What does it take to strengthen supply chains today?

When planning a sea voyage in the 17th century, sailors and merchants in London sought guidance from an insurance company to predict and plan for the fate of their upcoming trips. The company, in this early iteration of predictive modeling, used information about past travels (did a ship on a similar route make it on time? Or at all?) to calculate future risks.

So while the idea of predictive modeling may not be a recent concept, today, the Internet of Things (IoT) is supercharging its powers. Tiny sensors and softwares are turning physical objects like vehicles, machinery, and inventories — all the various parts of a supply chain — into smart objects that talk to each other with unprecedented amounts of data-exchange between them. These sophisticated infrastructures produce results at a level that our 17th century sailors could never have imagined. Like instantly identifying breakdowns in a supply chain or even generating pricing based on it in real-time.

It’s not a one-way street, either. As data gets collected about consumer behavior, businesses are finding ways to address the specific quirks that make each customer unique, and then using predictive modeling to adapt to it. In that way, consumer IoT devices open up windows to a customer’s soul – and wallet. A new wave of product innovations is hyper-personalized, like new AI-powered walking shoes. Still in development, these shoes collect data about the shoe-wearer’s gait in real-time and adjust, helping people go up to three times faster than their regular walking pace. Since no two customers walk the exact same path, should their shoes be identical? The 40% of customers who wish brands knew more about their preferences are waiting for an answer.

An unpredictable world has kept predictive technology timeless. The full extent of its applications will unfold as more and more businesses wield it to not only predict risks but also opportunities.

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