4 Supply Chain and Logistics Trends for 2019

4 Supply Chain and Logistics Trends for 2019

The integration of technologies and the digitization of supply chain and logistics will continue to transform the industry in 2019.

Last year, changes in global markets and the boom in e-commerce increased consumer spending and expectations significantly. According to Statista, 21.1 % of supply chain executives found visibility to be the top challenge facing supply chains in 2018. In second place, 19.7% of respondents believe fluctuations in consumer demand was the most significant obstacle. The industry responded with the integration of innovative emerging platforms such as artificial intelligence (AI), predictive analytics, cloud technology and machine learning. This also led to the development of data-driven and predictive solutions that enabled companies to focus on providing personalized, customer-centric experiences.

At the beginning of last year, Morai Logistics discussed the Fourth Industrial Revolution known as Industry 4.0. The need for digital integration and adoption has indeed shifted from being an attractive add-on to a necessity to survive in changing markets. Despite hesitation to risk, change and integration, digital transformation is being progressively adopted by many industries, especially in supply chain and logistics. According to expert forecasts on future trends in supply chain management,

…over the next five years about 80% believe ‘digital supply chain’ will be the leading industry model

Indeed the last year has seen incredible resilience from transportation supply chains against the disruption caused by digitization. However, what trends will be at the top of the list this year?

This article reviews 4 supply chain and logistics trends of 2019.

1. Capacity Crunch

In March of 2018, Morai Logistics discussed the nationwide truck shortage and its effects on deliveries and rates. This year, the diver shortage will continue to require third party logistics (3PL) providers to improve their services. They provide shippers with solutions through ‘network connections, competitive volume rates and ongoing integration of information technology’.

2. Transportation Regulations

Another industry trend hat will carry over from 2018 and cause turbulence, is electronic logging devices (ELDs). Despite being introduced into the industry back in 2012, ELDs were officially mandated in 2017. Although this is a positive move to monitor the health of drivers, it has remained a top stressor for the industry.

3. Digitization

As mentioned above, digitization will continue to impact the transportation supply chain industry this year. The adoption of technologies, apps and emerging platforms in response to consumer demand will become necessary to compete with changing markets. Data analytics will be a major player this year as companies will have to assess ‘supplier risk, tariff risk, logistics costs or manufacturing costs’. In addition, AI and machine learning will be two significant technologies of 2019.

According to Forbes, machine learning will impact the following areas:

  • Warehouse management systems
  • Robotic vision systems
  • Supply chain planning
  • Supply chain visibility

4. Warehousing

According to Deloitte, by the end of 2018, ‘online sales of consumer products were project to increase 350%’. The dollar value of would equate to ‘USD$36 billion’. With over 2.14 billion people expected to shop online by 2021, the ecommerce market is significantly impacting consumer demand. This increase in expectations on service and delivery will require warehouses to focus on direct-to-consumer fulfillment.

What does this look like? Experts see a widespread adoption of automation and adaptable and scalable solutions such as robotics and drones. This will be highly important for the retail industry. Furthermore, improved strategies on ‘design and location’ of warehousing will ensure products are within range of consumers to guarantee fast delivery. The added pressure to expand, innovate and adopt new technologies will also have a significant impact on the labour force. Wages are expected to increase across supply chains, which should motivate companies to create ‘employee engagement programs’.

The above supply chain and logistics trends are four of many that will shape the industry this year. In order to develop solutions geared toward improving the customer experience and combating consumer demand, technology will continue to play a significant role in 2019.

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