5 Supply Chain Trends to Watch Out For

With supply chain companies having to continually respond to the needs of their respective markets, it’s critical that they stay cognizant of the many structural and operational advances being made in order to remain competitive.

Customers’ expectations about what supply chains should look like in terms of responsivity, transparency, and flexibility are greater than ever. As a result, supply chains are evolving faster than ever to meet and surpass those expectations. In turn, this evolution means monumental changes to the technology, management, and operations of supply chains.

Globecon Freight pointed out the scale of these changes in an article earlier this year,

Supply chain management is undergoing a significant transition that will change the face of shipping and logistics.

This week’s article by Morai Logistics identifies 5 prominent trends taking place and set to take place in the world of supply chains.

Digital Transformation

The need for supply chain operations to be digitized is stronger than ever and will only grow going forward. If supply chains are going to take advantage of the many technological innovations today and in the coming years, they need the infrastructure for it. That means making their operations digital. By undergoing a digital transformation, supply chain companies can lay the groundwork to make their technological progress iterative, not singular. Technology will keep advancing and it’s crucial supply chains keep abreast of it.

Artificial Intelligence (AI) and Automation

Both AI and automation are set to greatly boost efficiency, lower costs, and drive profitability in supply chains. They can work individually or hand-in-hand to improve a range of supply chain processes. These include (but aren’t limited to) warehouse management, forecasting, data collection, equipment maintenance, and waste reduction. AI and automation are only going to become even more powerful, adaptable, and precise in the future. Thus, it’s inevitable that their presence will only grow in supply chains.

Transparency

More than ever before, customers expect to know the state of their product from beginning to end. This means that supply chain companies need to ensure that their chains are as transparent as possible. This is set to be achieved in a variety of ways, including blockchain, transparency mapping, tracking materials, and third-party certification. Blockchain in particular is primed to play a major role in supply chains going forward, as it is a database that’s data cannot be altered. Moreover, the data that’s entered in a supply chain blockchain needs to be verified by everyone in it.

Real-Time Tracking

Building off the demand for transparency but also the continual need to be able to check on the integrity of a supply chain is the advent of real-time tracking apps and devices. These can be wearable devices that employees wear, helping them with a variety of tasks that are then instantly available for review. For example, a warehouse employee can use a device to input data regarding inventory. This data in turn can be viewed by the inventory manager. Additionally, apps can be made available for customers and those overseeing the supply chain, so they can see the data being collected along it to make sure it’s proceeding smoothly.

Customer-Specific Supply Chains

A generic, one size fits all supply chain is quickly becoming a thing of the past. Supply chains are growing increasingly segmented for the sake of customers. In order for customer needs to be met more precisely than before, supply chain companies are recognizing that each supply chain should be uniquely geared to them. In practice, that means dealing with customers directly (a direct-to-customer approach). It also means setting up supply chains to be pliable enough to proactively respond to customer interests.

Supply Chain - Digital Transformation

If supply chain companies are going to evolve to meet the demands of the market, digital transformation has to be central to that evolution. 

Now, more than ever, supply chains are being pushed to grow as a result of the needs of customers. And, no matter how well run a supply chain is, by itself it simply can’t meet those needs. Not without the aid of technology. In turn, there’s no greater way to technologically integrate and streamline an operation than digital transformation.

The numbers bear this out. A McKinsey study showed,

That, on average, companies that aggressively digitize their supply chains can expect to boost annual growth of earnings before interest and taxes by 3.2 percent—the largest increase from digitizing any business area—and annual revenue growth by 2.3 percent.

If they digitally integrate properly, supply chains should see improvements in the following areas, just to name a few:

  • Speed
  • Efficiency
  • Decision-making
  • Communication

This week’s article by Morai Logistics underscores the importance of digital transformation for supply chains. Pointing to some of the most relevant areas of improvement digital tools will bring and how.

Speed

There are a multitude of reasons why digitization should improve the speed of a supply chain. Automation by itself should greatly enhance supply chain speed by conducting repetitive tasks like data collection without human error. Additionally, machine learning can greatly help with predictions that are central to supply chains running smoothly. 

These predictions can involve data within a company, such as the health of machinery so that it can be fixed or replaced before it disrupts operations. The predictions can also involve external data such as market demands, so inventory can be stocked accordingly or weather patterns, so the supply chain can adapt to them.    

Efficiency

Efficiency often goes and hand-in-hand with speed, with the added bonus of leading to more profitability due to less waste. Thus, for many of the same reasons speed is improved, efficiency is too—automation and machine learning. However, in addition to those reasons, digital integration drives efficiency also because it can bring with it artificial intelligence (AI) and robotics. 

AI, much in the vein of automation, can handle tasks that would otherwise be mundane, freeing up the workforce for more important matters. Robotics is useful in several domains, particularly warehouse management, as they can deal with the handling of the inventory. 

Decision-making

In order for a supply chain to perform optimally, the decisions that underpin it have to be precise yet flexible, accounting for customer demands and adaptable to any circumstance. The collection of data, the generation of analytics, and the subsequent insights they give can be integral to understanding a supply chain. 

Moreover, the earlier mentioned machine learning can go a long way in making decisions more informed. As they give suggestions to help with inventory management, scheduling, market fluctuations, and so on.

Communication

As a result of the incredible size of modern day supply chains—often stretching from one side of the globe to the other—it’s critical that communication along them is excellent. Any gap can lead to a breakdown in the entire chain. One digital option to overcome this issue is blockchain technology.

Blockchain provides a database with an immutable and transparent digital record of the movement of products along supply chains. Where, in turn, each new piece of data has to be validated by every player in the supply chain. Consequently, there is a continual mutually agreed upon data trail of what is happening each step of the way. 

Supply Chain - Customer Service and Technologies that Will Deliver it

Despite all the talk about blockchain technology, one of the preeminent challenges supply chains still face is customer service, and there are several technologies that could be the key to addressing it.

Customer service is an ongoing priority in the supply chain industry. Customers, now more than ever, need a seamless experience across a supply chain. Customers want their orders delivered faster. They want them delivered more accurately. They demand transparency throughout the process. Moreover, they expect an ability to track their deliveries. And, in turn, they expect inventory to meet their demand. More than anything, customers expect an experience modified to their individual needs.

A 2018 Logility and APICS survey on supply chain priorities revealed that,

30% highlighted the need to respond to customer mandates for faster, more accurate and unique fulfillment as a top business priority moving forward

The industry is well aware of the importance of customer service and is making it a top priority to solve. For companies to address this issue, however, they’ll need to adopt the precision, productivity, and granularity technology brings.

This week’s article by Morai Logistics details the difficulties customer service presents supply chains and how various technologies can solve them.

Artificial Intelligence (AI)

The term “AI” is so prominent in so many industries that are dealing with or relying on technology that it’s something of a buzzword at this point. But, there is a reason for this, it is providing unprecedented benefits to companies the world over. The supply chain industry is no exception. Through AI, companies will be able to optimize their chains from start to finish. Gaining access to analytics and forecasting that will be crucial to getting the most out of their operations. Thus, the faster and more accurate deliveries customers want can be achieved.

Automation

Automation achieves many of the same results AI does. By being able to automate many of the processes in a supply chain, it becomes more efficient. Operations in warehouses, involving data collection, and transportation, should all be automated. In turn, supply chains can become more transparent and reliable, on top of being faster and more cost-effective.

Mobile Applications

In the short-to-medium term, mobile applications might be the most useful technology this article covers.

A 2018 report highlighted by eMarketer stated,

Mobile devices and apps (27.9%) were cited as the technology that would deliver the most innovation benefits in five years.

Their are several reasons for this. Key among them is convenience. Everyone carries mobiles. As such, accessing these supply chain applications is simple, any time, any place. These applications enable supply chain managers the ability to get real-time updates and closely monitor their inventory and operations. Consequently, this brings a degree of granularity to the customer experience unlike what was achievable before. Supply chain managers can continually monitor the various activities that make up their chain and customize them to fit their clients’ needs.

Inventory and Warehouse Management Softwares

Softwares that allow for the management of inventory and warehouses are tremendous tools for optimal customer service. They provide visibility, control, and tracking of inventory. Moreover, they assist in meeting customer demands, by tracking inventory levels and making sure they are in the desired range. Finally, like all the other technologies covered here, they improve the accuracy, speed, and reliability of deliveries.