms of both people and property, is the key consideration, so vendors working on delivery drones are also paying particular attention to parachutes, redundant systems and other safety measures. Once the safety aspect has been adequately addressed, privacy is likely to become an issue that the vendors will have to tackle next.
The core technology behind the light cargo delivery drones is becoming increasingly advanced, but due to the regulatory constraints and certain technical challenges, they remain in the commercial sense an unproven concept. Therefore, in the Hype Cycle, they are still climbing the Peak of Inflated
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This research note is restricted to the personal use of [email protected]. Expectations. However, the next 12 to 18 months may accelerate the progress to a certain extent, as the COVID-19 crisis strengthens the case for deliveries with no physical human contact — also from the regulators’ point of view.
User Advice: For most businesses, light cargo delivery via drones will be a cost reduction mechanism. For some others, it will be a way to scale time-sensitive last-mile deliveries, which will, over time, become increasingly challenging for fully manual supply chains to handle. The decision on adoption must be a process of creating a cost-benefit analysis. Enterprises should identify types of light cargo that might be suitable for autonomous delivery, and then identify the terrain over which the deliveries will take place. The terrain will determine the method of locomotion — fixed wing flight, rotary flight, wheels or something more esoteric — which will, in turn, determine the cost of delivery and enable a cost estimate to be created. This estimate should then be compared with the cost of other, more traditional means of delivery, such as trucks. The process should be repeated annually, as the costs will change as the technology matures and the scale of deployments increases.
While this analysis should drive long-term investment in, and scaling of, delivery drones, trials and other small-scale commercial deployments should be considered even when there is unlikely to be near-term ROI, if the technology stands to have a strategic impact on the company’s business. As they mature, emerging technologies, such as delivery drones, typically give the greatest competitive advantage to organizations that have gained experience with them from relatively early on.
In the long run, light cargo delivery drones will eventually become commonplace. Every business involved with the logistics of relevant goods, and especially the ones with a dispersed base of end customers, should be planning how to take advantage of the technology as it matures. At this point, a recommended approach is to engage with pioneering vendors and relevant regulators in order to trial the technology.
Business Impact: The impact of low-cost deliveries will be extremely broad. Initially, they will disrupt postal and courier services. As the cost of delivery drops, wider and long-lasting changes in behavior among consumers and businesses will result. For example, in the retail and hospitality sectors, customers expecting 24-hour product availability to the door will be less likely to shop at local, late-night stores, while the number of dark kitchens (restaurants without a physical customer- facing presence) will increase. Healthcare organizations whose operational footprint covers congested or remote locations can benefit hugely from using drones to carry time-sensitive medical deliveries faster than what is otherwise possible.
The proliferation of autonomous vehicles may also increase public tolerance for (and trust in) the autonomy of all kinds. As such, it may, for instance, pave the way for greater acceptance of autonomously driven passenger vehicles.
Benefit Rating: High
Market Penetration: Less than 1% of target audience
Maturity: Emerging
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This research note is restricted to the personal use of [email protected]. Sample Vendors: Alphabet; Amazon; Flytrex; JD.com; Matternet; Skycart; Wingcopter; Zipline
Recommended Reading: “Top 10 Strategic Technology Trends for 2020: Autonomous Things”
“Forecast Analysis: IoT Enterprise Drone Shipments, Worldwide”
“Why Autonomous Flying Drones Must Be on the Radar of Mobility Sector CIOs”
“Innovation Insight for Drones in Healthcare and Retail Last-Mile Delivery”
IoT-Enabled Applications Analysis By: Benoit Lheureux; Jim Robinson
Definition: An IoT-enabled business application is natively designed or architecturally enhanced to directly support or integrate with IoT, such that:
■ It is integrated with IoT edge devices and platforms, possibly via IoT middleware.
■ It ingests and analyzes IoT data and events to minimally improve situational awareness and produce a business-relevant finding, and optionally to additionally orchestrate a business response.
■ To accomplish the above, it leverages digital twins.
Some enterprise applications (for example, APM, CRM and FSM) do this today.
Position and Adoption Speed Justification: Most business applications today are not yet IoT- enabled because they predate IoT and thus they were not designed to natively ingest and process real-time event data. But there are some emerging IoT-enabled applications (see “Market Guide for Digital Twin Portfolios and Enabling Technologies”). When IoT-enabled applications are not available, technology providers and enterprises create IoT-enabled applications by integrating IoT technology, which requires:
■ Integrating with brownfield OT edge devices (for example, PLCs, SCADA, and historians) be used with the application.
■ Making applications aware of IoT metadata (e.g., time-series sensor data) and integrating that with other traditional application data (e.g., asset master).
■ Depending on the desired outcomes, identifying what forms of analysis are needed to produce useful insights and events.
■ Enhancing existing application workflows and interfaces to accommodate IoT triggered events (for example, automatically creating “Fix It” tickets for equipment maintenance).
Given the emerging availability of packaged IoT-enabled applications and the ability — despite challenges — to implement IoT-enabled applications, we have accelerated this IP and now believe that it will take two-to-five years for IoT-enabled applications to become readily available across multiple industries.
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This research note is restricted to the personal use of [email protected]. User Advice: Companies adopting IoT must prepare for a future where many business applications are IoT-enabled. Thus, application leaders and architects should:
■ Prioritize the most important desired IoT-enabled business outcomes in your business (see “Leverage Digital Twins to Deliver a Compelling Oil and Gas Industry Customer Experience” and “The Future of Field Service Management”). Use these to determine which of your business applications need to become IoT-enabled applications.
■ To IoT-enabling an existing application plan to acquire digital twins as a separate software product (see “Survey Analysis: IoT Digital Twin Adoption Proliferates Across Many Sourcing Options”). Then plan to integrate these (often via APIs) with your applications, preferably via integration tools (see “Choose the Best Integration Tool for Your Needs Based on the Three Basic Patterns of Integration”).
■ Design digital twins to generate events, for example to produce food dispenser replenishment requests in your FSM and procurement applications. Plan to integrate these digital twins with your existing business applications (see “What to Expect When You’re Expecting Digital Twins”).
■ Encourage collaboration between IT and OT staff (see “As IT and OT Converge, IT and Engineers Should Learn From Each Other”). One impact will be the need to synchronize digital twin data with existing business application master data.
■ Design new IoT-enabled applications as small, fit-for purpose “miniapplications,” e.g., equipment maintenance scheduling, replenishing a vendor machine, or reporting a patient’s declining health condition. Additionally, factor proliferation of these applications in your application strategy (see “Innovation Insight for Packaged Business Capabilities and Their Role in the Future Composable Enterprise”).
Business Impact: IoT will close the gap between billions of things — for example, products, people, assets and equipment — and applications across all industries and business processes. Thus, IoT-enabled applications will proliferate to address an ever-widening set of use cases. Examples include:
■ IoT-triggered replenishment of consumables, such as chemicals, filters, bulbs, and food.
■ Turbines, refrigerators and vehicles will self-diagnose imminent failures, provision spare parts, and trigger their own request for repair.
■ Patients that are monitored by digital twins which trigger care requests via integration with healthcare provider dispatching applications.
■ For business activities such as plant maintenance, building management, and smart agriculture, IoT endpoints will be linked to workflows in applications such as ERP.
■ Retailers, hotels and airports will integrate event-streamed device data, consumer behavior, and inventory to better utilize spaces, improve user experience, increase safety (e.g., social distancing), trigger on-the-spot offers, etc.
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This research note is restricted to the personal use of [email protected]. The workflow in applications will be triggered by digital twins. While implementing such profound application enhancements will take years, the long-term benefits and impact of IoT on improved business process execution will be transformational. For example, by 2024 at least 50% of enterprise applications in production will be IoT-enabled.
Benefit Rating: Transformational
Market Penetration: 1% to 5% of target audience
Maturity: Emerging
Sample Vendors: C3.ai; GE Digital; Hitachi Vantara; IBM; Infor; Oracle; PTC; SAP; Schneider Electric; Uptake
Recommended Reading: “Market Guide for Digital Twin Portfolios and Enabling Technologies”
“Survey Analysis: IoT Digital Twin Adoption Proliferates Across Many Sourcing Options”
“What to Expect When You’re Expecting Digital Twins”
“Innovation Insight for Packaged Business Capabilities and Their Role in the Future Composable Enterprise”
“IT Market Clock for ERP 2020 — Preparing for the 4th Generation of EBC”
Warehouse Picking (Humanoid) Robots Analysis By: Dwight Klappich
Definition: Warehouse picking robots are more humanlike robots that can pick up, handle and move goods using some form of reticulated arms and grippers. These systems employ advanced AI and vision systems to recognize and pick up items that are not in consistent places and orientations, and are not the same sizes and shapes.
Position and Adoption Speed Justification: While industrial robotic arms are mainstream in manufacturing, they remain nascent in warehousing except for some very specific applications such as palletizing. Industrial robots are normally large, immobile and fit for one task. Given the varying types of work required in warehouses, this architecture is too limiting. Warehouse picking robots must address repeatable tasks with minimal variance from activity to activity and item to item, across dimensions and weights. Variability makes creating universal picking solutions technically very difficult, and it will be years before picking solutions match the flexibility, dexterity and speed of humans. Warehouse (humanoid) robots will evolve during the next five to 10 years to address the needs for better cost, flexibility, adaptability, scalability, utility and intelligence. Humanoidlike robots, similar to humans, will combine multiple technologies (such as AI-enabled vision systems, reticulated arms that can move in multiple planes, and various forms of gripping technology) to enable the robot to identify, locate, pick up and handle goods.
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This research note is restricted to the personal use of [email protected]. User Advice: There are a limited number of use cases where humanoid robots are viable today. There are stationary robotic arms that fit very specific use cases where the product size, weight and shape are consistent, where the location of product is consistent and where the operation to be performed is consistent (e.g., palletizing robotic arms for picking cases). If companies have these conditions, then exploring robotic arms is worthwhile. However, if companies are in less structured and consistent environments, then they must use caution and pilot extensively. Furthermore, companies should evaluate the realistic speed because, today, humans typically outperform robotic arms in all but the most select use cases.
Business Impact: Warehouse humanoid robots will transform warehouse operations over the coming decades as the costs and complexities come down, which will open up the market to more companies. Labor availability and labor costs seem to be the most likely drivers, but improvements in overall throughput and productivity will be the primary value, regardless of whether labor is reduced.
Consider the following impact areas:
■ Risk: High — Robots are rapidly emerging but remain unproven for all use cases. The long payback and high upfront capital outlay place more emphasis on an effective selection process.
■ Technology intensity: High — Replacing people with robots places significant emphasis on getting technology right.
■ Strategic policy change: Moderate — Shifting from people-centric organizations to robotics- driven environments has a significant impact on an organization’s strategy and culture at all levels.
■ Organization change: Moderate — Management techniques and organizational design must evolve with robots in mind.
■ Culture change: Moderate — Cultural changes must be top of mind because some employees will feel threatened by robots, and this could negatively impact projects.
■ Process change: High —When moving from people-driven to automated activities, processes must be redesigned to benefit from robotic advantages.
■ Competitive value: Moderate — Primary competitive value comes from achieving best-in- class operational performance.
Benefit Rating: Transformational
Market Penetration: 1% to 5% of target audience
Maturity: Emerging
Sample Vendors: Berkshire Grey; IAMRobotics; Kindred; KUKA; RightHand Robotics (RHR)
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This research note is restricted to the personal use of [email protected]. Digitized Freight Networks (Road) Analysis By: Bart De Muynck
Definition: Digitized freight networks (also often referred to as digital freight brokerage platforms), provide shippers real-time access to capacity and rates, and allows them to instantly book freight. These platforms publish transportation supply and demand information to a broad online community of shippers and carriers across extensive networks of carriers leveraging modern integration techniques and technologies.
Position and Adoption Speed Justification: A growing number of digitized freight networks for commercial domestic transportation are entering the U.S., European markets as well as Asia (mainly India and China). These platforms are becoming more interesting to and necessary for shippers, especially in times of disruption and/or tight capacity. The models differ from traditional brokerage in that the capacity offered is available rather than booking the load with the shipper and finding capacity later. Customer demand is typically driven by increases in transportation costs (both full and less than truckload), need for automation and access to real-time freight capacity combined with a transportation industry in flux. This forces shippers to seek other sources for capacity outside of their traditional contracted carriers, brokers and spot markets. Where a company’s existing transportation systems might be directly connected to a small number of preselected carriers, the current business climate necessitates that they communicate with a far larger ecosystem of partners. This offers a win-win for carriers as it fills empty miles and can increase the utilization of the carrier’s fleet. Many of these platforms have partnered with existing TMS vendors to provide an integration for loads where contracted rates cannot be found or honored.
User Advice: Shippers that have a focus on reducing transportation costs, have a dependency on the spot market or struggle with capacity, can source their transportation needs via these networks to increase their options when it comes to transportation. These platforms, although still relatively small, offer opportunities for shippers that are looking to find capacity and lower costs while providing better delivery services to their customers.
Business Impact: Although most shippers still use contracted common carriers and private fleets for the biggest part of their business, growing capacity constraints, increasing omnichannel orders and increasingly selective carriers will continue to drive demand for ad hoc capacity. These platforms will provide shippers with available capacity while increasing carriers’ load percentage and decreasing empty backhauls and empty miles.
Benefit Rating: Moderate
Market Penetration: 5% to 20% of target audience
Maturity: Adolescent
Sample Vendors: BlackBuck; Convoy; Emerge; Everoad; Fretlink; InstaFreight; Loadsmart; NEXT; Transfix; Uber Freight
Recommended Reading: “How Digitized Freight Platforms and Other Transportation Technologies Can Help With Current Domestic Transportation Capacity Challenges”
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This research note is restricted to the personal use of [email protected]. “Digitization of Transportation Networks Provides an Option for Companies to Tackle Transportation Capacity”
“Video: Converging Physical and Digital Transportation Through Visibility and Digital Procurement of Freight — Land O’ Lakes Use Case”
Blockchain in Logistics and Transportation Analysis By: Andrew Stevens; Dwight Klappich
Definition: A blockchain is one architectural design of the broader concept of distributed ledgers. In logistics and transportation, blockchain is an expanding list of cryptographically signed, irrevocable transactional records shared by a network of participating supply chain trading partners (including manufacturers).
Position and Adoption Speed Justification: Across manufacturing, logistics, and transportation providers, blockchain can potentially be applied in areas such as automating/digitalizing transactional contracts, source-to-store goods authentication, event tracking, and shipper-to-carrier capacity matching and optimization. Its position reflects continued but decelerated momentum for blockchain initiatives across the logistics and transportation sectors. Solution adoption and cadence could be dependent on how manufacturers of finished goods demand interdependent process steps and verifications across digital and physical transactions during high-risk or critical stages of transportation and distribution. Technology solutions supporting blockchain must adapt to bridge physical levels of authentication and interoperable data exchange across responsible trading partners.
Blockchain technology adoption challenges will also be impacted by a lack of robust protocols for governance across transactions, limited resources for establishing core blockchain expertise in- house and creating zones of trust in dynamic and interoperable operating environments. This is especially true for smaller and local logistics and transportation partners. Challenges largely centered around ecosystem enablement include:
■ Governance
■ Standards
■ Interoperability
■ Integration
Increasingly expectations and demands from retailers, distributors, and consumers paralleled with the increasing need for future digitalized networks will shape and influence future applications for blockchain in logistics and transportation. This will likely occur through more collaborative and orchestrated trials and pilots for product supply across key products, assets, and services.
User Advice: Manufacturing, transportation, and logistics business leaders should consider joining or establishing a dedicated working group and consortium to accelerate their potential for being able to position blockchain accurately in their logistics and transportation operations. Recognize
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This research note is restricted to the personal use of [email protected]. that terminology surrounding blockchain across logistics and transportation is in flux and often needs more granular and broader interpretation when it is applied in the context across the full supply chain. Uncertainty and applicability across supply chains (especially in physical transactions) often masks the potential suitability of technology solutions to meet business use cases. Be sure to:
■ Assess the solution’s ability to map and execute across specific logistics and transportation use-case criteria and risks — such as location, status and ownership — and its planned timing and positioning across your strategy technology roadmaps.
■ Identify specific high-risk logistics and transportation routes or markets that exhibit transactional complexity or have exhibited variable or low levels of service. These are prime candidates for blockchain.
Business Impact: Multiple business use cases for blockchain across logistics and transportation are yet to be proven. Although early hype has been focused on the financial services industry, it is likely that supply chain management will see increasingly higher volumes of adoption, but at slower rates.
Consider the following areas and levels of impact:
■ Risk: High — Tools are still nascent and unproven, and resources and expertise to develop, maintain and govern these systems are lacking. However, in supply chain logistics and transportation, blockchain continues to have momentum.
■ Strategic policy change: High — Certain supply chain blockchain use cases deployed as part of a strategic technology roadmap across many areas of the supply chain, such as global trade finance, product pedigree and security, could realize significant business improvements.
■ Organization change: High — Groups of trading partners will need to address new collaborative and interoperable working practices and logistics organizations are normally risk averse.
■ Culture change: High — Blockchain execution will require cultural shifts focused on shared value creation, trust and consensus across all levels of the business.
■ Process change: High — Protocols must be established for secure transactions and governance mechanisms for the blockchain ecosystems.
■ Competitive value: High — Early collaborators and adopters will gain a competitive advantage. However, because of the multienterprise nature of supply chain management blockchain use cases, logistics and transportation may get wrapped up into broader initiatives across the extended supply chain.
Benefit Rating: Transformational
Market Penetration: 1% to 5% of target audience
Maturity: Emerging
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This research note is restricted to the personal use of [email protected]. Sample Vendors: Blockshipping; Chainworks; Inxeption; Modum; Morpheus.Network; ShipChain; TMW Systems; TradeLens
Recommended Reading: “Supply Chain Brief: Industry Consortia to Drive Education and Standardization of Blockchain in Transportation”
“Toolkit: Accelerate Your Blockchain Technology Competency Across the Supply Chain”
“Top 10 Strategic Technology Trends for 2020: Practical Blockchain”
“Blockchain Technology Spectrum: A Gartner Theme Insight Report”
Blockchain in Supply Chain Analysis By: Dwight Klappich; Andrew Stevens
Definition: A blockchain is an expanding list of cryptographically signed, irrevocable transactional records shared by all participants in a network. Each record contains a time stamp and reference links to previous transactions. With this information, anyone with access rights can trace back a transactional event, at any point in its history, belonging to any participant. A blockchain is one architectural design of the broader concept of distributed ledgers.
Position and Adoption Speed Justification: Supply-chain-related blockchain initiatives focused on the movement and control of physical goods continue to be nascent with mostly proofs of concept (POCs) and solutions in early stages of development. There are few, if any, supply chain blockchain projects being deployed at scale. Interest in potential applications across supply chains has accelerated and supply chain organizations have shown continued interest in blockchain concepts. Initiatives are a mix of vendor-led, industry- and consortium-driven discussions. Solution adoption and cadence could be dependent on how supply chains often demand interdependent process steps and verifications across digital and physical transactions. Technology solutions supporting blockchain must adapt to bridge physical levels of authentication and the need for interoperable data exchange across responsible trading partners. Blockchain technology adoption challenges for supply chain also include lack of standards for governance across transactions, scalable distributed consensus systems and foundational electronic interoperability across trading partners.
User Advice: The position on the Hype Cycle reflects use cases across supply chains and technology solutions still in early POC and development phases. Recognize that terminology surrounding blockchain is in flux and often needs more granular and broader interpretation when applied to a supply chain use case. Uncertainty and applicability across supply chains (especially in physical transactions) often masks the potential suitability of technology solutions to meet business use cases. We recommend:
■ Clearly identify how the term is being used and applied internally and by providers to better understand the possible return on capital employed, and the incremental value that could be realized beyond proven technology options.
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This research note is restricted to the personal use of [email protected]. ■ Assess the solution’s ability to map and execute across specific supply chain use-case criteria and risks — such as location, status and ownership — and its planned timing and positioning across your strategy technology roadmaps.
■ Identify specific high-risk areas of supply chains that exhibit transactional complexity across multiple stakeholders. These are prime candidates for blockchain: for example, trade contracts, asset management, transportation and traceability.
■ Closely monitor the evolution of blockchain technology solutions for supply chain that might materialize through working groups, consortia or peer-to peer industry initiatives.
Business Impact: Multiple business use cases for blockchain across supply chains are yet to be proven. Although hype has been focused on the financial services industry, supply chain management is likely to see increasingly higher volumes of adoption, but at slower rates. The potential of this technology to radically transform economic-related interactions should raise critical questions for society, governments and enterprises. Although there are no clear answers to these questions today, it is important to find the answers during the rise of the programmable economy.
Consider the following impact areas:
■ Risk: High — Tools are nascent and unproven, and expertise to set up, maintain and govern these systems is very immature.
■ Strategic policy change: High — Certain supply chain blockchain use cases deployed as part of a strategic technology roadmap in areas such as global trade finance, product pedigree or security could realize significant business improvements.
■ Organization change: High — Across diverse supply chain business partners, companies need to address new collaborative and interoperable working practices.
■ Culture change: High — Blockchain execution will require cultural shifts across all levels of the business focused on shared value creation, trust and consensus, particularly for solutions that span multiple enterprises where ecosystem enablement is difficult.
■ Process change: High — Protocols for secure transactions and governance mechanisms for the blockchain ecosystems.
■ Competitive value: Moderate — Early adopters will gain a competitive head start, but because of the multienterprise nature of SCM blockchain use cases, industries will benefit most if multiple parties participate in the technology.
Benefit Rating: Transformational
Market Penetration: 1% to 5% of target audience
Maturity: Emerging
Sample Vendors: arc-net; Chronicled; CHAINSTEP; Circulor; Guardtime; IBM; Omnichain; Skuchain; SupplyBloc; VeChain
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This research note is restricted to the personal use of [email protected]. Recommended Reading: “Follow Four Evaluation Steps to Decide If Blockchain Is Right for Your Supply Chain”
“Seven Things That Supply Chain Leaders Need to Know About Blockchain”
“Blockchain Fundamentals for Supply Chain: A Guide to the New Boardroom Buzzword”
“Explore Blockchain’s Potential in Life Science Companies’ Track-and-Trace and Serialization Development Strategies”
Immersive Experience in Logistics Analysis By: Dwight Klappich
Definition: The immersive experience (formerly wearables) in logistics spans several technologies. Conversational systems are where user and machine interactions occur mainly in natural language. Virtual reality is where computer-generated 3D environments are provided that surround a user and can respond to the individual’s actions in a natural way. Augmented reality is where users are presented with real-time visual information in the form of text, graphics, video and other virtual enhancements integrated with real-world objects.
Position and Adoption Speed Justification: In logistics, most businesses still consider the immersive experience a novelty. Only a small number of companies have progressed beyond pilots, notably with smartglasses. Also for example, while transactional voice is quite mature in logistics, conversational platforms, or chatbots, while interesting to users, are nascent. Although interest is increasing, there remain few examples of widespread adoption in production environments. Some of the initial wearable prototypes are new slants on solutions prevalent in warehouses, such as using smartglasses to replace scanning and voice solutions. However, technologies like virtual reality (VR) have yet to find appropriate use cases, even though interest is growing. Early indications are that augmented reality (AR) and VR are following an adoption pattern similar to traditional industrial/transactional voice (e.g., vendors like Honeywell’s Vocollect), so as the cost and performance of hardware improves, adoption will increase. Over time, we anticipate the emergence of new solutions that will provide capabilities not currently available. For example, virtualized cart picking, where the smartglasses function like a head-up display.
User Advice: Consider pilots for wearable user interfaces, especially smartglasses. Start with wearables for mobile workers who cannot conveniently or safely put aside what they have in their hands to use a phone or tablet. Examples include employees using tools or equipment, or who need to keep their heads up or hands free for safety. Evaluate solutions for all-day comfort to avoid issues such as headaches, eye fatigue and skin irritation from wearable devices.
Engage with software developers now on use cases specific to your business needs and integrate solutions for logistics with the warehouse management system. Robust software solutions fully exploiting advanced AR will take an additional two to five years of development, but initial solutions are ready for basic use cases today.
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This research note is restricted to the personal use of [email protected]. The ROI for implementing wearables will be greater in countries where worker wages are relatively high. Where time-motion efficiency is essential to productivity, such as call centers and logistics organizations, employers are investigating wearables, such as gaze tracking through audio headsets and location tracking through badges. Explore solutions that lead to recommendations to increase worker productivity, or to monitor employees in physically demanding work environments.
Business Impact: Logistics’ use of immersive technologies will bifurcate into solutions for workers in the warehouse and in transportation, and the nature, types and value of solutions will segment likewise. For example, the use of head-mounted displays (HMDs) in warehousing has already garnered interest, and productive pilots indicate some improvements in worker efficiency versus existing methods. In transportation, there is potential for solutions targeted at productivity, such as HMDs or the equivalent, that support drivers’ mission, navigation and safety. Wearable solutions could monitor driver fatigue, for example. AR solutions have the potential to increase productivity by providing part labels, checklists, maps and instructions superimposed on real-world views. Companies should monitor government mandates (e.g., from OSHA, EPA, NTSB) that could require wearable technology for logistics operations for safety or compliance reasons.
Benefit Rating: Moderate
Market Penetration: Less than 1% of target audience
Maturity: Emerging
Sample Vendors: Accelogix; Honeywell; Ubimax; Upskill; Vuzix; Zebra
Web-Based Logistics Portals Analysis By: Bart De Muynck
Definition: Web-based logistics portals allow the booking and tracking of ocean, air and ground- based transportation that do not require the installation of an enterprise transportation management system.
Position and Adoption Speed Justification: Web-based logistics portals offer a consumer-like interaction experience where shippers can visit the website of their choice to enter simple information such as commodity, origin, destination and weight, and instantly receive several shipping quotes. To be self-service, these solutions typically have a simple, user-friendly interface resembling consumer travel sites such as Orbitz, trivago and KAYAK. This contrasts with the traditional process of contacting and contracting with a forwarder or carrier to request a quote and receive an answer in as much as four days. With the low barrier to entry, web-based logistics portals can be used nearly instantly, because of that we envision a quick time to maturity. This does not mean, however, that these portals will replace transportation management systems or the contract- based logistics procurement process that most enterprises use today. Also, they’re not meant to replace robust supply chain visibility platforms. Rather, the portals complement these processes for enterprises needing spot bids. They are also a viable option for small and midsize businesses (SMB) that may be turned down by ocean carriers for lack of volume or receive less competitive bids because of the lack of volume.
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This research note is restricted to the personal use of [email protected]. Most portals focus on a subsegment of the market, whether it is a specific geography, lane, industry, mode or combination thereof, and are not meant to replace multimodal, global transportation systems. This profile focuses mostly on the portals that feature ocean logistics; however, portals for other shipping modes like ground transportation and air are quickly emerging as well.
User Advice: Enterprises can use web-based logistics portals to complement their current booking processes rather than replace them. These portals offer a quick-response solution to fill urgent last- minute requests and spot needs. SMBs, however, may use these portals on a more frequent basis.
Freight forwarders and logistics providers can use these portals to reach the SMB market in a profitable manner, but only if the portal is not overly competitive and acting as a de facto forwarder.
Business Impact: Web-based logistics portals offer the ability to fill urgent shipping and/or spot procurement strategies that complement an enterprise’s contracted transportation services. They offer SMBs the access to the global shipping market in a more cost-effective manner. These portals mimic such e-commerce services as Amazon’s subsidizing of parcel shipments for small sellers on their platform. Currently, most of the platforms have an emphasis on ocean freight, but services for air and truck also exist.
Additionally, many portals offer freight forwarders and logistics providers the ability to reach SMBs in a profitable manner, which is not always possible on their own because of the costs associated with the sale and maintenance of a low-volume shipper.
Benefit Rating: Moderate
Market Penetration: 5% to 20% of target audience
Maturity: Adolescent
Sample Vendors: BoxC Logistics; Flexport; Freightos; iContainers; Kontainers; Shipwise; SimpliShip; Transporteca; Xeneta
Recommended Reading: “Market Guide for Global Trade Management Software”
Warehouse Resource Planning and Scheduling Analysis By: Dwight Klappich
Definition: Warehouse resource planning and scheduling applies the concepts of forward-looking, constraint-based planning and optimization to work activities within a warehouse or warehouse campus.
Position and Adoption Speed Justification: Constraint-based planning and optimization techniques have been used in manufacturing plants for more than 30 years, but these techniques are just emerging in warehousing. Warehouses largely still rely on relatively rudimentary work allocation methodologies (e.g., task interleaving and wave planning) to assign warehouse work
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This research note is restricted to the personal use of [email protected]. activities. Some warehouse management system (WMS) vendors are building some forward- planning capabilities (such as labor or equipment planning) into their WMSs, but these are nascent. However, given user demands for continuous productivity improvements and pressures around labor availability, we anticipate that these solutions will evolve quickly to include more resources, constraints and planning sophistication.
Today, this market is limited to early-adopter customers that are willing to invest in early-stage technologies. As the solutions become more mature and robust, we anticipate more users looking to invest in these types of capabilities. We also find some of the warehouse control system vendors leading the thinking about real-time work planning and optimization, particularly around complex order/item picking and automated warehouses.
Labor planning is rapidly evolving and improving to help plan and allocate known work by resource, group work area and others. The most advanced systems now emerging, often called warehouse execution systems (WESs), focus on optimizing the release of work in highly automated warehouses. A very small number of vendors are now using AI and machine learning algorithms in warehousing. These nascent solutions seek to ensure that work released, in real time, into the warehouse is done to optimize the flow and minimize bottlenecks by routing to a hybrid of automated and nonautomated work areas.
User Advice: Because work planning offerings are nascent, a company’s warehousing maturity and risk tolerance will influence who is ready to adopt these capabilities. If you are risk-tolerant, are willing to adopt unproven technologies and desire improved planning and optimization, then discuss what capabilities your WMS vendor offers and/or what capabilities it is working on. If your vendor offers nothing and has nothing on its roadmap, then consider some stand-alone applications that do address forward planning.
Business Impact: As warehouse operations become more complex, the need for new sources of productivity gains will drive the demand for constraint-based planning concepts within warehouse management. Furthermore, without the emergence of new capabilities, given the maturity of WMSs and parity in core WMS capabilities across vendors, warehouse productivity gains eventually will stall. Warehouse resource planning will help drive higher degrees of warehouse labor and equipment productivity and help reduce warehouse labor costs.
Consider the following impact areas:
■ Risk: Moderate — Tools are nascent and functionally limited, but cost and complexity will likely remain modest, thereby reducing risk.
■ Technology intensity: Moderate — These capabilities layer on top of a WMS, so an extension and enhancement of functionality is not something new.
■ Strategic policy change: Low — Nonstrategic.
■ Organization change: Low — Minimal.
■ Culture change: Moderate — Logistics and warehouse management have historically not been good at planning; this will require a paradigm shift.
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This research note is restricted to the personal use of [email protected]. ■ Process change: Moderate — Logistics and warehouse management have historically not been good at planning; this will require a paradigm shift.
■ Competitive value: High — Issues with rising operating costs, labor constraints, increased velocity and customer service demands make doing warehouse planning well a source of competitive advantage.
Benefit Rating: High
Market Penetration: 1% to 5% of target audience
Maturity: Emerging
Sample Vendors: Blue Yonder; IAILabs; Logivations; Manhattan Associates; redPILOT; Softeon
Autonomous Mobile Robots Analysis By: Dwight Klappich
Definition: Autonomous mobile robots (AMRs), formerly called smart automated guided vehicles (AGVs) in previous Gartner Supply Chain Execution Hype Cycles, add intelligence, guidance and sensory awareness to conventional AGVs, allowing them to operate independently and around humans. These new types of AGVs address the historic limitations of traditional AGVs, making them better suited to, and more cost-effective for, complex warehouses and collaborative activities.
Position and Adoption Speed Justification: AMRs will continue to gain traction in complex distribution centers and AMRs will increasingly develop to take over functions historically performed by humans on lift trucks such as product put-away or forward-picking replenishment with little to no human intervention. As computing power has multiplied and the cost of sensors has declined, the power, flexibility and use cases for AMRs have grown while prices have come down leading to significant AMR market demand growth. However, while customer demand strengthens, resource availability to deploy AMRs is poised to become a barrier to growth. Gartner tracks over 50 AMR vendors that perform various warehouse tasks from simple transport moving goods from point A to B to more complex and sophisticated collaborative picking robots where the AMR supplement human labor. Market penetration is low overall with under 20,000 AMRs deployed commercially today, which when contrasted to the well over a million of lift trucks is a small market so far.
User Advice: Next-generation AMRs have become more autonomous and intelligent. They will transform warehouse operations over the coming decades. Costs and complexities will also come down, which will open up the market to more companies. Labor reductions seem the most likely drivers, but improvements in overall throughput and productivity will be the primary value, regardless of whether labor is reduced or not. Warehouse operations with a high volume of bulk (i.e., palette) product moves should consider some of the current generations of AMRs as an alternative or to supplement existing automation. Companies looking to build new automated facilities also should explore the potential value of these smart machines.
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This research note is restricted to the personal use of [email protected]. Business Impact: AMRs will continue to gain traction in complex distribution centers. The same technologies will emerge and also have applications outside warehouses as the technology matures. For example, in retail stores there is the potential that an AMR could unload trucks and deliver palettes of goods to specific departments in a store without human intervention. Smart AGVs will increasingly develop to take over functions such as product put-away or forward-picking replenishment with little to no human intervention. AMRs could also have a positive environmental impact as they reduce costs such as lighting, heating and air conditioning, because robots don’t need any of that.
Benefit Rating: Transformational
Market Penetration: 1% to 5% of target audience
Maturity: Emerging
Sample Vendors: 6 River Systems; Clearpath Robotics; Fetch Robotics; GreyOrange; Locus Technologies; Seegrid; Vecna
Recommended Reading: “Predicts 2020: Supply Chain Technology”
“Cool Vendors in Supply Chain”
“Innovation Insight for Autonomous Mobile Robots”
Sliding Into the Trough
Predictive Analytics in Supply Chain Execution Analysis By: Dwight Klappich
Definition: Predictive analytics in supply chain execution are capabilities used to model and simulate current and future logistics conditions, considering varying operating conditions to test future-state scenarios. Traditional operational planning solutions are prescriptive analytics, while predictive solutions are forward-looking and typically used for forecasting and iterative simulations, where variables and outputs are tested and compared.
Position and Adoption Speed Justification: Predictive analytics in supply chain execution (SCE) and the availability and use of forward-looking predictive modeling tools remain nascent and trail other areas of supply chain. Interest, however, is growing as logistics organizations are forced to look further into the future to plan around growing resource constraints. Most users, historically and today, built or build their own capabilities, using various generic analytical or simulation toolkits, most typically spreadsheets. A few transportation management system (TMS) vendors are adding forward-looking planning capabilities, such as freight forecasting, tactical planning and transportation modeling. While nascent in transportation, predictive analytics is embryonic in such other areas of logistics as warehousing and workforce management. Some vendors that provide raw simulation tools or generic optimization engines will likely create semipackaged vertical or functional templates based on the work they do with early-adopter clients. The barriers to broad
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This research note is restricted to the personal use of [email protected]. adoption will be the availability and inclination of data scientists to focus on SCE, and vendors building broader predictive analytics platforms instead of specialized applets.
User Advice: If your predictive modeling needs to align directly with your TMS, and you have to focus on forecasting and planning future transportation requirements, then direct your attention to your incumbent TMS provider. If the need is freight-related, but not aligned with the data housed in your TMS (such as traffic or economic data), then consider generic simulation and modeling tools, but expect to build your own solutions for the next few years. Partner with innovative incumbent SCE vendors to co-create SCE predictive analytics algorithms. Be prepared for a number of iterations before acquiring business value. For the near term, assemble your own toolkits of solutions to conduct various types of transportation-related predictive analytics. Outside of transportation, review offerings from your incumbent vendors, but recognize that, if your vendors are not innovative and leaders, you will likely have to build your own solutions using commercial toolkits wherever possible.
For warehousing, recognize that commercial offerings are newer and functionality is limited today, so align your expectations appropriately. Some of the labor management vendors are leading the way by building labor forecasting capabilities that, today, are largely done on spreadsheets. In highly automated warehouses, some of the material handling companies, warehouse control vendors and warehouse execution vendors are selectively adding some predictive modeling capabilities.
Business Impact: Consider the following impact areas:
■ Risk: Moderate — Tools will become prevalent, although expertise to set up and model for future-state conditions will be limited and problematic.
■ Technology intensity: High — Tools will be sophisticated and developed by experts, but users will need to develop skills to exploit the technology.
■ Strategic policy change: Medium — May require new policies with regard to information access, technology deployment and usage.
■ Organization change: Medium — Will likely require greater IT/operational technology alignment and resources to support additional technology.
■ Culture change: High — Logistics organizations are late to predictive analysis and the predominantly expediting culture must change.
■ Process change: High — Forward-looking analytics will significantly change how logistics organizations manage work processes due to increased decision making at the point of business activity.
■ Competitive value: Medium — Benefits will mostly be increased by productivity, more timely decisions and reduced errors, thus creating more internal advantages.
Benefit Rating: Transformational
Market Penetration: 1% to 5% of target audience
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This research note is restricted to the personal use of [email protected]. Maturity: Emerging
Sample Vendors: 4flow; Blue Yonder; E2open; Körber; LLamasoft; Logivations; Manhattan Associates; redPILOT; TransVoyant
Returns Management Analysis By: Simon Tunstall; Dwight Klappich
Definition: Returns management are software solutions that help manage the end-to-end returns process from connecting with consumers to processing and managing the return and ultimately executing the refund.
Position and Adoption Speed Justification: Returns management solutions help automate and manage the end-to-end returns process. This starts by providing consumers self-service connectivity to the returns platform to request a return. The platform then manages authorization, dispositioning, shipping, consolidating returns where possible, providing returns visibility while keeping customers informed, tracking updates and finally processing the refund. Leveraging business applications to support the returns management process is not new. In fact, over 15 years ago there were numerous first-generation vendors that built robust solutions to support the end-to- end returns process. However, it was too early then, and e-commerce needed to grow dramatically before the market for specialized returns management became sustainable. Virtually all the first- generation vendors ceased operations. It is only recently that a new wave of specialist vendors is beginning to emerge to cover significant aspects of returns management requirements.
Demand for robust returns management solutions is growing because returns are a significant and costly problem for companies, making returns a growing area of importance for retailers of all sizes as well as expanding into other industries. However, market penetration is still modest because, until recently, returns was a secondary consideration for most organizations, and little IT spending has focused on automating the returns process.
User Advice: Most organizations continue to live with labor-intensive, manual, often undisciplined and inefficient returns management (RM) processes because they prioritized supply-chain-related IT investments on outbound projects (e.g., order management and fulfillment), but this is changing rapidly. RM will become increasingly important. By redefining the return supply chain, companies can create significant opportunities to improve value and strengthen brand presence. To best integrate their returns management capabilities within the supply chain and related business functions, supply chain leaders should:
■ Determine which activities to prioritize for improvement by directing their team to conduct a detailed review of returns management operations from the ground up.
■ Gauge the current state of the company’s returns strategy, capabilities and technology needs.
■ Improve the maturity of the reverse supply chain by identifying areas of disconnect between reverse logistics operations, returns strategy and adjacent initiatives within the business.
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This research note is restricted to the personal use of [email protected]. Business Impact: By redefining the returns supply chain and implementing advanced returns management solutions, companies can create significant opportunities to improve value and strengthen brand presence while reducing costs and improving efficiency.
Benefit Rating: High
Market Penetration: 20% to 50% of target audience
Maturity: Early mainstream
Sample Vendors: Inmar; Newmine; Optoro; ReBOUND; Tech Mahindra (ReLoad solution)
Recommended Reading: “Gartner’s Framework for Developing Your Reverse Logistics and Returns Management Program”
“Optimize Your Operational Resources and Activities by Using Gartner’s Framework for Developing Your Reverse Logistics and Returns Management Program”
“Strengthen the Strategic Activities of Your Reverse Logistics and Returns Management Program by Using Gartner’s Framework”
“Manage the Impact of Adjacent Activities on Your Reverse Logistics and Returns Management Program by Using Gartner’s Framework”
Anti-Counterfeiting Technology Analysis By: Andrew Stevens; John Blake
Definition: Anti-counterfeiting technology (sometimes called brand protection) encompasses a diverse and broad spectrum of physical and software technology solutions targeting unique identification, advanced detection, physical security, risk mitigation and authentication. Solutions can ratify and verify a product’s physical status, condition and even its physical/chemical makeup, extending functionality out to levels of packaging and transportation assets.
Position and Adoption Speed Justification: Anti-counterfeiting technology solutions have traditionally been available as stand-alone or dedicated capabilities across various functions. They cover areas such as tamper-evident seals (at the packaging and product level), special physical identifiers (or coding) and increasingly integrated components working in combination for tracking, tracing and monitoring capabilities (especially in domains such as logistics and distribution). Solutions will need to adapt to meet demand for digital and Internet of Things (IoT)-based, end-to- end strategies across diverse product portfolios and connected networks of trading partners. This will inevitably increase risks associated with counterfeit products being introduced at various points and phase of a products “cradle-to-grave” product life cycle.
Historic solutions have tended to be domain-specific, very executional in their delivery and stand- alone capabilities. The new generation of more scalable and integrated anti-counterfeiting technologies are beginning to meet increasing demands for greater levels of innovation and
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This research note is restricted to the personal use of [email protected]. digitalization. They also are starting to evolve to meet and exceed expectations demanded by end users as part of market and brand protection strategies. Solution innovation is also continually being shaped by ever-increasing levels of sophistication and diversification in the quality and production and the delivery mechanism of counterfeit, fake, falsified or substandard products, data and information.
User Advice: Companies must first address existing foundational capabilities across planned and new end-to-end supply chain networks, especially in areas such as data quality, supply chain visibility and traceability. Detailed risk assessments should be made across all product criteria and transaction attributes to align with the correct choice and sequence of technology solution/ products. The number of layers of multiple anti-counterfeiting capabilities that would need to be applied is dependent on specific product attributes and mapped risks associated across each stage of the supply chain.
The deployment of anti-counterfeiting technologies should not be viewed as a single security solution. In many marketplaces, multiple layers or points of execution of anti-counterfeiting technology may be needed, including the authentication of events and transactions to be captured and translated electronically.
Representative examples of anti-counterfeiting solutions for supply chain include:
■ Product level: Nanotechnology markers, tracers, taggants, quantum dots, laser etching, direct marking, unique identification/fingerprinting, paper analytical devices, ultraviolet and spectroscopic scanning.
■ Printing and label level: Security inks, tamper indicating materials, micro text, covert and overt markers, traceable label substrates, label-image-based scanning, micro tags, smart labels, and peel and text.
■ Packaging configuration: Tamper-evident seals, special QR codes, holograms, tags (RFID), packaging aggregation, asset tracking, embedded and covert coding.
■ Embedded combinations: Embedded combinations of security and anti-counterfeiting features within labelling and packaging layers often at a nanoscale or covert (hidden) level or on product/ asset itself.
■ Chemical/biologic biometrics: Chemical sniffing and tasting technologies, facial recognition.
■ Data and digital level: Customer authentication portals and bar code scanning, digital fingerprints, encryption, and security algorithms.
Business Impact: The potential future markets for solutions will rely heavily on business objectives targeting robust product and asset risk assessments with continual mapping of these risks across end-to-end supply chain networks. The ability to be able to assess these risk criteria is often challenged by supply chain maturity and very fragmented levels of extended visibility, or interoperability, across the end-to-end supply chain. Anti-counterfeiting deployments should be managed through collaboration across impacted stakeholders in the supply chain. Digital transformation initiatives taking place across supply chains and renewed expectations around supply chain security and governance is placing a much stronger emphasis on measures for both
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This research note is restricted to the personal use of [email protected]. robust physical security and the ability to translate these events. This includes verifications into authenticated digital or unique signatures. Unique signatures (or fingerprints) can ultimately be shared digitally across trading partners (and end consumers) for ensuring a safe chain of custody of authentic products across interoperable networks. Many companies should now scope and plan across combinations of different kinds of anti-counterfeiting technologies to combat perceived and planned risks across specific marketplaces and at critical parts of the supply chain life cycle.
Benefit Rating: High
Market Penetration: 5% to 20% of target audience
Maturity: Adolescent
Sample Vendors: Applied DNA Sciences; Arjo Solutions; Digimarc; GeBe Cert; Incopro; NanoMatriX; safe79; Smartrac; Systech
Recommended Reading: “Supply Chain’s Role in Enhancing Traceability for High-Quality Pima Cotton”
“The 2020 Strategic Supply Chain Technology Trends”
“An Assessment of Global Regulations Across the Healthcare Value Chain Requiring Track and Trace With Serialization”
“An Assessment of Global Regulations Across the Healthcare Value Chain Requiring Product Authentication and/or Verification With Serialization”
“Serialization Regulatory Outlook for Anticounterfeiting and Fake Medicines Across the Healthcare Value Chain”
Real-Time Transportation Visibility Platforms Analysis By: Bart De Muynck
Definition: Real-time transportation visibility platforms complement the planning and executional capabilities of TMSs by providing real-time order and shipment visibility. These platforms are a core part of logistics technology and play a complementary function that supports transportation management, warehouse management, yard management and fleet management.
Position and Adoption Speed Justification: Supply chain visibility is no longer a “nice to have” for any organization, no matter the size, and now spans a multitude of vertical industries, use-case segments and geographies. When it comes to domestic transportation, customers are demanding more real-time visibility into in-transit shipments. This visibility existed in last-mile delivery scenarios for a number of years but for-hire transportation has struggled with a lack of proper visibility for loads once they leave the shipper or third-party logistics (3PL) provider’s warehouse.
In the past few years, a growing number of companies that specialize in providing real-time carrier information to the shipper and the 3PL community have entered the market. These companies can
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This research note is restricted to the personal use of [email protected]. be labeled as third-party real-time transportation visibility platforms. They provide real-time information on shipments from the carriers based on integration with the in-cab telematics systems, interaction via the carrier’s back-end systems or a driver smartphone app. These vendors have expanded their solutions to cover more modes of transportation as well as more regions. Supply chain leaders have visibility as a key priority on their investment agenda and have been executing on it with a variety of initiatives. Many Gartner clients from all types of industries have implemented these solutions in the past 12 months.
User Advice: End users should look into transportation visibility to create internal efficiencies especially given the recent disruptions. You should also provide real-time transportation visibility for your internal and external customers by identifying the best platforms for connecting to your carriers. End users should differentiate their selection based on the modes of transportation, regional coverage and size of the carrier network, as capabilities and vendors are different.
Business Impact: These real-time transportation visibility solutions can provide shippers, 3PL providers, brokers and carriers with a multitude of benefits in the areas of carrier management and transportation processes, as well as warehouse and yard efficiencies. They can also provide higher customer satisfaction and delivery service through proactive action when deviations occur from the plan (e.g., ability to update dock appointments) and updated ETAs to customers, allowing them to assess whether changes are needed. Shippers and 3PL providers can reduce costs by shortening detention/waiting times and/or fines for missing dock appointments, improve utilization of labor, warehouse and yard resources. They can provide real-time visibility provisioning to customers online rather than needing customer service representatives, reducing inventory through a reduction in safety stock based on greater trust in reliability of deliveries and creating backhauls through improved alignment of load timing. Shippers and 3PLs transportation teams can gain productivity to focus on value-add activities for the business instead of check calls, tracking and carrier communication activities to provide status updates.
Carriers can increase driving time and reduced detention times due to dynamic and more accurate dock scheduling (tighter windows) and avoid costs as services are mainly free for carriers versus EDI setup costs and ongoing charges.
Benefit Rating: Moderate
Market Penetration: 5% to 20% of target audience
Maturity: Adolescent
Sample Vendors: Blume Global; C.H. Robinson (TMC); Descartes; FourKites; project44; RateLinx; Shippeo; Sixfold; Tive; Trimble
Recommended Reading: “Market Guide for Real-Time Transportation Visibility Platforms”
“Smart Insights for the Real-Time Transportation Visibility and Monitoring Solution Market”
“Role of Real-Time Transportation Visibility Technology in Handling Logistics Challenges Created by COVID-19”
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This research note is restricted to the personal use of [email protected]. “Toolkit: RFP for Real-Time Transportation Visibility Platforms”
Serialization Analysis By: Andrew Stevens
Definition: Serialization solutions are comprehensive software (and increasingly hardware, too) solution stacks. Their origins are closely tied to regulatory requirements for anti-counterfeiting in the life sciences sectors. The evolution of solutions now supports cross-industry requirements, leveraging the foundations for data configuration/capture, serial number and coding generation (bar codes). It also supports enabling of digital interoperable exchange of key datasets across supply chain networks, chain stakeholders and third-party agencies.
Position and Adoption Speed Justification: A new generation of solutions are exploiting many of the serialization capabilities previously deployed to meet track-and-trace compliance mandates in the life sciences sector. They are extending capabilities from the serialization core to support objectives, including extended levels of visibility, traceability, anti-counterfeiting, asset tracking and product authentication. Solution providers continue to innovate and diversify with each retaining the core serialization engine and tools that form the foundations around data management and coding configuration. Recent momentum across a group of providers has allowed them to assess market opportunities across other industry sectors, especially in the food and beverage sector as well consumer products, chemicals and apparel. This recent shift to cross-industry, and the diversified nature of early extended value propositions for these serialization solutions, is reflective of the earlier positioning in the Hype Cycle compared to the more established regulatory solutions in life sciences.
User Advice: The comprehensive features of serialization solutions allow supply chains to establish layered data and governance foundations in which to address longstanding connectivity, communications and data exchange challenges. Embedded serialization infrastructure establishes greater opportunities to accelerate interoperability across diverse groups of supply chain stakeholders and position as an integration hub across legacy, established and planned technology. Serialization layers can also assist companies in remapping future end-to-end supply chain IT system architecture and interconnectivity. supplier/sourcing networks, and detailed mapping of risks, gaps and critical paths may also come into scope, especially in industries such a food and beverage.
Companies should revisit their enterprise-led, end-to-end IT system architecture and interconnectivity in the following areas:
■ Interoperable communication networks, including end-consumer engagement and interactivity.
■ The positioning of configured and integrated Internet of Things (IoT) applications to manage product and asset risks across the entire life cycle process.
■ Electronic hierarchies management (aggregation) across assets and products.
■ Multienterprise networks data, visibility and communications hub.
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This research note is restricted to the personal use of [email protected]. ■ Strategic collaborative initiatives and deployments focused on risk mitigation, especially for gray market, illicit trade, counterfeit or falsified products.
Business Impact: Companies should also assess serialization solutions data management and governance layers and supporting capabilities extending to operation hardware and technology architecture in the following areas:
■ Operational-line level for material flow, automation, scanning, routing and data capture through vision systems, camera technology and specialist visualization apps.
■ Robust architecture from which to extend real-time visibility, location tracking and condition- based monitoring (for example, cold chain) across critical phases of production, sourcing, distribution and customer fulfillment.
■ Final-mile logistics and customer fulfillment aligned to specific regulatory or trade management mandates and specific logistics or network communications infrastructures.
■ Targeted applications for product, asset and digital safety, transparency and security.
■ Data configuration, security and capacity capabilities of the bar codes, such as QR codes, 2D data matrix and RFID, and the value realization opportunities for that data.
Benefit Rating: High
Market Penetration: 5% to 20% of target audience
Maturity: Emerging
Sample Vendors: Acsis; Antares Vision; Kezzler; OPTEL; rfxcel; Systech; Zetes
Recommended Reading: “Market Guide for Track-and-Trace and Serialization Providers in Life Sciences and Healthcare Value Chain”
“The Importance of Identifying and Classifying Assets Across the Supply Chain”
“Supply Chain Operational Visibility Vendor Guide”
“An Assessment of Global Regulations Across the Healthcare Value Chain Requiring Product Authentication and/or Verification With Serialization”
“Serialization Regulatory Outlook for Anticounterfeiting and Fake Medicines Across the Healthcare Value Chain”
Warehouse Simulation and Modeling Analysis By: Dwight Klappich
Definition: Warehouse simulation and modeling tools use advanced mathematical methods, visualization, simulation and various software technologies to analyze and solve complex logistics problems to improve warehouse processes and decision making.
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This research note is restricted to the personal use of [email protected]. Position and Adoption Speed Justification: Warehouse simulation and modeling tools that apply mathematics and simulation to decision support problems within a warehouse are not new, but market penetration in end-user companies is minimal at this time. Historically, these tools were either used by consulting companies or system integration firms to help them model their customers’ current and future warehouse environments. The solutions offered advanced decision support techniques to improve warehouse operations such as 3D visualization, warehouse design, material handling automation design, seasonal reorganization of a warehouse, optimization of warehouse workflows, workforce planning and bottleneck analysis.
The power and sophistication of early generations of these systems required knowledgeable and skilled users and were often too complex for end-user supply chain organizations. This is why initial use was limited to dedicated experts. However, this is changing, and growth is anticipated in end- user supply chain organizations. First, vendors are refining the user interfaces of their offerings to make them more intuitive and easier to work with. Second, they are packaging some of the algorithmic power in their solutions, so companies don’t have to start from scratch to build initial models. Finally, because of the dynamic market that many supply chain organizations exist in today, some companies are developing internal expertise in solutions like these. 3PL companies are the most likely to adopt these solutions because they operate in many markets and can benefit from using these tools to model changing business conditions.
User Advice: While the need for these types of solutions is large, the market continues to be constrained by the amount of talent in warehouse environments. This talent is needed to pursue, select, implement, use and fully exploit these advanced decision support tools. Because for many years consulting companies offered services using these types of tools, this could be a good first step for many companies. Users might initially engage with a consultant or SI to build models but with the intent to learn the tools and how to employ the insights developed with the tools. Then, eventually, they might choose to bring these in-house so the company can own and adapt its models.
Business Impact: The long-term value will be maximized when these types of capabilities are instantiated within the day-to-day operating environment which demands flexible but packaged, automated, solutions. Companies that should consider warehouse simulation and modeling are those that are looking for more advanced decision support capabilities that go beyond the more rudimentary tools, like task interleaving, wave planning and basic BI, common today in WMS. Additionally, companies that are willing to develop and maintain internal expertise to exploit these types of advanced capabilities.
Benefit Rating: High
Market Penetration: 5% to 20% of target audience
Maturity: Adolescent
Sample Vendors: Emulate3D (Demo3D); IAILabs; Körber; Logivations; Slot3D; Xcelgo
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This research note is restricted to the personal use of [email protected]. Last-Mile Delivery Solutions Analysis By: Bart De Muynck
Definition: Last-mile delivery solutions enable the execution of the last mile, providing real-time communication between routing applications and drivers/vehicles to track their activities and locations and, when necessary, to reroute them in transit while on the go. These solutions are the next generation of delivery solutions, and mainly focused on last-mile deliveries to businesses and consumers, adding additional capabilities such as customer experience management.
Position and Adoption Speed Justification: Last-mile delivery solutions are an evolution of the more traditional dynamic and even batch-oriented fleet routing and scheduling (FR&S) grown due to the huge increase in e-commerce and last-mile deliveries. Whereas traditional routing solutions focused primarily on over-the-road fleets and movements for first mile, middle mile and last-mile to businesses, these new last-mile delivery solutions mainly focus on deliveries to consumer homes. Rudimentary real-time routing solutions are dispatcher-centric, having limited communication with drivers. These more robust last-mile delivery solutions are emerging that can automatically and proactively adapt to unforeseen events. For example, as traffic-monitoring solutions emerge and become pervasive, routing systems could receive notifications of traffic congestion that will delay drivers and may warrant rerouting. The system could dynamically recalculate the route and communicate the new route to drivers in real time. The goal is not only to make the fleets more efficient, but also to communicate updated ETAs with the consumer who is increasingly focused on the delivery experience when selecting an e-commerce or online retail vendor. It seems simple to just calculate new arrival times by indexing schedules based on the time of the delay (e.g., if one hour late leaving the previous stop, then just add one hour to the anticipated arrival time). However, this is overly simplistic, and leading vendors are working on algorithms that will recalculate the new arrival time based on other factors, such as time of day and current traffic patterns.
As businesses have become more dynamic and customers more demanding, companies need to balance the trade-offs between optimal and feasible routes that consider changes throughout the day as variables of change continue to increase and click to door times continue to decrease. As consumerism takes hold, meeting on-time appointment windows for delivery to home or office is becoming not only more important, but more plentiful and difficult. Consumers are seeking flexibility in delivery slots and are increasingly prone to changing the date and time of delivery according to their changing needs. E-commerce for certain products (e.g., grocery, meals, electronics and furniture) continues to grow rapidly, and companies’ ability to deliver to consumer time frames is challenged, adding stress to the capabilities of traditional solutions to plan (and deliver) within narrower time frames. Missed appointments require more dynamic updating of both routes and notification to customers of changed appointments. The solution also needs to manage the customer experience providing insights into the whole delivery cycle and use these insights to improve future deliveries.
Last-mile delivery solutions are increasing. These solutions are adaptations of traditional routing and scheduling, wherein a route could be replanned and a dispatcher would control the process. Many of these solutions use AI and machine learning to speed up the optimization process and predict occurrences and impacts based on real-time information. Support for pieces of this technology, such as automated vehicle locating, is becoming more mature and commonplace.
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This research note is restricted to the personal use of [email protected]. User Advice: Not all users will need last-mile delivery solutions, and traditional vehicle routing and scheduling solutions will suffice. Users that have high levels of change over the course of a delivery horizon or have a large focus on last-mile delivery to the consumer, are the best candidates for last- mile delivery solutions. Users should define their specific use cases before investigating solutions to ensure the solutions they consider fit the needs of their operations.
Business Impact: Last-mile delivery solutions will not only provide benefits to e-commerce companies and other shippers focused on last mile but can also add incremental benefits to mature users of routing and scheduling, further reducing costs and improving customer service in dynamic environments. Less mature users and more traditional industries that do not focus on the last mile should start with traditional vehicle routing and scheduling tools that are mature and proven.
Benefit Rating: High
Market Penetration: 5% to 20% of target audience
Maturity: Adolescent
Sample Vendors: Bringg; Descartes; FarEye; Locus; LogiNext; Onfleet; ORTEC; Paragon; Quintiq; Wise Systems
Recommended Reading: “Market Guide for Vehicle Routing and Scheduling”
“Key Technology Trends and Considerations for Vehicle Routing and Scheduling Applications”
“Toolkit: RFP for Vehicle Routing and Scheduling”
“The Need for Multispeed and Sustainability in Retail’s Last Mile”
Supply Chain Convergence Analysis By: Dwight Klappich
Definition: Supply chain convergence is where supply chain functional silos are broken down and end-to-end business processes span, synchronize and optimize across traditional functional domains.
Position and Adoption Speed Justification: Supply chain convergence refers to the growing need for supply chain organizations to do a better job of orchestrating and synchronizing processes, subprocesses and activities across supply chain (e.g., customer service, warehousing, transportation and manufacturing) functional domains. End-to-end (E2E) processes like order-to- cash or procure-to-pay span functional and application boundaries, as well as outside the enterprise for procurement, sales and customer service.
Convergence is a concept Gartner first published in 2008, but it was too early at that time. Most companies continue to this day to organize, manage, buy and implement systems vertically by functional domain.
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This research note is restricted to the personal use of [email protected]. Early stages of supply chain management (SCM) application convergence are underway, with certain technology vendors building analytical umbrellas over the top of functionally siloed application suites. Some vendors that offer multiple SCM applications are building data and process integration among their various applications. However, these are steppingstones to the more robust convergence that will enable synchronization and optimization of E2E processes. As some leading SCE vendors migrate their applications to true microservices architectures, we see the beginnings of the right platforms to drive convergence forward.
User Advice: Supply chain organizations recognize that, to get to Stage 3 supply chain maturity and beyond, they must embrace convergence as both a business and an IT vision and integrated strategy. Today, companies struggle to systematically integrate E2E business processes in the fragmented supply chain functional and IT environments prevalent in most organizations. At best, companies pass data back and forth between applications, but coordinating, let alone optimizing, E2E processes across application silos remains elusive.
SCM organizations must break down functional silos by assembling composite processes that bring together subprocesses and activities across specific domains. The urgency to pursue convergence grows as companies seek Stage 3 supply chain maturity or higher, and as new business models (like digital) drive transformational change. Functional areas (like manufacturing, logistics, sourcing and customer service) should evaluate how fundamental operational processes are linked with and affected by processes that are controlled by other functional groups and systems within and outside their organizations. A key first step will be to break down the departmental or functional barriers within and between organizations. Then the second step will be to automate these new processes to ensure that they are instantiated in the business.
Supply chain maturity and supply chain convergence attainment are closely aligned, wherein higher- maturity organizations are more likely to address the cultural and operational issues necessary to reach higher levels of convergence.
Business Impact: New opportunities for process improvement will require organizations to adapt their cultures and operational environments to enable coordination and synchronization of E2E processes, such as selling, buying or making. This will require supply chain capabilities and systems to converge across and between traditional SCM functional silos.
Consider the following impact areas:
■ Risk: Moderate — Tools are nascent, but the value of convergence far outweighs the risk.
■ Technology intensity: Moderate — Technical complexity sits on the vendor’s shoulders, reducing the technical complexity for users.
■ Strategic policy change: Moderate — SCE organizations must adapt their cultures and operational environments to enable coordination and synchronization of E2E processes.
■ Organization change: Moderate — The first step toward convergence requires companies to shift their paradigms from a vertical (functional) view of the world to a horizontal (E2E process) view of the world.
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This research note is restricted to the personal use of [email protected]. ■ Culture change: High — Low-stage-maturity organizations will struggle to break the contentious functional bias inherent in many supply chain organizations in order to have any hope of evolving to convergence.
■ Process change: High — Processes are horizontal even if most organizations remain vertical, so once a company makes the commitment to think horizontally, aligning processes will be straightforward. If the company cannot think horizontally, then converging processes will remain problematic.
■ Competitive value: High — Convergence will drive the next wave of business value, and early adopters will be able to leverage dramatic process improvements to gain a competitive advantage.
Benefit Rating: Transformational
Market Penetration: 5% to 20% of target audience
Maturity: Emerging
Sample Vendors: Bringg; Deposco; E2open; Manhattan Associates; Oracle; SAP; Softeon
Recommended Reading: “Unify End-to-End Supply Chain Processes With Supply Chain Convergence”
Ring Scanner Analysis By: Leif-Olof Wallin
Definition: This small bar code scanner can be worn as a ring on top of one or two fingers. Its placement enables workers to use both hands and to scan at the same time. The scanner uses a laser scanner or imager, and is connected through wires, or wirelessly using Bluetooth, to a handheld or mobile computer.
Position and Adoption Speed Justification: Ring scanners have been around for a long time. Recent developments in LED and low-power Bluetooth technology have improved capabilities and battery life significantly and have opened up new opportunities for the technology. Ring scanners can be used independently, replacing conventional scanning, while increasing in multimodal use when they’re combined with technologies such as voice or smartglasses.
User Advice: Ring scanners have been around for a long time. Recent developments in LED and low-power Bluetooth technology have improved capabilities and battery life significantly and have opened up new opportunities for the technology. Ring scanners can be used independently, replacing conventional scanning, while increasing in multimodal use when they’re combined with technologies such as voice or smartglasses.
Business Impact: The technology is highly relevant for organizations with warehousing and logistics operations, such as pick/pack/ship, as well as those with select use cases in travel, transportation and hospitality that involve scanning.
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This research note is restricted to the personal use of [email protected]. Benefit Rating: Moderate
Market Penetration: 20% to 50% of target audience
Maturity: Early mainstream
Sample Vendors: Datalogic; Eurotech; Honeywell; Zebra Technologies
Climbing the Slope
Warehouse Control Systems Analysis By: Dwight Klappich
Definition: Warehouse control systems (WCSs) are software that functions like integration middleware sitting between cyber-physical material handling equipment (MHE) and business applications like warehouse management system (WMS) or warehouse execution system (WES). The WCS translates and communicates business application transactions into instructions to the MHE to orchestrate product movements within an automated warehouse.
Position and Adoption Speed Justification: WCSs primarily translate business-oriented instructions into forms that are meaningful to MHE. Furthermore, the WCSs coordinate material- handling subsystems, such as conveyor belts, carousels, scales, sorters, shuttle systems, and storage and retrieval systems.
WCSs are not new; there have been narrowly focused solutions for years. These were proprietary solutions designed to exclusively work with a specific MHE vendor’s equipment. WCSs are becoming more generic; vendors now offer WCSs that can communicate with a variety of MHE products. WCS is undergoing an evolution, moving away from its middleware focus to where some solutions now offer more comprehensive business process logic. The role of WCSs has expanded to include such additional capabilities (other than just automation control) as descriptive and predictive analytics, event management, diagnostics and, increasingly, businesslike logic, such as picking. Adoption of traditional MHE-centric WCSs is high; adoption of newer, more ubiquitous and broader WCSs now offered by leading vendors is minimal but growing.
WCS will evolve along three paths:
■ Equipment manufacturers and MHE system integrators will continue to offer WCS as operational technology (OT) embedded within their automated systems. For users who use only a particular manufacturer’s MHE, this will remain a preferred approach.
■ Some WMS/WES vendors will embed WCS within their WMS/WES. This would be an option for customers that will likely use MHE from multiple providers.
■ Stand-alone WCS vendors will offer holistic and independent WCS that can integrate with multiple WMS and multiple MHE solutions. This last option will be most likely for companies whose WMS does not have embedded WCS, and that have multiple vendors providing MHE.
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This research note is restricted to the personal use of [email protected]. This innovation profile primarily focuses on the third category of ISV WCS providers.
User Advice: Companies building new automated facilities should familiarize themselves with best- of-breed WCS solutions, as well as those that might be offered by their chosen MHE provider. Companies with existing automated warehouses that are struggling to maintain automation integrations — or those that have added or changed their MHE over the years — should consider a stand-alone WCS to ease the integration burden.
Business Impact: At a minimum, a WCS eases the maintenance burden of integrating a WMS with automation. As WCSs continue to evolve, additional business benefits will emerge from the analytics and event management capabilities embedded in the WCS.
Consider the following impact areas:
■ Risk: Moderate — Tools are prevalent, although expertise to set up and maintain systems is limited and problematic.
■ Technology intensity: Moderate — Focus and scope are very narrow in highly automated facilities where expertise exists.
■ Strategic policy change: Low — Nonstrategic.
■ Organization change: Low — Minimal and tied to automation, which has more impact than WCS.
■ Culture change: Low — Minimal and tied to automation, which has more impact than WCS.
■ Process change: Low — Minimal and tied to automation, which has more impact than WCS.
■ Competitive value: Low — Minimal and tied to automation, which has more impact than WCS.
Benefit Rating: Moderate
Market Penetration: 20% to 50% of target audience
Maturity: Early mainstream
Sample Vendors: Dematic; Fortna; Körber; Pyramid (Matthews’ Automation Solutions); QC Software; SAP; Tompkins International; VARGO
Recommended Reading: “Warehousing and Fulfillment Vendor Guide”
“Select From the 8 Software Deployment Options to Support Warehouse Automation and Robotics”
Global Logistics Visibility Analysis By: Oscar Sanchez Duran; C. Klappich
Definition: Global logistics visibility improves the connectivity, interoperability and visibility of events across facilities, multiple transportation modes, suppliers, customers and logistics service
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This research note is restricted to the personal use of [email protected]. providers. This technology enables companies to monitor international logistics events throughout an entire multileg shipment itinerary to detect event-driven problems early enough to notify recipients and address possible threats.
Position and Adoption Speed Justification: Global logistics visibility applications are maturing, and while data quality has improved over the past years, there are still areas in which visibility and connectivity remain poor — specially around ports and terminals. Newer visibility platforms and the integration of different systems such as GTM and TMS are making it easier to correlate the information received through the different parties. However, connecting to carriers and other constituencies — such as suppliers, forwarders, brokers and third-party logistics (3PL) companies — remains difficult. EDI continues to be the dominant way for companies to connect with trading partners. The use of API technology within global logistics visibility is increasing, with many already having this technology in their products and others considering in its roadmap. Additionally, initiatives like IATA’s ONE Record, which promotes the concept of a virtual shipment record accessible through API technology and which moves away from the peer-to-peer messaging model, should further facilitate connectivity between parties involved in global trade in a near future.
User Advice: Midsize and large international shippers (those with 1,000 or more containers per year) in dynamic international logistics environments will benefit from improved visibility. Early adopters of stand-alone solutions should consider on-demand global logistics visibility solutions, where upfront costs are minimized. Transportation management system (TMS) users should first consider the visibility solutions offered by their providers, only considering stand-alone solutions when their TMS vendors lack a visibility offering or when their offerings are inadequate. Users looking for true end-to-end visibility across locations, processes and data types should look for generic tools that can support this breadth of use. Users looking for real-time visibility beyond event-driven visibility should look for specialized real-time visibility applications that can connect to vessel AIS satellite systems, airline systems and IoT devices. However, they should plan multiphase roll outs to ensure they address the numerous potential hurdles that will crop up for engagements of this size and scope.
Business Impact: Given the increased risk of managing a global supply chain, the visibility of potential problems is critical to managing global logistics operations effectively. Sensing and responding to events are critical aspects of supply chain visibility, but visibility alone provides only incremental value. Although visibility can identify and diagnose problems, it cannot resolve them. The value of visibility increases when it is integrated with other applications, such as TMS, warehouse management system (WMS), order management, supply chain planning and ERP, where problems can be identified, diagnosed and resolved in a single environment. However, true end-to- end visibility that spans transportation, inventory, orders, multiple modes of transport (such as land and ocean) or multiple functions (such as transportation and trade compliance) is less mature. End- to-end visibility also often requires multiple applications to be “stitched together” or, at the very least, disparate data sources are pulled into one visibility application.
Benefit Rating: Moderate
Market Penetration: 5% to 20% of target audience
Maturity: Early mainstream
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This research note is restricted to the personal use of [email protected]. Sample Vendors: Blume Global; Descartes; E2open; FarEye; Infor; LOG-NET; TransVoyant
Recommended Reading: “Magic Quadrant for Transportation Management Systems”
“Plan for and Use Supply Chain Visibility Capabilities in Close Alignment With Maturity Stages”
“Supply Chain Operational Visibility Vendor Guide”
“Supply Chain Brief: Getting Ready for Multienterprise Business Network”
“How to Use Technology to Increase International Visibility in Times of Crisis”
“Market Guide for Global Trade Management”
Indoor Location for Assets Analysis By: Tim Zimmerman; Annette Zimmermann
Definition: Indoor location for assets provides information about the physical, interior location of fixed or mobile devices, wearables or other objects. This information is derived from different algorithms that use Wi-Fi, 5G as well as overlay infrastructures that include one or more of technologies, such as Bluetooth, very high frequency (VHF), ultrahigh frequency (UHF), ultrawideband (UWB), ultrasound, geomagnetic, sonar, visible light communication (VLC), infrared (IR) or lidar.
Position and Adoption Speed Justification: Indoor location for assets addresses the need to locate fixed or mobile assets whether they are static, can be moved within a defined zone (zonal) or need to be monitored all the time (real-time location system [RTLS]). Asset location is applicable to many industries and the granularity needed for tracking will vary depending on the vertical market and the specific end user. Gartner sees a lot of client traction in healthcare as well as all IT asset management as enterprises struggle to keep track of critical assets.
The technical ability to track assets in any of the use cases is very stable but implementers have struggled looking for a “one size fits all” technology which does not exist for the different assets in varied use cases across a wide number of markets. Recently, we have observed vendors providing an integration platform that allows multiple technologies to be integrated into a single platform that delivers “x,y,z” coordinates. Capabilities have been expanded beyond the core competency of single vendors as strategic partnerships allow vendors to contribute to a common platform that can be used for application development.
While SDKs exist for application development, complete end-to-end solutions are slow to develop as siloed solutions are replaced. In some markets such as healthcare, end users may have as many as three to five different technologies and different vendor point-level solutions can now be combined into a single architecture.
User Advice: Enterprises using location information for line-of-business vertical markets such as retail, healthcare, manufacturing, supply chain and office environments, and in service sectors, must
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This research note is restricted to the personal use of [email protected]. know how it will be used and the granularity needed to make the required business decision. They must evaluate both the indoor location technology capabilities and business cases since the characteristics of the environment will determine the type of technologies that are viable to achieve the business outcome.
Enterprises should look at end-to-end solution providers that have the ability to provide a location service engine that locates assets as defined by one or more use cases to the granularity necessary to achieve the desired business outcome. Look for more than anonymous flow analytics or proximity since they provide limited value. Look for 1-meter (3-feet) accuracy using one or more technologies to achieve the desired granularity as well as movement of the asset.
End-user applications can be complete end-to-end solutions that include the application, applications developed either internally using vendor SDKs, published APIs or developed by ecosystem partners with vertical market expertise.
Business Impact: Results from audits show as much as 30% of assets are missing. In some vertical markets such as healthcare, nurses spend an hour per shift looking for assets. In industrial applications, looking for data collection equipment that has been set down in the middle of a shift can cause similar loss of productivity.
In addition to being able to keep track of assets, location tracking can eliminate the need for excess equipment. Fifty percent of enterprises in a recent survey noted that they take inventory of their assets annually but 23% noted that they had not updated their inventory in the last five years. Missing assets are often being depreciated and taxed which is costing millions of dollars annually.
Location tracking of materials and tools can also provide process optimization information in manufacturing environments. Knowing when an asset arrived at the workstation, in addition to assuring that the right tools were there, can assist in time and motion studies as well as workflow optimization.
Benefit Rating: High
Market Penetration: More than 50% of target audience
Maturity: Mature mainstream
Sample Vendors: AiRISTA Flow; CenTrak; Cisco; Hewlett Packard Enterprise (Aruba); Juniper Networks; Midmark; Quuppa; Sonitor Technologies; Zebra Technologies
Recommended Reading: “Market Guide for Indoor Location Application Platforms”
“Magic Quadrant for Indoor Location Services, Global”
“Critical Capabilities for Indoor Location Services, Global”
“Cool Vendors in Location Services and Applications”
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This research note is restricted to the personal use of [email protected]. Carrier/Supplier Appointment Scheduling Analysis By: Dwight Klappich
Definition: Carrier/supplier appointment scheduling refers to the use of web-based portals to help automate appointment management and improve the overall use of shipping and receiving docks in distribution centers. In this system, carriers or suppliers can log on through the portal to view a dock calendar to identify delivery or pickup slots, which they can then book online. Carriers, customers, suppliers and company users can query the system to determine open dock times available for pending shipments or receipt requests.
Position and Adoption Speed Justification: Carrier appointment scheduling applications typically offer basic calendar time slot query and allocation, plus rules and constraints such as equipment dock compatibility, receiving versus shipping calendars and unload rules.
There are some stand-alone appointment scheduling tools, but many users choose to source this capability as part of their TMS. In addition, SaaS-based offerings are gaining momentum. Most current offerings use web portals to request appointments, but the increasing acceptance and availability of mobile applications offer the potential to move this closer to drivers and mobile assets. Moreover, mobile applications add capabilities such as geofencing, wherein a GPS device notes when a truck is within a certain distance of the distribution center and the appointment can then be electronically confirmed. The use of real-time visibility solutions is also providing additional visibility as to when a vehicle is approaching a location, which can contribute to more dynamically updating and rearranging appointments.
User Advice: If you use a commercial TMS and are looking for basic carrier appointment management capabilities, then first look at your existing TMS to determine the capabilities that it offers and whether the solution fits your needs. If the system does suit your requirements, there are notable advantages in having this capability integrated with the rest of the TMS. If you are evaluating a TMS — even if appointment scheduling is not part of the initial project — then review what various vendors offer for your future consideration. If you do not have a TMS, or if your current TMS lacks reasonable capabilities, then consider one of the stand-alone offerings.
Business Impact: Carrier appointment scheduling (such as dock scheduling) reduces the amount of administrative time that is required to set carrier appointments and manage dock schedules. If managed properly, this approach can improve relations with an enterprise’s carriers, customers and suppliers because the system can be more responsive than manual processes. Scheduling and appointment management can improve the overall throughput and capacity of a warehouse by optimizing appointments and activities. It also can help reduce operating labor costs by reducing idle time as well as help lower transportation costs by increasing the number of cross-docking opportunities.
Benefit Rating: Low
Market Penetration: 5% to 20% of target audience
Maturity: Early mainstream
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This research note is restricted to the personal use of [email protected]. Sample Vendors: Blue Yonder; BluJay Solutions; Bringg; C3 Solutions; FourKites; Manhattan Associates; One Network Enterprises; Oracle; SAP
Recommended Reading: “Warehousing and Fulfillment Application Vendor Guide”
“Magic Quadrant for Transportation Management Systems”
Appendixes
Figure 3. Hype Cycle for Supply Chain Execution Technologies, 2019
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This research note is restricted to the personal use of [email protected]. Hype Cycle Phases, Benefit Ratings and Maturity Levels Table 1. Hype Cycle Phases
Phase Definition
Innovation Trigger A breakthrough, public demonstration, product launch or other event generates significant press and industry interest.
Peak of Inflated During this phase of overenthusiasm and unrealistic projections, a flurry of well-publicized Expectations activity by technology leaders results in some successes, but more failures, as the technology is pushed to its limits. The only enterprises making money are conference organizers and magazine publishers.
Trough of Because the technology does not live up to its overinflated expectations, it rapidly becomes Disillusionment unfashionable. Media interest wanes, except for a few cautionary tales.
Slope of Focused experimentation and solid hard work by an increasingly diverse range of Enlightenment organizations lead to a true understanding of the technology’s applicability, risks and benefits. Commercial off-the-shelf methodologies and tools ease the development process.
Plateau of Productivity The real-world benefits of the technology are demonstrated and accepted. Tools and methodologies are increasingly stable as they enter their second and third generations. Growing numbers of organizations feel comfortable with the reduced level of risk; the rapid growth phase of adoption begins. Approximately 20% of the technology’s target audience has adopted or is adopting the technology as it enters this phase.
Years to Mainstream The time required for the technology to reach the Plateau of Productivity. Adoption
Source: Gartner (June 2020)
Table 2. Benefit Ratings
Benefit Rating Definition
Transformational Enables new ways of doing business across industries that will result in major shifts in industry dynamics
High Enables new ways of performing horizontal or vertical processes that will result in significantly increased revenue or cost savings for an enterprise
Moderate Provides incremental improvements to established processes that will result in increased revenue or cost savings for an enterprise
Low Slightly improves processes (for example, improved user experience) that will be difficult to translate into increased revenue or cost savings
Source: Gartner (June 2020)
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This research note is restricted to the personal use of [email protected]. Table 3. Maturity Levels
Maturity Level Status Products/Vendors
Embryonic ■ In labs ■ None
Emerging ■ Commercialization by vendors ■ First generation
■ Pilots and deployments by industry leaders ■ High price
■ Much customization
Adolescent ■ Maturing technology capabilities and process ■ Second generation understanding ■ Less customization ■ Uptake beyond early adopters
Early mainstream ■ Proven technology ■ Third generation
■ Vendors, technology and adoption rapidly evolving ■ More out-of-box methodologies
Mature ■ Robust technology ■ Several dominant vendors mainstream ■ Not much evolution in vendors or technology
Legacy ■ Not appropriate for new developments ■ Maintenance revenue focus
■ Cost of migration constrains replacement
Obsolete ■ Rarely used ■ Used/resale market only
Source: Gartner (June 2020)
Gartner Recommended Reading Some documents may not be available as part of your current Gartner subscription.
Understanding Gartner’s Hype Cycles
Warehouse and Fulfillment Vendor Guide, 2018
Magic Quadrant for Warehouse Management Systems
Magic Quadrant for Transportation Management Systems
Cool Vendors in Supply Chain Execution Technologies
Evidence Results presented are based on Gartner’s Supply Chain Technology User Wants and Needs survey conducted between November 2019 and December 2019 to explore the role technology plays in supply chain, how supply chain organizations leverage technology for competitive advantage and
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This research note is restricted to the personal use of [email protected]. their views on exploiting as well as investing in supply chain technology. A sample of 350 respondents completed a web-based survey, with the organizations qualified according to their industry, annual revenue of their organization being $100M and above. The sample mix by region was North America (40%), Western Europe (40%) and APAC (20%). Respondents were required to be a manager and above, as well as their involvement in decisions regarding supply chain management (SCM) processes, strategy and supporting technology was needed. The survey was developed collaboratively by a team of Gartner analysts who follow the IT market and was reviewed, tested and administered by Gartner’s Research Data Analytics (RDA) team.
Disclaimer: Results do not represent “global” findings or the market as a whole but reflect the sentiment of the respondents and companies surveyed.
More on This Topic This is part of an in-depth collection of research. See the collection:
■ 2020 Hype Cycle Special Report: Innovation as Strategy
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