artificial-intellignece-in-supply-chain-management

Experts say that supply chain management is one of the top industries that will benefit from the adoption of artificial intelligence (AI) this year.

In February, Morai Logistics discussed the positive impact Artificial Intelligence is forecasted to have on our industry. From robotics and machine learning to delivery optimization to maintenance consistency, the possibilities are endless.

According to Statista, in 2025 the global AI market is expected to generate approximately 89, 847.26 billion U.S dollars. This technology has gained considerable global interest for the heightened efficiency, productivity and innovation it provides many industries. The AI market is also forecasted to contribute ‘$15.7 trillion to the global economy’ by 2030.

There is no denying the positive impact Artificial Intelligence will have on industries that help propel our world forward. Supply chain management is considered one of the top three industries to benefit from the advancements of AI technology. From the manufacturing floor, to inventory and logistics, AI is a catalyst for efficiency, agility and accuracy.

In part two of Artificial Intellignece, Morai Logistics discusses the current impact of AI in the supply chain industry in 2019. It also outlines the valued benefits of integrating AI technology into supply chain management.

Artificial Intelligence at a Glance

To understand the global impact of AI, Microsoft commissioned a survey that included 400 senior executives working within eight various markets. Their findings indicated that 94% of executives ‘describe AI as important to solving their organizations strategic challenges’. Digital maturity has been a slow and progressive movement across a variety of industries. However, more than 27% of executives stated they have already incorporated AI into their organizations.

From a supply chain standpoint, a recent study by global research leader, McKinsey, found adoption to be significantly high. Their global survey indicated that 76% of supply chain respondents found ‘moderate to significant value from deploying AI’. Their research indicated that supply chain management is one of the top three industries to benefit from this technology. Thus, confirming that this technology has made its way into the industry, with positive feedback from top level professionals.

Benefits of AI in Supply Chains

Before we outline the extended benefits of AI in supply chains, it’s important to first recognize the challenges with implementation. If the process of integration of technologies was simple, many industries would be at the higher end of the spectrum of digital maturity. Forbes indicates that the most significant challenge is acquiring the right talent pool. However, they also followed with optimism that many organizations place importance on ‘building in-house AI capabilities’. Therefore, as supply chains evolves, employees are also encouraged to develop their skills.

In February, Morai Logistics looked at robotics and machine learning, delivery optimization and maintenance consistency. According to Microsoft,

There is tremendous opportunity for AI to augment human abilities across industries while capitalizing on unique human capacities for creativity and agility – human characteristics that are difficult for computers to mimic.

This supports the fundamental reality that AI heightens employee performance, as AI technologies enable them to focus on their core skills. Furthermore, research has also found positive results from the integration of predictive capabilities. The reality is that AI continues to evolve and learn which also enables supply chains to learn and adapt to change. This is especially helpful when developing processes that enable ‘demand forecasting and capacity planning’.

Big Data is also an incredible tool that helps technologies such as AI advance. Research indicates that 81% of shippers and 86% of third-party logistics (3PLs) providers believe in using Big Data. In fact, they believe that ‘using Big Data effectively will become “a core competency of their supply chain organizations.

AI will cause considerable change and provide opportunities to the supply chain and logistics industry in the upcoming years. As organizations continue to diversify their labour force and integrate and develop various tools using AI, supply chains will see positive growth.

How Supply Chain Orchestration Improves the Customer Experience (1)

Experts believe that through digital freight matching, transportation supply chains can open a new way of driving efficiency and visibility.

Advancements in technology have created many opportunities for transportation supply chains to develop game changing digital tools. Emerging platforms such as artificial intelligence (AI) and machine learning have enabled supply chains to improve efficiencies and visibility. However, there is still an unceasing level of innovation yet to be explored, with initiatives such as mobile apps setting the stage.

Last year, Morai Logistics discussed the Uberization of supply chains, and touched on the impact of autonomous freight. According to Supply Chain Times,

The new year also provides many opportunities for shippers to turn to technologies and digital transformation to improve their operations, efficiencies and bottomline profits.

Digital freight matching, or ‘on-demand load-matching’, is an industry technology that experts believe will be a game changer for carriers and shippers. In fact, the on-demand supply chain market is gaining considerable attention this year as a top trend to watch out for.

This week Morai Logistics will examine the forward thinking theories surrounding digital fright matching and the role of the Sharing Economy in adoption.

Digital Freight Matching

On January 17th, 2019, Morai Logistics discussed the current capacity crunch impacting transportation supply chains. It causes a variety of setback for shippers, as a decrease in drivers means an increase in freight rates and inefficient delivery. Two of the most common reasons for this nationwide shortage is a shortage of drivers and Electronic Logging Devices (ELD).

Logistics Solution Providers (LSPs) have now turned to technology to push through the crunch, and develop solutions to find capacity that meet consumer demands. Digital freight matching, or ‘Intelligent freight matching’, automates the traditional forms of communication between carrier and shipper. According to Descartes, a leader in SAAS solutions for logistics, states that,

Freight matching solutions leverage new technology such as ELD and real-time tracking to know the location of carriers’ trucks with capacity and help determine which carrier wants the available load the most.

Furthermore, there are two main goals that freight matching aims to achieve:

  • Utilize capacity and ‘decrease empty miles’
  • Make the matching between shipper and carrier more efficient

Therefore, the outcome is a robust, smart and strategic supply chain. Third party logistics providers (3PLs) are able to integrate this into their solutions to help improve efficiencies and utilize insightful data.

Leading Freight-Matching Apps

A mobile-app that has changed the way we travel and live is Uber. This app is used in over 65 countries, with 3 million drivers. Research indicates that out of the total number of drivers worldwide, ‘750,000 are based in the US’. Over the course of the last year, Uber has also recognized an area of expansion, advancement and profit. It has also expanded its scope and delivered Uber Freight to the world of transportation.

Uber Freight is a good example of how technology is being utilized to create freight matching efforts. From a usability perspective, this platform enables drivers to do the following:

  • Access ‘upfront load pricing’ and a network of shippers and carriers
  • Tender a load with only a few clicks
  • Provide tracking throughout the entire shipment life cycle
  • Organized and real-time access to document management

Technologies, such as Uber Freight, are an example of mobility on demand (MOD). This concept describes a ‘user focused’ initiative that offers ‘integrated transit networks and operations, emerging mobility services, connected travelers, co-operative intelligent transportation system and real time data’.

The integration of digital freight matching is another example of how technology can improve efficiency and visibility. These emerging platforms offer shippers and carriers the opportunity to expand their networks, acquire real time data and survive the industry capacity crunch.

WhereWillArtificialyIntelligenceTakeSupplyChainsIn2019

This year, artificial intelligence (AI) remains one of the top advancements in supply chains and an integral solution toward improving efficiency.

Artificial intelligence generated major buzz as a revolutionary technology for supply chains in 2018. Early last year, Morai Logistics discussed how AI improved transparency with customers, in addition to optimizing transport management systems. In fact, the success of the market in 2018 generated ‘USD 730.6 billion’.

The latest forecast on Artificial Intelligence in supply chain indicates that by 2025 this figure is ‘expected to reach ‘USD 10,110.2 million’. This increase is based on a compound annual growth rate (CAGR) of 45.55%.

These findings indicate a significant global investment into AI technology, in addition to a lucrative future from integrating AI into supply chains. In addition, research on AI adoption found that,

By 2023, at least 50% of large global companies will be using AI, advanced analytics and IoT in supply chain operations.

Gartner, a leading global research and advisory firm, believes that over the next four years, the presence of AI in warehouses will also increase. In fact, by 2023 collaborative robotics will supplement ‘over 30% of operational warehouse workers’.

The goal of integrating AI into supply chains is to support high demand with greater visibility and efficiency. Experts also link the integration of AI enhanced technologies, such as the Internet of Things (IoT), with ‘revenue increase or cost savings’. Let’s take a deeper look at the top ways this technology will impact the industry this year.

Robotics & Machine Learning

Robotics will play a significant role in improving warehouse performance. There has been skepticism in the past that advanced robotics will replace human labour, however, this is not the case. On the contrary, robots and workers will work in a collaborative working environment.

Research indicates that these ‘intelligent and aware’ machines are best suited for ‘complex motor control’. Furthermore, to enable workers to focus on their strengths and core responsibilities, robotics can independently help move goods around.

Maintenance Consistency

The connection between AI and efficiency is also shown through the use of data automation. Experts on the integration of AI into supply chains believe that by implementing this technology into equipment, a company will save. According to SupplyChain247,

Artificial intelligence collects information from sensors on equipment, which combines with maintenance records.

This efficient, streamlined process will ensure transparency on maintenance and improved productivity is achieved. For instance, extended research found that integrating AI could improve ‘productivity by 20% and cut maintenance costs by 10%’.

Delivery Optimization

The advanced learning of AI also provides the added benefit of improving efficiencies throughout the shipment life cycle. This includes Omni-channel modes of transport such as tracks, rail, ocean and air. In the fall of 2018, Forbes spoke to the integration of ORION, an ‘AI-powered GPS tool’ that UPS had adopted. This technology removed barriers caused by traffic and back-tracking, by collecting and transmitting data by customers, drivers and vehicles. The insight generated from this data would be utilized to pin point ‘the most optimal routes’. This is a great example of how AI can contribute to improving efficiencies while also improving cost-savings across the organization.

Based on the above findings, Artificial Intelligence (AI) will equip supply chains with the support and optimized solutions they require to improve efficiencies. From warehouse and robotics, to improving maintenance consistency and delivery optimization, AI will continue to drive the market forward.

3PLS FOCUS ON CUSTOMER EXPERIENCE TO DRIVE E-COMMERCE FULFILLMENT

To deliver exceptional E-Commerce fulfillment, third party logistics (3PLs) providers must ensure they have a comprehensive end to end customer experience.

In 2018, online sales of physical goods amounted to 504.6 billion US dollars and are projected to surpass 735 billion US dollars in 2023.

According to the above statistic, e-commerce sales in the United States are generating incredible success. As the convenience of online shopping continues to increase the amount of orders, there is a greater need for businesses to move quickly and efficiently. On a global scale, the total revenue generated from retail e-Commerce is forecasted to exceed ‘4.88 trillion US dollars by 2021’. This will involve a tremendous amount of complex distribution, while also requiring businesses to position e-Commerce fulfillment as a top priority.

Experts believe that focusing on the customer experience is crucial to help e-commerce businesses grow and prosper. In 2018, same-day or next-day delivery was a significant online shopping trend. Consumers are now willing to pay more for prompt service, and consider these delivery options when choosing through competitors. However, they still look for fast and efficient service that’s free!

To address the growing expectations of e-commerce markets, 3PL prioritize e-commerce fulfillment objectives. This week Morai Logistics discusses the importance of e-commerce fulfillment and what areas logistics providers should look at to deliver superior customer service.

E-Commerce Fulfillment at a Glance

The definition of fulfillment involves the ‘process of receiving, packaging and shipping orders for goods’. There is a wide checklist of steps that must happen in order for a shipment lifecycle to meet and exceed customer expectations. Put it simply by Logistics Management, ‘e-commerce and multi-channel distribution have increased the complexity of distribution exponentially’.

When a customer purchases a product online, a business must go through many steps before they receive their order. Full-service fulfillment involves an ‘end-to-end solution’, which goes beyond packaging and delivery. Businesses who ensure a comprehensive service, also offer transparency with shipments and updates, management of inventory and personalization.

Trends in Fulfillment

There are a variety of trends in regard to order fulfillment, which are driven by the boom in online shopping. Let’s take a closer look at how 3PLs can help businesses move forward and deliver a positive customer experience.

Omni-Channel Distribution

E-commerce has broken down global borders, which means businesses, especially those who offer product internationally, must create expansive networks. This is also known as Omni-channel distribution. To meet consumer demands, 3PLs offer different modes of transportation. Furthermore, distribution centres and warehouses equip businesses with support to deliver same-day or next-day consumer requests.

Relationship Management

Also known as networking, 3PLs must build on their local and extended network of carriers, shippers and distribution personnel. According to SupplyChain247, ‘delivery partners are a crucial part of your fulfillment chain’.

Supply Chain Experience

A supply chain functions efficiently and effectively only if personnel throughout the entire chain are working together. In order to deliver exceptional customer service, it’s important for 3PLs to integrate optimized solutions that connect ‘supplier, warehouses and delivery partners’.

Visibility

In addition to providing a faster and on-time delivery service, customers also want to see transparency throughout the entire journey. This involves providing customers with information on their orders including shipping time, delays and updates to drop-off or pick-up.

Mass Inventory & Technology

As companies work toward producing and delivering high volumes of product, there is a greater need for inventory space. 3PLs offer solutions that improve the overall inventory of goods. With their network relationships and distribution centers, they can offer businesses a cost-effective solution for managing products.

The Shift Toward a Demand Chain Model

Experts say demand-chain models are an effective solution for supply chains to meet the increased need for immediacy and improve the customer experience.

Today, consumers crave instant gratification when searching for products and services online. They want access to information and results in an immediate time frame, and this transcends throughout the buying funnel. It especially includes delivery. To meet consumer demands, there are high expectations on companies to offer same-day shipping options to their customers.

While companies work hard to get packages and goods to consumers efficiently, Forbes states,

…there comes a point where supply chain simply can’t get a package to you any faster.

This puts pressure on supply chains to evolve their strategies and execute efficient and effective solutions to meet these expectations. Distribution centers (DC) have been an integral component to a supply chain, and provide many benefits with respect to meeting these expectations. In 2017, the United States warehousing market, accounted for $148.7 billion. The total number of warehouses accounted reported in the same year was 17,353. There is a growing need for companies to expand their distribution capacity to meet the output requirements for consumers.

However, while expanding DC’s provides improved delivery solutions, experts believe a shift toward a holistic demand-chain would take it one step further. This article by Morai Logistics discusses the fundamentals of the demand-chain and the beneficial outcomes it could have as a supply chain model.

What’s a Demand-Chain?

According to Forbes, a demand-chain is ‘a state where production is localized and immediate’. It represents a shift from relying on centralized manufacturers, to autonomous machines. Supply Chain Market describes this migration as ‘the next generation in fulfillment’. It further responds to the extensive growth of ‘net economy’ or e-commerce, which has been fueling a high level of demand for immediacy.

To compete into this high-performance global market place, companies must follow a model that considers the following key metrics:

  • Product assortment
  • Fulfillment and execution
  • Visibility
  • Customer loyalty and retention

The overall added benefit of focusing on demand and pull, is that customers will get their products on demand. Simply put by Forbes, ‘there is a fast, on-demand creation of goods in the exact amount necessary’.

Top Reasons to Consider Demand

Demand-Chain models are a step toward meeting customer needs through the application of technology and demand-focused strategy. There are many reasons why this model is favourable for high-performance industries, such as supply chain and logistics.

Improves Customer Experience

Developing optimized solutions to improve on-time delivery and immediacy, has been primarily motivated by the objective of carrying out a positive customer experience. Thus, by improving visibility and leveraging technology to create more efficient modes of production and delivery, immediacy can be met.

Reduces Wasted Inventory

Businesses may run into various challenges when trying to produce and deliver large outputs, which can ultimately waste inventory. Possible reasons could be overproduction, delays or order defects. As a result, unnecessary inventory leads to a waste in product and money for the business. A demand-chain enables businesses to follow a just-in-time model where products are produced and delivered when needed.

Optimizes Order Fulfillment

Furthermore, a reduction in wasted inventory, a demand-chain model also aligns order fulfillment with delivery performance. When an organization can effectively understand the level of production required, they can better predict how to allocate resources to carry out the shipment life-cycle.

5 Ways RPA Optimizes Supply Chain Management

Robotic Process Automation (RPA) is an effective solution that helps improve efficiencies, reduce costs and optimize productivity.

Findings on the global RPA market, project a ‘Compound Annual Growth Rate (CAGR) of over 27%’ throughout 2013 to 2024. By 2024, this would amount to over 7, 000 Million (USD).

In a recent survey on RPA adoption, 17% of supply chain professionals believe RPA will be implemented in their organization’s by 2020. Furthermore, two thirds of respondents stated that their organization currently uses or are exploring this technology.

According to McKinsey & Company, RPA is defined as,

A type of software that mimics the activity of a human being in carrying out a task within a process.

Integrating this technology into any organization helps reduce human error and cost, while improving ROI and productivity. However, although skepticism exists in matters of replacing human jobs with automation, RPA actually provides many benefits to supply chains. Therefore, RPA is emerging as an effective technology for many industries, including supply chain and logistics.

This infographic by Morai Logistics outlines the top 5 ways RPA help improve supply chain management processes.

Robotic Process Automation: Supply Chain Optimization

morai-infographic-5-rpa-optimizes-supply-chain-management (3)

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? Interested in what we do as a 3rd party logistics provider? Then don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

From Adoption to Digital Transformation
Experts say that supply chains must move from adoption to digital transformation if they want to improve efficiencies, operations and take their businesses to scale.

For the North American transportation supply chain and logistics industry, last year saw a widespread adoption of digital technologies. Predictive analytics proved beneficial to providing end-to-end visibility of supply chains, and ensuring efficiency with on-demand deliveries. When applied to operations, cloud-based technologies helped businesses scale, improved workflow productivity and created opportunities for competitive differentiation. Furthermore, robotic and automation armed warehouses with optimized levels of productivity and improved customer service.

Although the adoption of emerging technologies created solutions for transportation supply chains, the industry still faces many significant challenges. The increase in consumer demand for immediacy and personalization, in conjunction with pressures of the nationwide labour shortage, requires more than digital adoption. To further improve operational efficiencies, reduce costs and create opportunity for bottom line profits, supply chains must move from adoption to digital transformation.

According to Supply Chain Management Review,

Digital transformation is perhaps best explained as the implementation of new technologies to accelerate operations, sales and customer service, back office productivity and, ultimately, the growth of the business from end-to-end.

Whether the customer is a shipper, retail wholesaler or vendors, the goal of digital transformation is to ultimately improve the customer experience.

This week Morai Logistics provides an overview of what digital transformation looks like in transportation supply chains. The benefits moving from evolving from simply adopting digital technology to a comprehensive and whole-scale transformation will also be reinforced.

Digital Transformation of Supply Chains

There are many industries across the world recognizing the need to digitally transform. North America ranks at the top of the global market. By 2022, global statistics forecasts that spending on ‘the technologies and service that enable digital transformation’ will reach USD 1.97 trillion. However, in a study on the adoption of digital transformation within five major sectors, supply chains reported the ‘lowest level of digitization’.

Although digital transformation is considered to be a main focus for many, the truth is, this process fails more than it succeeds. According to the found of Supply Chain Insights, there are four common mistakes businesses make:

  • Disconnect with vision and strategy on implementing digital transformation
  • Transformation process does not include ownership from the business
  • Focus is not on meeting the needs of the customer market
  • Lack of partnership with innovative technology companies

Let’s address mistake number one: disconnect with vision and strategy. Before a supply chain executes digital transformation, they must understand the trends shaping the need to transform.

Universal Need for Digital Transformation

There are many reasons why digital transformation can improve the end to end profits of an organization. They may change depending on the industry. For supply chain and logistics, the following three reasons why adoption should move to transformation.

Customer Experience

Today, customer experience is at the top of the board when it comes to strategic priority. From social media to online buying, to smartphones, consumers have the power to connect anywhere at any time. This has changed the buyer’s journey significantly. Consumers expect a heightened level of transparency and personalized and engaging experiences.

Employee Support

The current capacity crunch and nationwide driver shortage, also requires organizations to look at employee fulfillment. Integrating digital tools throughout the supply chain, will promote efficient methods of productivity and communication. This can have an incredible impact on performance and empowerment, while also giving more time to focus on ‘streamlined decision-making’.

Strategic Insights

The implementation of technologies throughout all facets of a supply chain can help generate large data sets, known as Big Data. Online interactions between shipper and supplier can generate unceasing amounts of data. However, without appropriate tools to translate these numbers into valuable insight, meeting the needs of either party becomes challenging. Therefore, digital transformation ensures that innovative technology solutions are in place to provide strategic data that will ultimately achieve success.

3PLs Offer Optimized Solutions to Nationwide Capacity Crunch

As the nationwide capacity crunch drives into the New Year, third party logistics (3PL) providers offer shippers reliable and cost-effective solutions.

Last year the ‘nationwide truck shortage’, also referred to as the capacity crunch, was a significant challenge for the transportation industry. Carrying over into the New Year, the increase in freight rates and subsequent decrease in drivers continues to impact shippers tremendously. In December it was reported that the ELD mandate was effecting not only trucking, but other modes of transportation. This movement also impacted ‘ocean shipping, intermodal and air freight’. With consumer demands at an all-time high, the outcome of implementing this type of directive has caused a variety of issues. Experts identify increased rates, shipment delays and bottlenecks amongst the most common setbacks shippers face.

In March of 2018, Morai Logistics presented some of the optimized solutions third party logistics (3PL) providers offer shippers. According to Supply Chain Dive,

3PLs can step in and usually save money for the shipper while helping the shipper get a faster route.

While the capacity crunch isn’t expected to go away anytime soon, 3PLs continue to develop optimized solutions to help shippers become proactive to industry demands. This includes a combination of technology integration, networking and Omni-channel opportunities.

This article outlines the various obstacles the transportation industry faces caused by the capacity crunch. Furthermore, it defines why 3PLs remain the prime method to ensure an efficient and cost-effective shipment life cycle.

Impact of Capacity Crunch

The capacity crunch has placed a heavy burden on the transportation supply chain and logistics industry. The Electronic Logging Devices (ELD) mandate that was strongly enforced last year has deterred many drivers from the industry. This creates additional setback for shippers, as a decrease in drivers means an increase in freight rates and inefficient delivery. While strategies to improve driver retention and job satisfaction should be a high priority, the obstacles shippers face is also important.

According to the 2018 Inbound Logistics Annual Survey:

  • 81% of shippers felt their biggest challenge was ‘finding capacity’
  • 78% of shippers experienced rate hikes
  • 94% of shippers stated that ‘driver-related costs’ was important

The capacity crunch forces shippers to seek reliable, alternative transportation methods at cheaper rates. This can be very challenging as competition and a lack of drivers continue to increase costs. However, third party logistics (3PL) provider’s offer optimized solutions to both carriers and shippers that can help alleviate some of this burden.

3PL Solutions

In addition to price and capacity, a nationwide truck shortage can significantly impact the reliability of deliveries and the quality of customer service. Research on the preferences of shippers who choose ‘motor carriers’ found that:

  • 84% say reliability
  • 62% say customer service
  • 73% say price
  • 45% say capacity

3PLs must develop solutions that enable shippers to execute orders efficiently and cost-effectively to meet the increase in consumer demands. The widespread integration of advanced technology has made considerable contributions to the way 3PLs service shippers and carriers. However, below are the most relevant ways these transportation partners can help shippers impact by a capacity crunch.

Cost-Effective Rates Due to their large-scale industry presence, 3PLs are able to offer better rates. They can also negotiate better than small companies or independent drivers, which help offer shippers affordable options.

Network of Carriers Shippers benefit from the substantial relationships that 3PLs have built. This provides access to Omni-channel and intermodal modes of transportation that offer multiple avenues to transport products efficiently.

Digital Maturity The integration of technology will continue to shape the way warehouses operate and communicate. It will also provide companies with the ability to extract data to create insight on forecasts and patterns. 3PLs continue to integrate digital processes to improve the visibility of shipments. In addition, emerging platforms such as predictive analytics also enable shippers to take a proactive, rather than reactive approach, to operations and delivery.

There is no denying that the impact of the ELD mandate and driver shortage has created obstacles for both shippers and carriers. While the capacity crunch remains a top concern to the transportation industry in 2019, 3PLs continue to provide effective solutions.

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.

How Supply Chain Orchestration Improves the Customer Experience

Experts recommend supply chain orchestration as an effective solution to help organizations deliver positive customer experiences.

When it relates to personalization, 76% of customers expect companies to understand their needs and expectations. Findings also indicate that 67% of customers have switched vendors to seek ‘a more customer-like experience’. Customer expectation is a significant driver to the way organizations operate. Providing both convenience and speed is crucial to building a customer-centric business and building long term relationships with those customers.

Logistics are learning to adapt to the demands of customers, and organizations are seeking the most effective solutions to remain competitive. Supply chain orchestration (SCO) has been connected to providing a positive customer experience. According to supply chain experts,

SCO enables you to make informed, conscious choices about how to serve your customers better.

Orchestration benefits ecommerce markets in particular because it increases a customer’s accessibility to a larger variety of products and services. Therefore, customers are provided with a wider variety of delivery options due to an expansive ‘network of operators and carriers’. In addition, SCO also provides a variety of benefits that help close the gaps when it comes to visibility and efficiency.

This article uncovers the foundation of supply chain orchestration and how supply chains can leverage it to better the customer experience.

Supply Chain Orchestration Foundations

To understand how supply chain orchestration improves the customer experience, it’s important to first understand the need for SCO. As mentioned above, consumer demand is changing dramatically in response to a variety of factors including a significant increase in accessibility. For instance, customers who shop online are becoming increasingly expectant of fast delivery, personalized customer experience and order fulfillment.

A poor experience can influence a customer’s intent to re-purchase. Research found that 67% of customers would stop buying from a company if a competitor offered a better experience. Omni-channel touch points and visibility must be a core focus to organizations who cater to different generations and demographics. To ensure all consumer demands are being met, a seamless supply chain operation must be implemented.
According to Supply Chain 247,

Successful SCO is based on the right blend of elements for end-to-end oversight and control, but at the root, it is driven by a desire to put the customer first.

The goal is to create a supply chain network that takes into consideration both the bottom line and customer experience.

The Benefits of SCO

By implementing SCO, you will provide a variety of benefits to improving customer satisfaction in a cost-effective way. Inbound Logistics identifies a number of trends supply chain orchestration can provide.

1. Increase Visibility

Personalization is only successful when an organization can understand the needs of their customers and deliver. SCO enables organizations to take a holistic look at their entire supply chain. Thus, they’re able to optimize their processes to delivers ‘the maximum volume of on-time, in-full orders’.

2. Optimize Inventory

An increase in orders requires organizations to ensure warehouses and inventories are abundantly stocked and ready for delivery. Therefore, experts suggest streamlining their networks which includes ‘warehouses, 3PLs, suppliers, and in-transit stock’.

3. Maintain Efficiency

As supply chains strive to meet increased demands, they become complex. This complexity may sometimes hinder the customer experience. According to their findings, Inbound Logistics found 95% of global companies agreed that discrepancies had increased. Implanting SCO would help create better processes that stimulate progression through the coordination of the right ‘internal and external systems.’

Organizations should continue to focus on creating innovative and creative ways to improve the customer experience. This is primarily important today because of the incredible level of accessibility online shoppers have. Based on the above information, supply chain orchestration proves to be an effective way to ensure a positive customer journey. Therefore, organizations should continue to look at ways such as SCO to optimize their supply chains.