Supply Chain

The Next 5 Years Will Change Supply Chain Management

Categories: BCO/Shipper.

Supply chain management is undergoing a significant transition that will change the face of shipping and logistics. Companies who aren’t starting to plan for digitization aren’t going to recognize the industry in the years to come.

In 2017′s annual survey on next-generation supply chains, MHI found that 80% of respondents believe the digital supply chain will be the go-to model within the next five years.

3PL providers are quickly adjusting to compensate for new market pressures. Many of the processes that have for decades been guided by intuition are now being redefined and perfected by data analysis and cutting-edge technology.

Each new technology works in concert with others along the supply chain to help streamline shipping and move product to its destination more efficiently. This level of integration can make scaling up technology usage difficult without a high-level strategy and framework for implementation. Creating this strategy starts with getting a better view of what’s going on in the industry.

Here are four spaces that will define fulfillment in the years to come:

Big Data

New cloud-based systems allow companies to harvest massive amounts of data. That information is in turn being processed and used to streamline supply chains. Analytics is already a big player in tracking packages on their last-mile journey from warehouse to the customer. Advances in data processing are now being used to better place product in warehouses, allowing fulfillment experts to access more popular product faster.

As MBT Magazine writes, “big data app integration provides greater contextual intelligence of how supply chain tactics, strategies, and operations are helping achieve financial objectives.”

Big data allows distributors to gather insights into real-time fluctuations in supply and demand, which leads to more precise geo-targeting, reordering, transportation logistics, and more. It can also help companies better manage complications due to traffic, weather, and other external factors.

IoT

A lot of this data is coming from mobile devices that 3PL companies are using to track product in transit. Integrating cloud devices into the supply chain has allowed companies to leverage data from their embedded sensors. IoT technology provides incredible visibility into the supply chain from shipping to warehousing to fulfillment.

“Indeed, the IoT is set to revolutionize the supply chain with both operational efficiencies and revenue opportunities made possible with just this type of transparency,” writes Daniel Newman for Forbes. The IoT enables companies to achieve more precise asset tracking using new RFID and GPS sensors that track product “from the floor to the store” and beyond.

Last-Mile

Traditional warehousing and distribution centers are being abandoned in favor of smaller regional distros that are significantly closer to urban centers. These more nimble operations are growing in popularity for large organizations like Amazon, who helped innovate this fulfillment tactic in large part because it enables same-day and next-day delivery.

E-commerce and tighter delivery turnarounds are driving considerable demand and innovation in the last-mile delivery world. Until recently, last-mile was largely the domain of business-to-business distribution, where large parcels of stock were transferred between warehouses and retail stores. Now that home delivery is quickly overtaking in-store sales, the role last-mile plays is increasing, especially as companies look for alternatives to big players in the field.

Innovation in last-mile delivery is equal parts data and distribution methods. Data analysis is giving delivery services the tools they need to better plan routes around traffic, weather conditions, and more. Simultaneously, some companies are developing technology to automate the delivery process using aerial drones and self-driving vehicles.

Multi-Modal Containers

Technology that enables the smooth transition of shipping containers between transport methods will change the way freight is transported. Freight trains remain one of the most affordable methods for moving goods, but transitions between port and train or train and warehouse are often cumbersome.

This logistics challenge is being taken on by major shipping companies like XPO, which recently announced a cloud-based platform for multi-modal transportation. Supply Chain Digital writes that “Shippers can access carrier capacity, assign loads and track freight movements through one, secure login.”

The platform is billed as being “fully automated, self-learning, and dynamic.” Increasingly, last-mile shippers are being integrated into multi-modal planning to transport goods from freight to the warehouse — another process that is being simplified using IoT technology.

As consumer demand evolves, companies are innovating to meet expectations. In the coming years, technology in the supply chain will streamline shipping and fulfillment practices in ways we can only imagine now. In the past five years, consumers came to expect next-day and same-day shipping as part of the e-commerce experience. Whatever consumers come to expect in the next five will depend on the technology we start to implement today.

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