Chatbots An Unexpected Interest For Supply Chain Professionals

In supply chain management, globalization, geopolitical forces and increased demand for greater transparency have organizations looking at cutting-edge technology to boost performance and cut risk. Analysts have been discussing some of these technologies for some time. Blockchain, for example, is now a common topic in conversations surrounding supply chain innovation.

But here’s a technology you may not have expected to also be an up-and-coming focus for the supply chain: chatbots.

In corporate finance, chatbots are gaining steam in areas like banking and accounting. But a new report from eft finds that as companies explore automation and blockchain to better manage supply chains, they are also taking a close look at chatbot technology

To highlight this trend, eft pointed to some historical data in its Hot Trends in Supply Chain report: 79 percent of businesses said they were not engaging with chatbots in any capacity in Q4 2016. Fast-forward to Q2 2017, and now the majority, 51 percent, say they are, in fact, engaging with chatbots.

“This might not be the year of the chatbot, but we’re certainly a step closer,” eft remarked in its report.

According to Haley Garner, head of research and digital content at eft, this was one of the most surprising findings of the company’s latest Hot Trends in Supply Chain report.

“Chatbots are surprising because they’re a non-traditional supply chain technology,” he recently told PYMNTS. “The fact that they’re being looked at by so many companies speaks to the “consumerization’ of supply chain operations and the customer-centric approach supply chains need to take in this day and age.”

Garner explained that there are two key factors behind this rise in chatbot interest among supply chain professionals.

“Firstly,” he said, “eCommerce is transforming how customers order goods, both B2B and B2C. This has meant that the supply chain is more and more the first point of contact for the customer, rather than such touch points as the retail store. This has made the supply chain instrumental in the customer journey;  purchasing decisions are now dictated by such things as delivery cost and inventory levels.”

Chatbots enable businesses to relay this type of information to their customers, both corporate and consumer, more effectively, he added.

“Secondly, there has been a broad trend to ‘work like you live,’ driven by things like the cloud, the ‘appification’ of work processes, etc,” Garner said. “As a consequence, chatbots are also serving a role in helping internal customer service. That is, providing information to employees within organizations across silos.”

For now, it’s likely that chatbots will take on only the simplest of tasks for employees when it comes to supply chain management. Even in other areas of the enterprise, like banking and accounting, chatbots are thus far able to handle the most straight-forward tasks. But just as consumer-facing chatbots are progressing to handle more complex requests and demands, chatbots in the enterprise may be able to do the same for supply chain management.

That journey of technological innovation isn’t reserved for chatbots, either. In its report, eft also found that blockchain continues to become an increasingly important piece of the supply chain management puzzle.

More than two-thirds of those surveyed by eft said the biggest impact of blockchain on supply chain management is in the area of data interchange. Again, eft turned to historical data to emphasize how much the enterprise has begun to open its eyes to the potential of blockchain: more than 52 percent of survey respondents said they were not engaging in blockchain at all in 2016. In 2017, more than 61 percent said they are, in fact, looking at blockchain.

This, too, was a surprise to Garner.

“The surprise stems from the fact that there are so few actual examples of blockchain being used in supply chain today,” he said.

“Blockchain has yet to have an impact on supply chain, so from that perspective, having so many companies take it seriously is quite interesting,” Garner continued. “It might suggest that the technology is gaining traction for wider adoption.”

According to Garner, eft believes that the true potential in blockchain, when it comes to supply chain management, is within public blockchain.

“A public blockchain could really change how real-time data interchange is conducted through such mechanisms as automated execution,” he said. But, he added, blockchain is but one potential technology that can disrupt supply chain management and empower organizations with the data management capabilities they need.

Instead, said Garner, another technology has been able to achieve a goal of “speed, agility and accuracy.”

“At the moment, APIs are having an immediate transformative effect on this process,” he said.

While chatbots and blockchain may be on the cutting edge, in addition to APIs, automation has similarly been able to make a tangible impact on how supply chains are managed and monitored today. Already, companies say digitalization has shifted organizations supply chain management strategies: eft’s report found a change in hiring strategy was cited as the most important step to achieve digital transformation, followed by an update in legacy systems and investment in cutting-edge technology.

“Automation is critical for any organization operating in the supply chain to stay competitive. This comes down to the need for real-time processes, accuracy, efficiency, cost-savings and agility amongst other things,” Garner explained.  “As such, companies have been comfortable with automation for a long time.”

While eft’s report suggests corporates are largely tuned in to the innovations that may be disrupting their supply chains, Garner also highlighted one concerning statistic that highlights organizations’ gap in embracing tech.

“It was also surprising to see that 19 percent of companies had not changed their overall strategy in light of technological advances,” he pointed out. “It seems like a risky proposition to take, given the pace of change in today’s industry.”