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Experts on transportation supply chain and logistics say that truck platooning may help drive efficiency in today’s demanding market.

In a special feature this month, Forbes revealed 4 Forces Transforming Logistics, Supply Chain And Transportation Today. Aside from political and economic shifts, and the recently discussed peak in consumer demand, ‘frontline technology’ also made this list. The industry is looking for ways to address efficiency, in a time where driver shortages continue to fall. Possible solutions include a shift toward autonomous vehicles, however, there is still a long way to go before complete transformation. In their article, truck platooning is referred to as the ‘next big step’. It has gained considerable attention in the industry as a solution to efficiency.

Autonomous Trucking

Although autonomous vehicle technology is far from fruition, statistics on market growth reflect the industries investment in full integration. Figures show that by 2025, ‘partially autonomous vehicles’ will value USD 36 billion, and ‘fully autonomous vehicles’ is expected to reach USD 6 billion. While consumers are favouring the integration of innovative ways to travel, the self-driving truck market is also progressing. According to Market Watch:

Global Autonomous Trucks Market is growing at 15.6% compound annual growth rate during forecast period of four years from 2018 to 2023.

On-road transportation is the most common mode for moving goods worldwide. Therefore, it makes sense that the industry is investing in ways to improve efficiency. When technology integration and transportation supply chains fused together, researchers created truck platooning.

The Rise of Truck Platooning

According to the European Automobile Manufacturer’s Association (ACEA), truck platooning uses ‘connectivity technology’ and ‘automated driving support systems’. The concept involves linking two or more trucks together as they travel in a convoy style manner from point A to B. The innovative technology still reflects reality based system where there is a leader that can direct and guide those following behind. Despite this significant advancement, these trucks still have drivers along for the ride. The industry is not at a stage to release fully-automated systems just yet. However, news coverage has reported that the use of semi self-driving vehicles are underway.

Semi-autonomous trucks are being tested in various parts of North America. CBC comments that Peleton Technologies is already testing synchronization of speed and braking being tested on two or more trucks. Their motivation to push-out this initiative is to improve ‘fuel efficiency by decreasing wind resistance’. This leads us to question the benefits of connective technologies, such as truck platooning.

Benefits of Self-Driving Convoys

In recent months, Morai Logistics has discussed the importance of transparency, efficiency and speed. Now more than ever, organizations in the supply chain and logistics industry must work harder to stay ahead of the competition. This means investing in research and development, and looking at options to optimize their shipment lifecycles.

There are a variety of benefits from the integration of autonomous vehicles in the transportation industry. In addition, the emergence of any technology provides opportunity for both the labour force and other sectors. The top benefits include:

  • Efficiency – autonomous trucks helps meet efficiency and on-time delivery needs, while giving drivers the opportunity to complete administrative function.
  • Improve Safety – drivers who drive for long periods of time are able to rely on advanced safety features such as immediate braking.
  • Sustainability – research states that self-driving vehicles can significantly ‘lower fuel consumption and CO2 emissions.

Overall, truck platooning is an example of how technology is being used to address current barriers within the transportation and supply chain industry. The need to improve the shipment life cycle continues to fuel how we innovate our transportation methods.

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The future of retail is growing increasingly reliant on digital technologies, which will place significant demand on transportation supply chains.

According to the U.S. Census Bureau, in 2017 retail sales hit a record breaking $5.7 trillion USD. By 2020, global retail sales is expected to rise to $27.73 trillion USD. Statistics also reveal that last year, ‘an estimated 1.66 billion people worldwide purchased goods online’. This translated into $2.3 trillion USD in e-sales, a figure that’s expected to rise to $4.48 trillion USD by 2021. These figures represent a positive progression of economic prosperity and in addition also identity a significant transformation in the retail industry.

Research on the cause and effect of these figures suggest that technology is playing a significant role in where retail is headed. Recent trends indicate that both technology and consumer behaviour are two notable factors influencing these numbers. Therefore, it’s no surprise that this will have an impact on supply chains, the question is how much?

Morai Logistic has identified the benefits emerging technologies provide supply chains to meet the increase in consumer demands. This week, we look at how digitization is impacting the retail industry and how this translates into a need for greater immediacy and efficiency.

Current Trends in Retail

The retail industries transition from brick-and-mortar to online, is one of the most prominent ongoing movement today. By 2020, e-commerce sales will account for ‘16% of retail sales’, making its mark as the ‘largest channel’ in North America. This doesn’t suggest that ecommerce shopping carts will completely replace traditional physical stores. However, it does require an urgency for retail companies to adjust their strategies in order to accommodate consumer demands.

There are many factors that impact consumer behaviour. For one, the internet gave people the ability to access information in real-time, helping them make informed buying decisions. From reviews to recommendations, consumers heavily rely on digital information to guide their in-store purchases. According to the Balance, as a result of changes in consumer spending,

Retailers found they had to offer value in the form of higher service and convenience in addition to lower prices.

In order for companies to respond with convenience, low prices and gain competitive advantage, they must provide both online and in-store opportunity. Statistics on consumer spending this year, signifies that there is ‘a definite move toward online shopping’. The retail industries response to this rise in consumer demands also means a shift from a product-centric model to one that is customer-centric.

The Customer Wants More

Across a variety of industries, including both retail and supply chain, we see that the customer experience is becoming a focal business model. Customization is key to propel the buyer’s journey. According to Salesforce,

84% of customers say being treated like a person, not a number, is very important to winning their business.

With easy accessibility to products online, there is also an increase in demand for ‘instant gratification’. This translates into speed, which in supply chain is referred to as immediacy. The Financial Brand states that the ability for a company to deliver a product fast is no longer a ‘nice-to-have’ but a ‘need-to-have’. Therefore, companies must structure their supply chains accordingly.

A Retail Supply Chain

As in-store and online retail sales and consumer demands continue to rise, companies must optimize the way products are delivered. A strategic approach is necessary in order to meet growing consumer expectations, which can be summarized as follows:

  • Next-day or same-day delivery
  • Free shipping
  • Free returns

However, experts say that supply chains have not been able to keep up with this rise in retail prosperity. Worldwide management consulting firm, McKinsey & Company, states there in order to keep us there is a “need for a supply chain revolution.” What does this look like?

Retailers must improve their visibility across the entire shipment lifecycle; offer cost-effective solutions, while being able to deliver expedited shipping; restructure to achieve a ‘greater flexibility in inventory management’; and also optimize their distribution methods by incorporating optimal distribution centers (DC).

As the retail industry continues to grow and expand, supply chains will notice a progressive amount of pressure. The impact of increased consumer demand across a large scale of industries is a result of how technology is changing consumer behaviour.

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To compete in today’s digital marketplace, supply chains must build a framework that prioritizes visibility, supplier diversity, technology and the customer experience.

Survey results from ‘623 supply chain professionals across 17 countries’, concluded that one of the top industry challenges was ‘facing global competition’. Over the last two decades, the competitive landscape of supply chain and logistics has changed considerably. The process of transporting product from A to B has transformed over the years.

The definition of ‘supply chain’ has also shifted over time. This correlates to the advancement of technology. According to Supply Chain Dive,

Because of its novelty and rapid changes in the world market, supply chain remains a controversial term – shifting per the user’s needs.

Morai Logistics recognizes the current shift facing supply chains today. A rise in ecommerce has enabled consumers to purchase products anywhere at any time, which has created a need for immediacy. Consumer demand has also increased expectations relating to lower shipping rates, faster on-time delivery and complete transparency. Supply chains must be predictive, preventative and proactive to ensure that transactions run efficiently and effectively.

However, technology also helps develop advanced tools that enable third party logistic providers (3PL) to gain a competitive edge. This blog post discusses how technology can be the driver of change to your supply chain, and how companies can gain competitive advantage.

Visibility

Statistics reveal that in 2017, ‘full supply chain visibility’ became the 3rd ‘most important strategic priority’. When it comes to supply chains, consumers place great importance on transparency. For instance, online shoppers like companies that offer updates on their transactions and shipments. They want to be involved in every step of the shipment lifecycle, and receive open communication and real-time responsive. Technology provides an unceasing transmission of insight in the form of big data. Numbers can translate valuable information that can guide companies to better predict inefficiencies. Advanced analytics help supply chains achieve visibility.

Customer-Centric Approach

On August 9th, 2018, Morai Logistics released an eBook entitled Customer Service: A Long Term Strategy for Future Supply Chains. Prioritizing the customer is extremely important because supply chains directly impact when and how products are transported. Statistics also reveal that 75% of businesses considered ‘services as more important than price’. According to Forbes,

Customer-centricity is the most desired business outcome of supply chain digitization.

As mentioned above, visibility plays a significant role in creating a supply chain that focuses on the needs and demands of shippers and suppliers. In addition, technology solutions can help deploy a customer-centric strategy by offering personalized customer experiences.

Technology – Centric Approach

As mentioned above, technology has been directly linked to improving the customer experience, in addition to overall efficiency. Adopting emerging platforms will enable supply chains to leverage advanced analytics, and also improve productivity through forecasting and inventory management.

Global research icon, Gartner, states that 65% of supply chain professionals believe that ‘adopting and investing in emerging technologies’ is a competitive advantage. Furthermore, ‘90% of companies’ that are ‘operating at stages four or five maturity levels outperform their peers’. These statistics confirm that to be an industry leader in this global market, supply chains must adopt technology.

Supplier Diversity

If you want to obtain competitive advantage, incorporate a supplier diversity program into your supply chain operations. According to Supplier Diversity Canada, including ‘under-represented businesses in a company’s supply chain’, you lead as an organization that values corporate social responsibility. Companies establish credibility and promote a customer-centric model by reflecting ‘their existing/targeted customer base’.

For supply chain and logistics companies to stay competitive in today’s global market place, they must learn to adapt. By prioritizing customer-centric models, visibility, supplier diversity and technology, they increase their advantage, which ultimately benefits their bottom-line.

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Supply Chain must implement strategic, innovative and customer-centric models to compete in today’s global market.

As the fundamental network that helps distribute product from point A to B, supply chains play an important role in an organization’s ability to deliver efficiently and effectively. Today, supply chains are facing a variety of challenges as a result of increasing consumer demands, complexity and unpredictability. Industry experts believe that an optimized end-to-end supply chain that is executed using a customer-centric model, can help address these challenges.

This infographic outlines the challenges facing supply chains in 2018. It further outlines how these distribution networks can optimize their processes to deliver efficiently and effectively.

How to Create an Optimized Supply Chain

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That’s it for us this week! If you liked this blog post, why not subscribe to our blog? Interested in our 3rd party logistics services? If so, don’t hesitate to check out our services . We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

Morai-Logistics-Blog-big-data-driving-supply-chain

Industry experts believe that supply chains must continue to utilize Big data to improve efficiency, transparency and immediacy. 

In 2012, the New York Times published an article entitled “The Age of Big Data”. This term has been around for over a decade, yet as the digital revolution evolves, we must ask: How important is Big Data and what does it do for supply chains?

Experts in the field of supply chain and logistics, consider data to be an asset in optimizing operations. Our industry is seeing a growing need for Big Data, with an even greater emphasis on understanding how to use it. The lack of comprehensive knowledge and traditional change, are some of the reasons that complete integration across industries has been slow. However, statistics show that in less than two years,

One-third of all data will be stored and analyzed using cloud computing.

This progressive adoption shows promise that companies are becoming more interested in how data can solve problems. This blog post by Morai Logistics further details the concept of Big Data and outlines the benefits it can provide supply chain and logistics.

What’s the Big Deal?

Historically, the collection and transfer of large data sets has been around for years. However, there is a growing need for innovative and sophisticated processes that can qualify and quantify what the data means. Although endless amounts of data is a plus, not being able to make sense of what it means disables companies from leveraging its benefits.

The concept of Big Data was developed in 2005, by Roger Magoulas. Today, it influences a variety of industries including finance, business, life sciences, engineering, astronomy and logistics. In 2012, Gartner expands on the original definition and produces the following below:

A high-volume, high-velocity and/or high-variety information assets that demand cost-effective, innovative forms of information processing that enable enhanced insight, decision making, and process automation.

The three primary characteristics of Big Data are outlined as volume, velocity, and variety. Volume refers to how large the data-set of a company is; Velocity describes the incredible speed of extraction; and variety is classifying between structured and unstructured data. Over the years, two additional dimensions have been added to consider consistent change . Variability speaks to the unpredictability of data flow, which SAS states is ‘difficult to manage’. The term ‘complexity’ describes the countless sources that feed Big Data. It also highlights the importance of patterns and relationships in understanding how to use the information.

Big Data is a Utility Tool

Statistically, about 85% of companies have begun implementing ‘data-driven cultures’, however, only ‘37% report success’. Large sets of data are complex, with the potential to provide important information to help companies answer a diversity of business problems. However, the transformation of this data into a utility tool is dependent on how companies utilize this data.

Oracle outlines the following verticals, through which Big Data is helping global markets:

  • ‘Product Development’
  • ‘Customer Experience’
  • ‘Operational Efficiency’
  • ‘Fraud and Compliance’

In addition to the above areas, emerging platforms such as the Internet of Things (IoT) and machine learning are possible because of Big Data. The integration of these technologies produces more and more data sets for companies to process and understand. According to Oracle, cloud computing has a major role to play in expanding ‘big data possibilities’. While this is all true, industry experts may ask, what does this have to do with supply chains?

Supply Chain Advancement

As consumer demands continue to increase and the unpredictability of markets remain, our industry must stay ahead. Big Data also has a direct relationship to the advancement of supply chains. From large data sets, organizations are able to offer efficient solutions that produce scalable results in an immediate time frame. Furthermore, supply chain management processes are improved as companies acquire and translate data using real-time analytics. This optimizes the communication of information and also improves operation visibility.

There is no denying that Big Data is a critical component to the success of many industries. However, as technology continues to produce more and more data, global markets must develop ways to translate numbers into actionable solutions.

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Prescriptive analytics is a decision making model that can help supply chains meet the increasing demands that have resulted from the revolution of technology.

Now more than ever, the supply chain and logistics industry is under pressure to meet the unprecedented growing demands of consumers. In addition, they also must meet demands with efficiency and immediacy, while offering competitive rates and network opportunities. The impact of emerging technologies on transportation supply chains is a point of interest to a variety of industry leaders. It requires actionable initiatives that specifically analyze innovative ways for supply chains to improve their bottom line and transform to effective digital supply networks (DSNs).

Prescriptive Analytics is a critical approach toward helping supply chains achieve this transformation. Gartner Inc.defines this technology as:

A form of advanced analytics which examines data or content to answer the question “What should be done?” or “What can we do to make _______ happen?

This form of algorithmic decision making, enables companies to visualize actions that improve operations and capitalize profits. This blog post dives deeper into understanding the function and benefits of prescriptive analytics in supply chain management.

Prescriptive Versus Predictive Analytics

Advanced analytics can be described as being either descriptive, predictive or prescriptive. Their meaning can be broken down into fundamental questions that help businesses achieve an objective.

Descriptive        —————    “What has happened?”

Predictive         —————    “What could happen?”

Prescriptive       —————    “What should we do?”

In April, Morai Logistics discussed the imperative need for supply chains to improve transparency. We describe predictive analytics as a recommended technology that provides organizations with the technology to forecast and achieve real-time visibility. Joined by Artificial Intelligence and Machine Learning, this suite of tools help many industries such as retail, healthcare and transportation. What’s does prescriptive analytics bring to the table?

According to Digital Journal, the global prescriptive analytics market serves numerous markets including healthcare, information technology & communications, manufacturing, government and defences, and of course transportation and logistics. They share the following insight into the growth of this market:

Prescriptive analytics market accounted for USD 1.20 billion growing at a CAGR of 30.95% during the forecast period of 2017 to 2024.

In comparison to forecasting with predictive analytics, prescriptive analytics identifies how ‘business processes should evolve or be modified’. It’s an algorithmic decision making model that analyses data in order to take action. Applying this level of analysis can help any business understand how to effectively use their ‘resources, costs and capabilities’.

Benefits for Supply Chains

Transportation and logistics is a market segment that should utilize prescriptive analytics. However, their integration is comparatively slower to other industries despite feeling the pressure of consumer demand the most. Although there is a growing need for new and improved processes, many industry leaders fear the unknown of integrating a new technology tool. Supply Chain Management Review states that implementing prescriptive analytics is ‘a crucial analytics approach’. They further reinforce the following outcomes below as beneficial to improving supply chain management.

  • Create ‘visibility between the supply chain and finance’.
  • Provides managers with advanced platforms that help base decisions on fact-based scenarios.
  • Integration of predictive benefits such as cost reductions, forecasting and end-to-end visibility.
  • Create a prepared, informed and confident workforce.

Advanced analytics is a critical tool that should be integrated into any organization looking to achieve profit growth. Supply chains must continue to embrace technologies in order to meet customer demands, while creating a competitive advantage in changing markets. Predictive analytics is important because it helps supply chains understand future risks, challenges and outcomes. However, prescriptive analytics leverages data to devise action that will improve efficiency, immediacy and their bottom line.

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As the integration of technology changes the supply chain ecosystem, third party logistics (3PL) providers are urged to maintain a high level of customer service.

The digitization of any industry impacts the direct interactions customers have with businesses. Ecommerce platforms provide consumers with the ability to make on the spot transactions, and this results in increased expectations.

What does this translate into? Unpredictable demand on supply chains.

There are a variety of challenges that supply chains will have to face over the next three to five years due to this constant change in demand. While many speculate that price is a major determinant of customer conversion, research has found that customer experience is a vital component.

This eBook navigates through some of the challenges facing supply chains, and offers effective solutions 3PLs can implement to help improve the customer experience.

How Customer Service Will Win in the Logistics & Supply Chain Industry

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That’s it for us this week! If you liked this blog post, why not subscribe to our blog? Interested in our 3rd party logistics services? If so, don’t hesitate to check out our services . We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

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Mobile based solutions provide added value to supply chain management operations by improving efficiency, speed and accuracy.

The benefit of technology will continue to be a topic of discussion in the supply chain and logistics industry. In recent months, Morai Logistics has discussed the positive impact machine learning, Artificial Intelligence and predictive analytics will have on real-time efficiencies. The mobile supply chain has also gained considerable attention as companies and third party logistics providers seek ways to improve the end-to-end experience.

There is an overall added value of transparency and efficiency that comes from an increase in connectivity. Therefore, the integration of mobile-based solutions has been implemented by many industries including transportation supply chain management.

According to Business Wire, the North American Supply Chain Analytics Market is expected to grow by 15.5% CAGR between 2017 and 2023. The data acquired from emerging technology such as mobile-based solutions, is a response to the following challenges:

  • Poor supply chain visibility
  • Inefficient supplier networks
  • Warehousing cost
  • Incorrect forecasts

This article defines mobile supply chains and dentifies current mobile based applications gaining considerable attention.

Mobile Supply Chains

Supply chain technology provider, Datex defines mobile computers as “automated data collection (ADC) devices”. The company further describes their design as being:

…compact, lightweight and with durable construction or use in extreme temperatures and environments encountered frequently both in and out of the warehouse.

From a user perspective, these applications provide real-time processing and also more data accuracy in comparison to manual entry. Their implementation is a movement from traditional forms of paper trail to efficient methods that provide a variety of benefits. Logistics Viewpoints outlines the following top reasons to implement mobile based solutions into supply chains:

A. Improved Processes

From shippers to third party logistics providers, the implementation of mobile applications helps improve the entire shipment lifecycle. Last week, Morai Logistics discussed how consolidation tools improve cold chains. The use of tablets or RFID handhelds, offer multiple users across the same organization, accessibility to a platform that contains all important information. This helps supply chains run smoothly and creates efficient communication verticals.

B. Enhanced Delivery

Research states that ‘a mobility solution allows you to manage all of the on-road processes for a successful delivery and pick up of all freight’. In addition, it provides a platform for drivers to locate details about delivery specifications and in helps facilitate ‘driver-specific actions’.

C. Customer Satisfaction

As ecommerce platforms and mobile technology make allow customers to make immediate buying decisions, their expectations and demands also increase. Ultimately, efficient and faster supply chains improve the customer experience, which is another benefit provided by mobile applications. They help to remove the barriers that impact shipment visibility, which is a challenge facing supply chains in changing markets.

Let’s take a look at a mobile based solution making headway today.

Mobile Applications

Oracle Corporation creates and delivers innovative technologies that help businesses around the world advance their processes. In an effort to help improve supply chains, they have created Oracle® Mobile Supply Chain Applications (MSCA).

In relation to the benefits listed above, these applications also help ‘improve visibility, productivity and accuracy’. They integrate into a variety of devices and software systems, offers personalization and provides real-time insight and data processing. This program has been designed to help optimize supply chains that don’t require an ‘extensive warehouse management system’.

As the demand for efficiency, speed and immediacy continues to increase, supply chains will continue to rely on advanced technology. The emergence of mobile based solutions is not a recent industry trend, however, it is still gaining considerable attention. The added value applications such as MSCA provide companies looking to improve the end-to-end experience is significant.

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The growth of pharmaceutical markets increases the demand on cold chain logistics to offer safe and efficient transportation solutions.

This year, the biopharmaceutical industry is valued at $318 billion with a continued incline projected over the next few years. To help support the expansion of this pharmaceutical market, leading market research provider Technavio, raises the importance of ‘product diversification’.

Statistics on the long-term progression of the North American pharmaceutical logistics market, reveals that by 2022 it will ‘grow at a CAGR of close to 5%’. By 2021 this will translate to USD 20.44 billion. North America’s primary contributor of revenue growth is led by the United States, however, Canada also remains one of the ‘top 10 pharmaceutical markets’ across the globe. Consolidation tools have been implemented to help this fragmented industry benefit from ‘new technologies and expertise’.

The transportation of pharmaceutical products is commonly segmented into ‘cold-chain’ and ‘non-cold chain’ logistics. Transference requires optimal cooling solutions to ensure medical products are moved safely throughout the shipment lifecycle. This article identifies key trends in cold-chain logistics and the takeaways from industry forecasts. It also aims to uncover optimal solutions that have been set in place by pharmaceutical supply chains to help mobilize this market.

Cold-Chain Logistics

According to PharmoPro,

Cold chain refers to the management of temperature-sensitive products as they move through the supply chain.

Figures show that in comparison to the pharma market as a whole, sales of temperature-controlled products usually increases two times more. In line with this trend, the cold-chain logistics market will also increase 8% by 2022. From a logistics standpoint, statistics show that 80% of the top 10 pharmaceutical products will require cold-chain transport.

Therefore, an increase in market growth will also translate into a rise in customer demand, which in this industry are pharmaceutical manufacturers. Experts recognize that supply chains must accommodate future capacity, which is where product diversification comes into play.

Diversifying a supply chain portfolio is a strategy  that many industries use to accomplish the following objectives:

  • Decrease costs
  • Improve efficiency
  • Manage risks

Technavio observes third party logistics providers in the pharma space using product diversification for the above reasons as well. Let’s look at the top solutions that help optimize cold chains.

Pharma Supply Chain Solutions

1. IoT and Artificial Intelligence (AI)

The integration of technology solutions, such as IoT and AI, into cold chains can help companies maintain control of the transportation of pharmaceutical products. By transmitting real-time data, companies are able to monitor the ‘safety and quality’ of shipments.

2. The Cloud

The Cloud has gained considerable recognition as an innovative approach to improving the visibility of supply chains. Its ability to consolidate information to a central location also helps provide information to multiple industry players.

3. Analytics

Predictive analytics also improves the efficient and safe transportation of medication and vaccines. Forbes states that for cold chains this ‘helps to plan for and accommodate hazards or caution flags in the transit route as they arise’. They add that this will helps companies forecast based on patterns of risk, which they can better respond to with mitigation strategies.

As the value and scale of the biopharmaceutical industry continues to grow, there is an urgency for effective transportation solutions. To ensure the safe and efficient handling of pharmaceutical products, there will be an increase in demand on cold chains.  Advanced technologies such as IoT, AI, the Cloud and Predictive Analytics will play an integral role. There is no denying the urgency for logistic providers to invest in innovative avenues to help prepare cold chains for future capacity.

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Experts say that machine Learning is a “revolutionary” solution that could solve four major challenges facing supply chains this year.

Supply chains are currently faced with the same innovative, yet challenging movement: technology. The disruption caused by digitization has increased the value of global markets, but has also advanced the way supply chains operate. This translates into an increase in  consumer demand and a greater need for optimized processes.

According to Boss Magazine, today’s supply chains strive to achieve the same goal, “to simplify processes while maximizing effectiveness”. However, while emerging platforms have made notable impacts, there is a technology that is gaining considerable traction.

Machine Learning is a methodology analytics leader, SAS,  describes as:

A branch of artificial intelligence based on the idea that systems can learn from data, identify patterns and make decisions with minimal human intervention.

This advanced system of data analytics has helped transform our everyday lives. For example, media service provider, Netflix, creates positive customer experience by predicting the shows viewers may be interested in based on past searches. This form of “analytical model building” could also present revolutionary ways for supply chains to optimize their processes.

This article identifies how machine learning can address four challenges facing supply chains in 2018.

1. Demand Forecasting

As mentioned above, there is considerable pressure on supply chains to provide efficiency and immediacy. Ecommerce and mobile shopping has provided customers with easy-to-use platforms where they can purchase items with the click of a button. Therefore, the expectation of expedited delivery has also increased.

Forbes contributor, Louis Columbus, states that machine learning algorithms can help address one of the top challenges facing supply chains: “predicting the future demands for production”. Machine learning enables companies to make sense of big data in order to recognize patterns and understand how to predict these future demands.

2. Cost Reduction

The advanced forecasting approach of machine learning can also help reduce costs associated with delivery. Supply Chain Dive confirms that just two years ago, 60% of online transactions were expedited with free delivery. This has raised the bar in customer satisfaction but has also put incredible pressure on retailers and supply chains from a cost perspective.

In conjunction with Artificial Intelligence (AI), machine learning can help improve delivery performance and reduce freight costs by considering and avoiding possible deviations.

3. Customer Service

To reiterate, the emergence of online shopping platforms has increased demand, moving organizations to place acute focus on customer service. Machine learning improves efficiency, therefore, improving the ability for companies to provide visible and reliable service. Research on supply chain pain points found that due to inaccurate forecasting, companies struggle understanding ‘market patterns and market fluctuations’.

Forbes states that on top of decreasing inventory and operation costs, machine learning also improves the response time to customers.

4. Optimize Visibility

In a featured article by Morai Logistics, we discuss the importance of transparent supply chains. Being aware of all aspects of the shipment lifecycle is important from both a supply chain and customer standpoint. Research found that,

73% of online shoppers feel more confident making purchases when they have the ability to track their delivery.

In combination with other forms of technology, machine learning can help supply chains achieve end-to-end visibility. It offers advanced insight into real-time data and formulates patterns that can help companies make informed decisions.

Supply chains must leverage technologies that help improve demand forecasting, lower costs, improve their customer service and deliver transparency. Machine learning is a revolutionary tool that supply chains should utilize to overcome unpredictable challenges.