5 Supply Chain Trends in 2017 and Beyond

September 2017

Breakthroughs in technology are changing the way we see logistics.

Predicting the future of commercial freight is notoriously difficult, especially given the speed at which technology has been penetrating the logistics sector. Breakthroughs in digital, cloud and mobile technology have resulted in a period of dizzying growth for distribution companies. These advances are expected to continue over the coming years, reshaping the supply chain and making it faster, more efficient and much cheaper.

While we may not be ready for driverless trucks to take over the roads just yet, the following trends are poised to take a significant leap forward in 2017 and 2018.

1. The Rise of Blockchain

Blockchain is the technology that underpins the digital currency, Bitcoin. It’s essentially a digital ledger of transactions that are cryptographically recorded and verified as having happened. The exciting thing is that the ledger isn’t stored in one place. It’s capable of being distributed across hundreds of computers around the world, so everyone in the supply chain can have real-time access to an up-to-date version of the ledger.

Why is this relevant? In a word: transparency. By digitally recording every single transaction across the supply chain, Blockchain can establish the provenance of goods so that you can assure customers of their origin and quality. Sustainability sells in the consumer world, and authenticating the source is vital to the value of many products. If you cannot do this, your customers and stakeholders may well be asking why.

Once updated, the Blockchain ledger cannot be altered or tampered with, so it’s also very secure. This protects everyone involved against hacking, counterfeiting, theft and other forms of corruption.

2. Warehouse Robotics

While breakthroughs in workflow automation, managed by advanced warehouse management systems, have made a considerable difference to warehouse efficiency, few companies have achieved the holy grail of full automation. That situation could change over the next few years as technology vendors bring sophisticated warehouse robotics to the market.

Currently, robotic picking technologies are limited to systems that deliver goods to the picker. Successfully operating these systems requires considerable investment in purpose-built racking and conveyance equipment. Soon, however, it’s anticipated that robots will be able to pick orders from conventional shelves or floor locations. This will allow warehouse operators to switch from manual to fully automated distribution centers without the need to purpose-design a warehouse, creating the potential for enormous cost savings.

3. Augmented Reality

While you’re waiting for advanced robotics to hit the market, there’s another technology that soon could become common in warehouses. Augmented reality — a technology that layers computer-generated components atop the real world — can literally change the way that pickers see the warehouse in which they’re working.

Pick-by-vision solutions allow pickers to wear glasses that display a digital picking list in their field of vision. Thanks to indoor navigation solutions, they’ll also be able to see the best route to arrive at the required location, recognize cartons and read barcodes automatically, pushing picking accuracy to new heights.

4. Predictive Data

Business intelligence is on the rise, and every manager now has access to massive data sources on workload, operations, location tracking, buyer sentiment and consumer demand. But information on its own is not particularly helpful. If big data has entered the supply-chain spotlight only recently, that’s because the technology has just evolved to the point where it can deliver genuine insights — a process called analytics.

Next year, it’s expected that predictive analytics will dramatically improve the accuracy of forecasting at every point of the supply chain. Machine learning has advanced to the stage where it can analyze the wealth of intelligence that businesses have at their fingertips, and assess the state of the supply chain in real time. Machines then automatically (i.e., without being programmed) execute the action that can prevent accidents, change conditions, cut costs and ensure customer requirements are fulfilled.

5. The Move to 3PL and 4PL

Natural disasters and product shortages disrupt the global supply chain to the tune of a staggering $211 billion every year. To combat this, many are turning to 3rd-party logistics (3PL) and 4th-party logistics (4PL) providers to improve flexibility in the supply chain. What’s the difference between the two? In a nutshell, a 3PL will handle your shipments while a 4PL will handle your entire supply chain.

As we push toward 2020, we expect to see a blurring of the lines between logistics companies and technology providers as 3PLs and 4PLs continue to leverage software platforms to improve efficiencies across the supply chain. The consumer markets have already blazed a trail in this regard — a good analogy is Uber. When you book an Uber cab, are you purchasing a service from a taxi driver, or are you using a software platform (an app) to find a cab?

The same melding of service and software has exciting implications for warehouse management, procurement, purchasing and more. This is reinforced by the 2017 Annual Third-Party Logistics Study, which reports that 91 percent of 3PL users regard their relationships as yielding positive results.

Wrapping Things Up

The coming years will see many challenges for supply chains as technology continues to push the envelope. Any of the five trends outlined above has the potential to disrupt your company’s supply chain and logistics operations. Prepare to adapt, or be left behind.

These new technologies will ultimately impact the growth and efficiency of your business. Contact Goldin Peiser & Peiser for more information on additional ways you can impact the financial success of your company. 

Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.

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