Supply chain management has seen considerable change in the last several years, with recent technological advancements prompting both new opportunities and new challenges. In 2019, several trends we've observed in other industries will begin to dominate the supply chain sphere. Many of these trends are expected to improve both efficiency and customer service. Others, however, could be cause for concern. All call for a more flexible approach, in which systems evolve alongside the rapidly shifting market.
Read on to learn more about the latest trends in supply chain management — and how these shifts could transform every facet of the way we do business.
Robotics and Automation
Between recent advancements in technology and increasing blue-collar labor shortages, automated systems are increasingly regarded as a viable solution, with some supply chains edging towards total autonomy. Amazon's efforts with drones have hit headlines in recent years, but until now, many other companies have proven reluctant to embrace supply chain automation.
That's quickly changing.
In a 2017 MHI survey, 61 percent of respondents regarded automation and robotics as a top source of competitive advantage. An additional 27 percent claimed that they would support ongoing automation and robotics improvements.
Supply chain leaders cite growing talent gaps as a chief source of concern; automation can, to some extent, help businesses address ongoing labor shortages. Currently, automation and robotics are primarily relied upon for such tasks as loading and unloading, assembly operations, sorting orders, and welding and fabrication.
Smart sensors may prove one of the most easily adopted automated solutions. These intelligent devices track information in their environment and make adjustments based on the conditions they observe. Experts at MHI believe that, due to the end-to-end visibility these sensors provide, they will see an adoption rate of 87 percent within the next five years.
Complete supply chain visibility was once regarded as an overly ambitious goal — but that's about to change. According to experts at Kodiak Rating, a company dedicated to technology, supply chain, and “sustainable sourcing,” cloud solutions promise to improve transparency while also increasing agility and allowing for more scalable supply chain solutions in a rapidly changing market. The robust analytics associated with cloud computing can be leveraged to improve logistics and efficiency. Increasingly, businesses will look to predictive analytics within the cloud in an effort to not only respond effectively to new challenges, but also to anticipate them well in advance.
Once solely associated with cryptocurrency, the blockchain is now increasingly regarded as an essential in supply chain management. This distributed ledger system is uniquely secure, and therefore an ideal solution to the breaches that have become a regular part of doing business for far too many companies. While blockchain remains in its early stages in supply chain, its perception within the industry will likely shift this year, with companies viewing it not so much as a potential advancement, but as an all-out necessity. According to IBM, TradeLens sits at the forefront of this revolution. The joint blockchain shipping venture — involving Maersk and IBM — will become fully operational by the end of 2019.
Uber and Lyft have transformed transit, while Airbnb and VRBO have changed how we think about travel and lodging. These are just two elements of the sharing economy, in which individuals acquire, provide, or otherwise secure access to goods via a digital platform. Although typically thought of as a thoroughly peer-to-peer trend, the sharing economy can also involve company-to-peer and company-to-company interactions. Experts at companies like Thomas Insights believe that this trend will upend the world of supply chain management — but they also believe that, if leveraged correctly, the sharing economy could lead to a more sustainable supply chain model.
With the integration of the sharing economy into supply chain management comes more direct links, eroding the point-to-point model that has dominated the industry for so long. As a result, supply chain is rapidly becoming less rigid.
The sharing economy may also be of increasing value as companies continue to face significant driver shortages. For example, many trucking divisions and businesses now rely on mobile apps such as Uber Freight to connect independent drivers with loads. These companies have seen significant savings by minimizing the time drivers spend waiting for loads. Likewise, sharing solutions have improved customer service by prompting faster and more personalized deliveries.
Hyperlocality and Smart City Logistics
While digital solutions have, in many ways, increased the scope of the supply chain, another intriguing trend is beginning to emerge: hyperlocality. Once associated primarily with produce and small businesses, hyperlocality is now regarded as a viable means of improving efficiency, customer service, and profits — all while promoting a more ethical approach to business. The sharing economy deserves much of the credit for this emerging trend, with mobile apps increasingly allowing small businesses to make the most of their supply chain while still strictly targeting a small radius.
For retail businesses like Target who want to revive community-centered business to industry giants like IBM searching for ways to provide better vendor solutions, hyperlocality offers a viable solution, one that could transform how warehouses and retail locations are designed. Supply chain experts increasingly reference the concept of smart city logistics, in which supply chains are explicitly designed to enhance sustainability and fluidity within an urban environment. As a result, future distribution centers may be smaller and more urbanized, but also far more agile and efficient.
International Trade Concerns
The rise in hyperlocality could not come at a better time; 2018 saw significant upheaval in international trade — and 2019 looks to be no different. From the uncertainty of Brexit to escalating conflict between the United States and China, instability will be the name of the game. A recent Forbes report claims that this instability will drive a "major rethink of global supply chains." Companies currently reliant on international trade may mitigate related concerns by shifting to a more local-oriented approach or relying on automation and other advancements to keep operating costs to a minimum.
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