Technology - 5 Technologies Changing Supply ChainsWith advances in technology influencing supply chains in a large variety of ways, it’s worth knowing just what those technologies are and how they are generating change. 

Business fields of all kinds are in the midst of a great transformation driven primarily by technology. As such, technological innovations are coming fast and heavy and companies are having to adapt to them at a rapid pace to keep up. It’s no different for supply chain companies. Technological advancements are reshaping the way supply chains operate. With that being the case, it’s critical that companies keep track of them in order to stay competitive.

A McKinsey article pointed this out, stating,

For all the effort that companies devote to improving the performance of their supply chains, relatively few have unlocked the full potential of digital technologies.

This week’s article by Morai Logistics pinpoints 5 technologies that are having a significant impact on supply chains today.

Artificial Intelligence (AI)

AI is perhaps the most talked about technological innovation in supply chains and elsewhere. And for good reason. It is having an impact on supply chains in a variety of ways already and that impact is set to grow. It can be used for forecasting internally and externally.

This means AI can track the state of inventory, the health of machinery, have the latest information about weather patterns or conditions, and much more. Moreover, in a time when data and the insights that can be gleaned from it are paramount, AI can analyze that data and provide precise recommendations based off it.

The Internet of Things (IoT)

IoT is soon to be responsible for over a trillion dollars in spending annually around the world. In turn, as devices that can connect to the internet grow more developed, the need for them by businesses will also grow. With that said, in the world of supply chains, IoT is making its presence felt. It can link operations, assist the effectiveness of automated processes, and make real-time tracking of products easier.

Thus, whether it be live security cameras or real-time trackers on merchandise, IoT has a lot to offer supply chains. Through IoT, supply chains have the potential to be more transparent and encourage stronger relationships between businesses and clients.

Blockchain

Blockchain technology, with each passing year, becomes more inextricably linked to supply chains. There are several reasons for this. For one, blockchain meets the strong demand for transparency in supply chains. By being able to follow the product on its journey through the supply chain and validate its movement each step of the way, blockchain ensures clarity to the process.

Additionally, blockchain also affords supply chains security, as it has no central authority, has immutable data, and allows for real-time tracking. Finally, blockchain also helps drive down costs since it gets rid of middlemen and speeds up product movement.

Cloud

Cloud-based supply chains are proving to have a number of advantages over traditional supply chains. Firstly, they make supply chains more efficient by making the most out of automation and data, reducing waste. Second of all, clouds allow for seamless scalability, avoiding the headache of antiquated operational expansions. In addition to that, scalability also means supply chains become more cost-effective as they grow. Since the expansions themselves no longer add costs.

5G

The incredible increase in internet speed 5G is set to bring with it will enhance supply chains considerably. Consequentially, all the previous technologies mentioned here are dependent to some degree or another on the internet. Furthermore, in many cases, such as with real-time tracking and visibility or data collection, faster internet means better performance. Thus, rather simply, 5G will be a big leap forward for supply chain companies, as it will allow them to achieve many of the outcomes they want faster and more effectively.

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Research on technology in supply chains shows a positive relationship between virtual reality and enhanced efficiency and visibility.

By 2020, virtual reality (VR) is estimated to be valued at USD $70 million. VR has enabled many industries to take an innovative approach to engaging customers. Since the e-commerce boom, retailers have found engaging customers both in-store and online very challenging. From an e-commerce perspective, VR helps companies create realistic shopping experiences. However, v-commerce also provides both the ‘interactive experience of bricks and mortar’ and the ‘convenience of e-commerce’.

While this technology has received a lot of recognition in the retail industry, it has also gained considerable attention in supply chain and logistics. For many years visibility and efficiency have been top challenges for supply chains. Also, the customer expectations on transparency and fast-delivery is at an ultimate high. How could an interactive technology tool like VR, add value to warehousing, shippers or suppliers?

This article by Morai Logistics looks at the ways VR is shaping the way supply chain operate to address current challenges faced in the industry.

Supply Chain Challenges

Moving goods from point A to point B sounds like a straightforward transaction. When a customer buys product and requests it to be shipped online or in-store, it’s processed through a warehouse and is then delivered directly to the customer. Although the shipment life cycle should be this simple, the end to end process is far more complex.

The ‘king consumer’ was listed as the number four top challenge facing supply chains this year. According to supplychain247,

High consumer expectations about delivery and shipping of packages will continue to challenge retailers, carriers and logistics service providers, forcing fundamental changes to warehouse design and location and driving up wages and competition for all types of supply chain labor.

This increase in consumer expectations has indeed caused considerable pressure on the supply chain and logistics industry. E-commerce has provided customers with easy click-and-go purchasing, and has also increased their expectation for faster product delivery. Furthermore, customers want greater transparency on when and where their orders are throughout the shipment life cycle. There is an incredible emphasis on ‘ever-faster delivery’ services as well.

Imagine exceeding customer expectations better than a competitor? That would give businesses incredible competitive advantage. Utilizing technology to create engaging customer-facing experiences has been consistent over the years. However, integrating VR into supply chains is different.

Virtual Supply Chains

To understand how technology can optimize a supply chain, it’s important to understand the basic concept behind the technology. Virtual reality is ‘an artificial, computer-generated, three-dimensional environment’. There are a variety of electronic equipment that work together to create this ‘sensory stimuli’. These items may include specialized:

  • Goggles
  • Head-mounted displays
  • 3-D images

The adoption of VR equipment is on the rise, with ‘mid- to high-end headset sales forecasted to reach USD $52.3 million by 2020. Using this sensory equipment takes the user on a journey outside of their physical space. However, how can this help supply chains achieve greater efficiency and agility?

Research on the benefits of VR in supply chains focuses on delivery, predictive modeling and performance. For instance, according to Forbes, using VR can also provide managers with real time insight into ‘any site at any time’. Below is a list of more benefits that VR provides supply chains.

  • Access on-site facilities at any time in the event of natural disasters or unexpected occurrences
  • Optimize delivery management and package inventory
  • Offer enhanced safety throughout the delivery journey
  • Ensure accuracy when delivering products to customers

Therefore, implementing virtual reality into supply chains is effective in improving efficiency, transparency and speed. It not only enables companies to execute seamless delivery processes, but it also shifts the focus toward the customer.

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In response to growing demands, experts consider cloud logistics as an optmization tool for the transportation supply chain industry in 2019.

Technology is the source of continuous global economic and social change. In addition to improving our every day lives, it also enables industries to advance and optimize communications, operations, production and servicing. For the supply chain and logistics industry, technology continues to shape the way products are distributed across the globe. It has also pushed leaders to explore digital maturity and leverage different platforms to help compete with demanding markets.

According to PwC, cloud technology addresses setbacks associated with scalability, flexibility and efficiency across an organization.  As with any new internet based technology, uncertainties include ‘unclear development costs and data security’. Regardless of these risks, Cloud logistics is expected to make a significant impact on the transportation supply chain industry in 2019.

This article by Morai Logistics looks into the way cloud logistics is shaping the supply chain and logistics industry. A specific focus will discuss the role of transportation management systems in advancing operations.

Cloud Logistics in Supply Chains

There are a few reasons why cloud logistics has become an innovative move for supply chains. Connected logistics not only drives revenue, but it also improves the way processes are managed. Cloud technology has experienced incredible growth across a variety of industries. Forbes found that,

The Worldwide Public Cloud Services Market is projected to grow by 17.3 3% in 2019 to total $206.2 billion”.

Furthermore, by 2023, the ‘global connected logistics market’ will reach ‘$73,846.1 million. In response to increased consumer demand, leveraging cloud technology helps organizations do business better. Oracle, a global leader in computer technology, creates cloud logistics solutions to help logistics organizations achieve the following:

  • Streamline transportation networks
  • Optimize warehouse operations
  • Push out efficient fulfillment strategies
  • Simplify business

The advancement of cloud technology also enables transportation supply chains to remove manual and inefficient steps throughout the end-to-end experience. Therefore, the end goal is to optimize the supply chain to create solutions that help meet increased consumer demand. In addition, cloud logistics also helps organizations automate processes, which improves productivity.

Current Barriers to Cloud Integration

According to a global survey on enterprise risk, there are a variety of reasons shaping the way organizations feel about cloud computing. Six risks were found to be “somewhat of a challenge” to over 50% of respondents.

  • 54% reported Governance
  • 51% reported Lack of resources/expertise
  • 53% reported managing cloud spend
  • 51% reported security
  • 52% reported compliance

The above risks are quite common when integrating new technology into supply chain operations and processes. In past articles, Morai Logistics has discussed the importance of developing a labour force with the advanced skills to support technological advancements. Cost is also a factor many supply chain organizations look at when implementing new solutions. Thus, integrating cloud logistics is also an optimal cost savings tools. Its core function is to help streamline transportation, operations and production processes.

Forward Thinking

In response to an increase in consumer demand and expectation, the supply chain and logistics industry must seek innovative solutions to remain competitive. Technology shapes the way organizations do business and interact with customers. Therefore, it’s beneficial to implement optimization tools that are aligned with consumer behaviour. Despite the raised challenges, cloud logistics is an optimization tool that can help supply chains achieve efficiency, visibility and scalability.

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With 43% of supply chains using smart sensors, the industry must continue to integrate IoT tools to ensure efficiency and agility.

Last week, Morai Logistics presented the benefits of implementing smart manufacturing into supply chains. The integration of technology into factory level operations, ‘helps to create opportunities that improve efficiencies, productivity and operations on the ground floor’. By smartening up manufacturing, supply chains can ensure a high level of visibility across the shipment lifecycle. In addition, there is less reliance on manual shipment processes and more focus on automation.

If we trace smart manufacturing back to its root technology, we will find the Internet of Things (IoT). Industry experts have been integrating IoT theories and technologies into a variety of ‘machine to machine (M2M) communication’. Smart sensors, or instance is a new technology that is ‘supporting supply chain innovation and the smart factory’.

The global market share of smart sensors will grow to USD $21.5 billion by this year and USD $39 billion by 2022. Their advanced ability to uncover insightful information from data position smart sensors as a valuable technology tool to supply chains. In fact, 83% of supply chain leaders believe sensors, robotics and inventory optimization tools, are beneficial for competitive differentiation.

This week Morai Logistics will discuss how IoT technologies such as smart sensors, help the supply chain and logistics industry become more efficient and agile.

Smart Thinking with Smart Sensing

It was forecasted that by this year, the global IoT market will generate over USD $1.7 trillion. Statistic also show that the number of connected devices will be 20.35 billion. The Internet and technology continue to create opportunities for greater connection and communication. In order for supply chains to keep up with demand, supply chains must adopt and implement these tools.

There are many factors to consider when developing a comprehensive smart supply chain. The advancement toward smart manufacturing helps the industry develop efficiencies in operations and productivity. Furthermore, the use of smart technologies and tools is a huge part of smartening up the journey of products throughout the shipment life cycle.

Smart sensors, for instance, has the ability to harness complex data sets and translate them into actionable and insightful information. Sensors have been used to execute traditional operations, which included tracking orders and maintaining inventory. However, there are notable differences in new smart sensors. According to Deloitte,

Smart sensors are advanced platforms with onboard technologies such as microprocessors, storage, diagnostics, and connectivity tools that transform traditional feedback signals into true digital insights.

It’s an innovative way of extracting data to enable supply chains to make smarter decisions. Statistics show that 43% of supply chain leaders stated their companies ‘use sensor technology’. Furthermore, experts say that smart sensors enable ‘always-on supply chains’. By integrating smart technologies such as sensors, supply chains can benefit in many ways.

Benefits of Smart Sensors

To keep up with an upward movement in consumer demand and expectation, supply chains must look at current barriers. Common focus has been on improving visibility, productivity and operational efficiencies. Research shows that the integration of IoT technologies help in the following areas:

  • Efficiency
  • Responsiveness
  • Business Interuption

Smart sensors aid in collecting data and using it to help organizations with improved decision making. Furthermore, this enables management to reduce certain interferences that may include ‘missed handoffs, cold chain exceptions or theft’. The benefit of integrating smart sensors also includes ‘informed scenario-based contingency planning’. In addition, supply chains can improve their agility, ensure customer satisfaction and dodge unnecessary costs.

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

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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.

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Augmented reality (AR) and virtual reality (VR) are ‘revolutionary’ emerging platforms that are changing the game for supply chains.

From reducing cost to improving efficiency and accuracy, AR/VR could significantly impact the way orders are processed and shipped. The Global Augmented and Virtual Reality market is expected to reach ‘209.2 billion U.S. dollars by 2022’. With the ability to enhance any version of reality, this technology could change the way we move product from point A to B.

On the retail side, AR/VR is enabling customers to engage with products and their features without even stepping foot into a store. It also provides personalized experiences through the creation of ‘virtual fitting rooms’ and ‘virtual maps’. From a marketing and advertising perspective, there is a considerable amount of value that comes from the creation of ‘VR- and AR-powered campaigns’. It provides companies with the opportunity to give their consumers a real-time experience with their products.

In addition to machine learning and predictive analytics, AR/VR technology is also a game changer for the supply chain and logistics industry. From improving training and education, to ensuring a ‘cost-effective, fast and error free’ shipment lifecycle, there are significant benefits.
This article explains the technology behind AR/VR and uncovers how supply chains can use this platform to improve their processes.

A Brief History

Although AR/VR has become popular in the digital world only recently, the concept behind augmented reality dates back to 1957. Cinematographer, Morton Heilig, created the first ‘attempt at adding additional data to an experience’ known as the Sensorama. Almost four decades later in 1990, researcher Tom Caudell, creates the term we refer to now as augmented reality.

According to Investopedia, by definition,

Augmented reality combines real and computer-based scenes and images to deliver a unified but enhanced view of the world.

Virtual reality takes the experience once step further for users by immersing them in a ‘fully artificial digital environment’. Rather than simply enhancing a version of reality with images, they can actually move and hear. VR applications are also compatible with smartphones, which provides consumers with new and convenient ways to shop nd interact. With the ability to create accurate and immersive versions of reality, this technology provides the opportunity for supply chains to improve their processes and operations.

AR/VR in Supply Chains

As the expectations of on-time deliveries, efficient service and personalized customer experiences increase, there is a need for more supportive technology. According to Forbes, AR/VR help combat the varying complexities facing the supply chain and logistics industry today. As mentioned, this is a cost-effective solution that could also contribute to creating ‘fast, and error free’ shipment lifecycles.

The following scenarios describe how AR/VR can improve supply chains:

  • Provides real-time information on ‘manufacturing facilities, distribution centers, and warehouses’.
  • Delivers products on-time by providing the best transportation routes.
  • Reduces the possibility of damage by providing detailed information of all packaging and contents to improve transparency.
  • Reinforces security by providing drivers with ‘facial recognition technology’ to confirm customer verification.

Industry Reviews on AV/RV Technology

Mehdi Miremadi, Partner at McKinsey & Company, states that this technology creates ‘business value in supply chains’. In addition, statistics show that order fulfillment saw a 30% – 40% improvement last year, while productivity and workflow management also progressed. Senior Principal Analyst at Gartner, Tuong Nguyen, also supports this technology, as he believes AV provides effective training and onboarding to enhance worker capabilities.

The decision to apply an emerging platform to any organization is daunting. There is a lot of consideration that must come with the investment and integration of new processes. However, when applied to supply chains, experts are in favour of AV/RV.

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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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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.