Logistics Focus: 3 Things to Explore this Year

Source: Wikipedia Commons

The world of logistics is a dynamic and constantly evolving industry; while some major pressures and worries of last year carry over onto this year, there are always new trends of focus for the industry as a whole all along the supply chain. This week we’re going to reveal three trends that we think the industry will be taking a closer look at this year.

These particular areas of focus are unique, as we’ve mentioned there are areas in the logistics industry those still needs to be addresses, such as the need for particular talent along the supply chain (e.g. truckers). These issues on the other hand, stem for studies and events (like changes in the industry with regards to consumer demands and/or technology) that have motivated companies to exert effort into improving.

1 – It’s All About Risk

During the second half of 2013, there was a surplus of articles addressing the need for companies to pay more attention to supply chain risk and to take steps in mitigating said risk as a way to address logistic challenges such as the 24th annual State of Logistics report predicting slow growth.

Many disasters struck last year, urging supply chain executives to tackle things like tsunamis, floods, and hurricanes. A survey by the American Productivity and Quality Center (APQC) suggested that while all this talk was happening, companies are struggling to address the issue effectively. About 83% of respondents reported that in the past year, they were caught off-guard by unexpected supply chain disruptions. We expect that efforts will be taken by affected companies to come up with ways to properly mitigate the effects of such large disasters. To see the white paper on this issue, click here.

2 – Returning the Private B2B Marketplace

Spend Matters released a post last week predicting that the private B2B marketplace will return in the logistics industry this year to accommodate for a supply chain revolution. The private B2B marketplace began in the early 2000s:

Independent electronic B2B public marketplaces gave birth to the software to run them, which then gave birth to the brick and mortar companies that wanted to control their own destinies to use such software to run industry consortia marketplaces. But, they found the technology lacking in deep support for much beyond things like reverse auctions, simple directories, and equally simple catalogs and order management.

Because of new technology needs and the realization that deeper support was needed for these complex processes, these marketplaces died off. But there is a strong chance for their return as these types of companies have begun to think more broadly about the extended supply chain and technology. Thus, there is a hint at the return of the marketplace with the transition into cross-industry supply chain Platforms as a Service (PaaS).

3 – Sourcing Hub Implementation

Research & Development (R&D) Magazine also released a blog post last week suggesting that the ‘Sourcing Hub’ could create a more efficient supply chain. Two papers co-written by University of Illinois expert Anupam Agrawal. He explored how the lack of communication between the big players at the beginning and end of the supply chain spectrum does not allow for gaining efficiencies in costs, design, and materials. Agrawal proposes a supply chain sourcing hub as a potential solution for this issue and defines it as:

… A collaborative center involving the firm, its suppliers and raw material suppliers as a mechanism for capturing and deploying sourcing knowledge of the raw material—would be beneficial.

In this way, Agrawal suggests that buyers and suppliers can congregate and evaluate what is best for all parties involved. It will be interesting to see if companies will be partaking in efforts to organize a trial sourcing hub in order to see how well it will perform.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, 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!

1 thought on “Logistics Focus: 3 Things to Explore this Year”

  1. Thanks for Sharing the Sourcing Hub idea, Kelli! It will be interesting to hear from others. I can of course answer any queries ! — Anupam Agrawal

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