The pace of change in supply chain management continues to accelerate, and it's only going to get faster. With the explosion of e-commerce, things are moving at internet speed in both the B2C and B2B markets. It's astonishing to think that Amazon only first appeared as an online book retailer in 1994. A short 25 years later, supply chain management has transformed from an often-overlooked cost center into a vital segment of operations that can be turned into a competitive advantage.
Just a few years ago, internet connections on a truck were prohibitively expensive. Nowadays, just about every semi rolling down the highway is a node on the internet of things. Shippers now have the ability to track loads in real time, rather than waiting for a driver to phone in from a truck stop.
Wonder what's around the corner for supply chain management? Here's a look at the top trends for 2019 and beyond.
Supply Chain Automation
Automation can be used to take over dirty, dull and dangerous tasks from humans. With warehouse automation systems and product tracking technology connecting to the Internet of Things, automation will become even more productive. Automated storage and retrieval systems will continue to become smarter and more flexible. For example, Kroger's adoption of the Ocado robotics systems uses robotic bins to move products to human pickers, a system also known as a cobot, or collaborative robot. InVia robots use robotics-as-a-service software that cooperates with existing warehouse systems. Supply chain automation will deliver more data about the supply chain, allowing a new level of visibility for warehousing and fulfillment operations. By automating the supply chain, companies can respond faster to market shifts and changing customer demands through predictive decision making.
As the name implies, elastic logistics refers to a flexible supply chain that can expand and contract to align with current demands. Elastic logistics is based on the idea that there will be natural ebbs and flows of demand and capacity. Strategies like increased use of warehouse automation and artificial intelligence will help companies build agile supply chains. Partnering with third-party logistics providers (3PL) can help make operations responsive to capacity demands at the time. Elastic logistics provides agility and scalability while enhancing the customer experience.
Working with an experienced 3PL provider allows a company to tap into the latest technology and best practices without direct investment. These providers help companies ramp up their operations to meet customer demands for fast, transparent, low-cost shipping while keeping costs in check. The 3PL can design a system that works for your company's unique needs rather than settling for a one-size-fits-all solution.
A blockchain, also known as a distributed ledger, is a shared database that creating a permanent transaction record that can be changed only with the permission of the other members of the network.
Blockchain technology became famous through cryptocurrencies like Bitcoin. For cryptocurrencies, a blockchain is "trustless," so the members of the network don't have to know each other. The system is designed to make it impossible to cheat. Adapting blockchain to track physical objects in the supply chain will require knowing who is adding information to the chain.
While still in their infancy right now, blockchains are expected to play a more significant role in tracking and tracing items in the supply chain. Some of the first applications of blockchain technology in the supply chain are targeted toward food and pharmaceutical safety, tracking items to their source in case of a recall.
Because the data in the blockchain is visible to all its members, it can help remove friction from transactions of all types. It could be used to record any kind of exchange of value, smart contracts, payments and tracking. Blockchain could be used to certify origin products such as organic or non-GMO foods or conflict-free minerals.
Initially, third-party service providers and very large enterprises will launch blockchain services for their own supply chains. Eventually, blockchain will increase the efficiency and transparency of the supply chains from warehousing to delivery to payments.
Everything As A Service (XaaS) Model
Today, you don't have to buy or license software or warehouse automation systems and material handling equipment. You simply subscribe to it as service, paying for only what you need. For example, the acquisition cost of warehouse robots could be prohibitive for your business. But with Robotics as a Service (RaaS), you can scale up your services for peak times, and drop back when volumes return to normal. Similar services are available for warehouse forklifts and other equipment.
Software as a Service (SaaS) has been a staple for years now, thanks to fast, ubiquitous internet access and cheap computing power. All types of supply chain tools, including warehouse and inventory management systems, transportation management systems and shipping systems can be accessed as a service.
To some extent, the supply chain as a service is already available by working with 3PLs, and it's likely to become a more popular model in 2019 and beyond. Companies realize the value of using experts to run their operations, allowing them to focus on their core competencies.
Forward Deployed Inventory
Prompted by the desire to speed up delivery for e-commerce business, forward deployed inventory means moving the product closer to the customer. Companies are shifting fulfillment from large regional warehouses to smaller, decentralized facilities located closer to their customer bases. Forward deployed inventory from smaller facilities allows companies to be more responsive to customer orders while reducing delivery times. The inventory could be stored in mini-warehouses or dedicated fulfillment centers, while some brick-and-mortar stores are converting retail locations into fulfillment centers.
A forward-deployed inventory strategy enables shippers to offer same day or overnight fulfillment in major cities, allowing them to stay competitive in today's landscape. Moving inventory closer to the customer means it is possible to use regional carriers, metro area couriers and other delivery options that aren't cost-effective on multi-day moves. Retailers can restock shelves in a matter of hours instead of days, and B2B service organizations can have high priority parts available without waiting for shipping times.
Any business can make use of forward deployed inventory, from retail to healthcare to field service operations. Typically, a 3PL is used to provide scalable, flexible space for the inventory and to manage fulfillment operations.
What's next for the future of supply chain management?
We've looked at only a few of the top trends for the next few years. Chances are, the big picture will look similar to today's supply chain, but the details of how things get done will change dramatically. There won't be any excuse for not having real-time inventory and fulfillment information. Drones may be taking inventory in warehouses, and trucks may be self-driving to their destination. But it still comes down to getting the right product to the right place at the right time.
Before the Apollo 11 astronauts walked on the moon in 1969, many science fiction writers accurately predicted what would happen. But what everyone missed was the fact that the entire world would be watching on TV. What future trend do you think we're overlooking in 2019?
At Warehouse Anywhere, we'll help you to plan your strategy and manage the latest supply chain trends. Get in touch with us today.