Copy of Copy of Copy of Copy of How Supply Chain Orchestration Improves the Customer ExperienceClearly blockchain technology has major benefits for supply chains, but even with that being the case, there are some significant obstacles it still has to overcome.

Blockchain is growing rapidly. According to TechJury, the blockchain market is set to have made 20 billion dollars by 2024. More pertinently, 53% of respondents to a 2018 Statista study said they’re using blockchain for their company’s supply chain. As such, the futures of supply chains and blockchains are very much intertwined. Yet, like with any new technology that has to grow at an immense pace in order to keep up with market demands, blockchain remains on unsteady ground.

This week’s article by Morai Logistics explores the most prominent hurdles blockchains have yet to overcome in the world of supply chains.

Novelty

The very fact that blockchains are such a new technology is their baseline barrier to any market. This includes the supply chain industry. Simply understanding the technology, how to talk about it, and how to use it to its fullest potential all have to be a part of an education process.

CoinDesk highlighted this in an article addressing blockchain limitations,

Blockchain technology involves an entirely new vocabulary. It has made cryptography more mainstream, but the highly specialized industry is chock-full of jargon.

Without acclimating each segment along supply chains to blockchain technology, it is unlikely be adopted by them. This is harder than it might seem. These segments are often disparate and will have different degrees of understanding and resistance—from those in warehouses to those driving trucks.

Security

Despite being known for the transparency they provide, blockchains aren’t foolproof when it comes down to data security.  This is particularly true when a blockchain isn’t large. Part of the strength of the technology is the size of its network. If, for example, there only a few actors along a chain, it’s more likely that that blockchain will be susceptible to poor/bad data. Large scale adoption is crucial to overcome this.

Additionally, not all blockchain platforms are made equal. Technological advancements in machine learning and automation are not always used in supply chains. This means the data that is entered in the blockchain is more likely to suffer from human error. Blockchain needs to be part of a larger evolutionary process by supply chains, not adopted in a vacuum.

Efficiency

Building off the previous point, blockchains are not only less secure but, in turn, less efficient without a holistic approach to their implementation. This means there needs to be integration of blockchain data into the supply chain platform being used. Moreover, without some kind of automated operation to make sure the data is clean, secure, and reliable, it can be a slow form of record keeping—human data entry being more time-consuming.

Maturity

In many ways, the topic of maturity is just all the issues raised in this article combined. All of them come together to make potentially the biggest obstacle that blockchains need to clear. Blockchain is a technology for the future. In the present, it is very new, hurt by that newness, and stymied by efficiency and security concerns.

Kasey Panetta of Gartner writes,

Confusing future blockchain technology with the present-day generation. Current blockchain platform technology is limited in scope, and falls short of meeting the requirements of a global-scale distribution platform that can enable the programmable economy.

Thus, one of the things blockchains require the most is simply time. However, that isn’t something they are receiving. As such, it is up to the countless blockchain projects in the world of supply chains to not rely on what they will be able to do down the line but rather respond to present-day pressures.

How Supply Chain Orchestration Improves the Customer Experience

3PLs have become a dominant force in handling the logistics and supply chain networks of large companies around the world, but where are 3PLs headed next?

According to Allied Market Research the 3PL market was valued at $869 billion in 2017. Furthermore, it will come close to doubling that by 2025. In roughly a 40-year span it has gone from being a insignificant industry in the 1970’s to becoming a ubiquitous presence vis-a-vie the supply chain process. With that being the case, it’s become apparent that 3PL is very much an adaptable industry. One that caters to the demands of modern day market pressures. As well as one that is set to navigate future demands.

However, for that to be the case, 3PLs have to identify what those future demands placed upon it will be. More importantly, be willing to act upon those demands, even if those actions come with a degree of risk. As logistics and technology researcher, Haley O’Donnell wrote:

3PLs tend to be risk-averse, which deters technology investment. Gaps in data leave 3PLs in a reactionary mode.

In this article, Morai Logistics covers where 3PLs have been and can continue to be successful, as well as areas of potential future success.

Areas of Continued Success

The rise of globalization has been taking place for decades. And 3PLs have done a remarkable job at rising right alongside it. As the world has become more interconnected, the number of multinational businesses have grown. Their influence has spread. Consequently, the demand for the movement of their goods as a result of those connections has grown exponentially. 3PLs have helped businesses meet that demand. And that demand isn’t slowing down any time soon. Despite some pushback in certain parts of the world, for the most part globalization is still increasing as an economic force.

In turn, the boom in the e-commerce industry in these past couple of decades has meant its heavy reliance on dependable supply chain processes. This has resulted in 3PLs playing a supplementary role that has seen it soar alongside e-commerce. Again, just like with globalization, e-commerce is set for continued growth in the years to come. With it being projected to grow in revenue by over a $100 million in the next four years in the U.S. alone.

Areas of Future Success

Going forward the expectations for improved transparency, responsivity, efficiency, communication, and predictive accuracy are only going to grow with the development of technology that can meet those expectations. Innovations in all kinds of technologies are coming thick and fast:

  • Blockchain technology
  • Automation
  • Machine learning
  • Transport management software
  • Mobile applications
  • Big data

Each area of innovation is varied and addresses multiple market demands. We’ll touch on several here. Firstly, blockchain technology provides transparency, security, and ensures quality as it allows for real-time feedback along the supply chain network. TradeLens, having just launched in the last year, is set to be the biggest blockchain-enabled trading platform going forward.

Equally, automation can bring down costs and increase productivity as logistical hurdles like manual data entry are replaced. Moreover, machine learning makes precise predictions about supply chain routes possible, so that risks can be anticipated, avoided, and solved for.

On top of that, transport management systems will drive down the cost and time along supply chains. With technologies such as voice commands greatly helping with communication along each stage of the transportation process. At the same time, mobile applications from which orders can be made, processed, and tracked, providing flexibility and ease for clients and 3PLS alike, unlike ever before, are being rolled out. Finally, big data will see 3PLs have the ability to prognosticate potentialities that enhance performance as a result. Addressing a plethora of the expectations mentioned earlier.

Thus, the future of 3PLs involve much of what’s seen them flourish already, as well as plenty that is novel. If the 3PL industry wants to remain a big player in the supply chain market, it has to continue to adapt. Not languish in the face of potential risk.

Hey everyone! Thanks for checking out our blog page, we’re really eager to bring you the latest news in the logistics world as well as some insight into how to make smart decisions when looking at how your business should tackle its transportation needs.

We love logistics, and we feel that many people outside of the logistics community have absolutely no idea what we actually do! Whenever I’m at a cocktail party, introductions always have the follow-up question of what one does and for me the conversation always goes something like this:

Stranger: “Hi, I’m Matt. It’s a pleasure to meet you.”
Me: “I’m Kelli, likewise.”
Matt: “So, Kelli, what do you do?”
Me: “Well, I’m actually in logistics!”
Matt: “… are you a trucker?”

Our goal is to bring you some insight into how your packages get from point A to point B, and what people in logistics actually do to make this happen smoothly! The best logistics companies are like the perfect waiter, where your glass is constantly topped off and you go from your appetizer to entree to desert without even noticing they’re there. It’s time to bring us logistics people out of hiding to give you a better idea of what we do and how your company can make better decisions when it comes to logistics.

Be on the look out for our future posts, but in the meantime feel free to check out what we do as a 3rd party logistics provider by visiting our Core Services section. Or feel free to contact us if you have any questions! Looking forward to hearing from you!