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Following the industrial revolution, over the last 35 years the supply chain has gone through a linear evolution process, spanning material requirements planning (MRP), manufacturing resource planning (MRP II), distribution requirements planning (DRP), lean, vendor managed inventory (VMI), collaborative planning, forecasting and replenishment (CPFR), and business-unit centric planning. These improvements were successful and appropriate as supply chains evolved, but companies today are operating in a new world. The very backbone of the supply chain has been shaken by the digital revolution, which is characterized by innovations such as the Internet of Things (IoT), 3D printing, robotics, machine-to-machine communication, and demand sensing, among other things. As supply chains merge with IoT and big data, the one-size-fits-all, linear supply chain that “buys, makes, moves, stores and delivers” products to all customers and channels in the same lean and operationally efficient way (referred to as Mode 1) is becoming archaic and no longer adequate for future success (see Figure 1).

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Real-time insight via IoT is the new competitive battleground for consumer goods companies looking to increase efficiencies and improve the customer experience

As the recent collapse of Hanjin Shipping – leaving cargo worth an estimated $14 billion stranded on ships barred from ports and more than 8,000 cargo owners in limbo – showed, we are in an era of unprecedented disruption to the traditional supply chain. Consumer goods companies have to contend with a perfect storm of increasingly stringent regulation, more agile competitors, emerging technologies, and rapidly-changing consumer behaviors. It is increasingly clear that a smarter, more adaptive approach to supply chain operations, built on real-time data, is needed to address the new challenges being posed.

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Operational Excellence: a term used ubiquitously across industry, but what does this really mean? What is excellence? Perhaps we can define excellence as the following:

1. Excellent results
2. Excellence in operational processes

The former is evidence of current operating conditions and the latter implies that the future will replicate the current performance success. In sports, we see the “one hit wonder” team that wins the championship only to sink back into years of mediocrity, while another team is a perennial competitor. It’s the perennial contender who has good processes/culture/philosophies that assure a continually well run organization.

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With their need for visibility and fast decisions, supply chains must adopt new technology quickly or risk falling behind the competition. In fact, effective supply chains depend on technology more than almost any other area of a business. Here are top technology trends that are changing the supply chain:

Richard JonesThe Internet of Things (IoT) is defined as a network of physical objects or "things" embedded with electronics, software, sensors and network connectivity. These enable the IoT things to collect and exchange data remotely across existing network infrastructure.

The IoT has been billed as the next Industrial Revolution because of the impact it will have on the way governments and businesses interact with the world, and on how it will influence the way consumers will live, work, entertain and travel.

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