Chuck LEAN Business Consultant
1. Paperless Warehouses Will Leverage Automation
Adding value to the supply chain will become the cornerstone of successful management throughout 2020. Forward-thinking 3PLs need to leverage the voluminous information flowing through their supply chains to make informed decisions, better predict future demand, isolates trends and potential problems, and manage workflows to meet such demands.
Unfortunately, some supply chains continue operating with an antiquated processing model, using paper. Who needs paper in today’s age?
3PLs that wish to stay relevant must evolve their operations beyond the nuances of paper-based tracking and deploy newer systems. According to [removed] , more than 2760 parcels are shipped every second in the global supply chain, and the global parcel shipping volume could surpass 200 billion by 2025. The digitalization of processes is the only option.
2. E-Commerce Customer Expectations Will Grow
Customers play a significant role in what supply chains will do to ensure timely, accurate shipping and delivery. The average volume of e-commerce packages has increased more than 20% since 2018, and with all organizations looking to achieve 100% transparency, customers expect to know everything. It is not enough to offer the lowest-cost shipping in today’s world; shippers must offer shipping that defies logic and reason, moving products from warehouse to customer within mere hours. In addition, the likelihood of customer expectations increasing further only continues to grow, and customers play a vital role in building brand reputation.
As also explained by the [removed] :
“A negative shipping experience can have an irreparable impact on a customer relationship. 84% of consumers say that they won’t return to a brand after just one poor delivery experience. Furthermore, 89% of younger consumers are likely to promote a brand as a result of positive customer experience.”
3. Business Intelligence and Analytics Will Dominate 3PL Selection Choices
The overwhelming majority of shippers and 3PLs, 95% and 99% respectively, agree [removed] . With that in mind, only 26% of shippers and 27% of 3PLs believe current analytics capabilities meet this requirement. The rationale for these issues may vary, including a lack of access to data, inability to understand data, and poor categorization of data.
For example, descriptive data does not carry the same weight and insights as prescriptive data. As a result, supply chain technology trends 2020 has to offer will include a greater focus on reviewing and implementing [removed] .
4. Integration Between Systems Will Finally Get Traction Throughout the Market
Integration stands apart is another key trend affecting supply chain technology throughout the coming year. As organizations look for better ways to deliver more value to customers and business-to-business partners, the [removed] to streamlining picking, packing, and shipping operations. After all, systems that do not communicate and rely on disparate processes will lead to inefficiencies and added costs.
To stay successful, shippers and 3PLs will need to ensure integration with a diverse set of systems, including supplier and business-to-business partner [removed] , such as API and EDI systems, third-party picking, packing, and shipping software, customer e-commerce websites, such as marketplaces, [removed] , and of course brick-and-mortar inventory management systems. While some shippers may have one or more of these integration capabilities today, only the full set of integration can ensure success.
5. Dynamic Workflows Embedded in System Resources Will Enable More Continuous Improvement
There was a time when standardized rule sets governed supply chain management. Unfortunately, the continuing evolution of the supply chain and growing demand for more e-commerce maturity and capabilities require shippers and other supply chain partners work together to automate and process more orders faster.
In other words, systems must evolve, leveraging [removed] , to enable continuous improvement. Such functions are only possible through dynamic workflows that adapt to the changing requirements of the supply chain.
6. Supply Chain Leaders Will Use Billing Automation to Enhance Accounting
Another dominant trend to expect in 2020 goes back to automated billing and accounting practices. In the past, the use of auditing programs and accounting software stood apart as a key area of added value for Cerasis’ clients, and the market hadn’t taken hold of the opportunities for automation in accounting.
However, the most recent State of Logistics report indicates billing, invoicing, and [removed] will rise to power and become a differentiator in the market. In other words, these once competitive functions are becoming a standard that everyone must embrace.
Align Your Business With the Supply Chain Technology Trends 2020 to Stay Competitive
E-commerce and the [removed] continue to stand apart in the global supply chain. As the value of e-commerce moves to take a larger market share in retail, shippers need to know how to leverage technology to reap greater rewards and value.
The right applications of technology, inclusive of analytics, advanced [removed] , and automation, will make the biggest difference and help shippers stay competitive and survive.
Where are you and your company on new Supply Chain trends in 2020?
Are you zeroing in on E-commerce?
COVID-19 continues to disrupt world economies, even in countries that have the pandemic under control. Additionally, despite pressure to get the economy back up and running, ongoing uncertainties, lack of consumer confidence and supply chain challenges continue to exert a stranglehold.
The extent is revealed in the latest [removed]  that anticipate U.S. GDP for 2020 will be 8% lower than 2019 and recovery in 2021 will be muted.
In December 2019, when the first rumors about this dangerous virus surfaced, no one anticipated the extent to which it would spread, nor the resulting human and economic devastation. Supply chains, especially those relying on international trade, were hardest hit. Systemic supply chain weaknesses were laid bare, and while all suffered, companies that had not kept up with critical [removed]  were hardest hit. Looking ahead, as companies scramble to reestablish supply lines and restart manufacturing, they need to take into account six crucial supply chain challenges.
Top Challenges Facing Supply Chain in 2020
Unwelcome as it is, until such time as there's an effective vaccine or the virus mutates into a less harmful strain, we need to accept the new normal is here to stay. This means there's a need to practice safe behavior such as social distancing, appropriate wearing of masks and a firm response to the almost inevitable surges in infection that [removed]  and result in localized lockdowns and business interruptions.
1. Limited Granularity of Data
When China shut down, many who thought they understood their supply chains discovered that knowing Tier 1 suppliers wasn't enough. Few appreciated the extent supply would be affected by the shutdown of Tier 2 and Tier 3 suppliers located in the Wuhan region and later, as the virus spread, in other parts of the world. Much of this was due to faulty assumptions regarding Tier 1 suppliers and possibly a degree of wishful thinking. As [removed]  said in his daily COVID-19 briefings, "Let’s start with facts. While we all have opinions, let’s start by reviewing the facts."
It's absolutely crucial organizations map out their supply chains, in detail, to identify vulnerabilities and weaknesses. This information will allow fast and decisive action when lower-level supplies are threatened.
It might be time to stop focusing so much on [removed]  and invest more resources in understanding supply chain complexity. Granted, this isn't an easy task, particularly in large organizations, but the events of 2020 have shown what happens if companies don't appreciate supply chain weaknesses. Naturally, it's not just the impact of COVID-19 that's important, but companies also need to guard against the potential impact of other events that could exacerbate supply chain challenges, such as:
2. Single-source Amplifies Supply Chain Risk
For numerous reasons, many companies have focused on single-sourcing strategies, possibly because this was perceived to be the lowest cost scenario. Unfortunately, this also means companies are vulnerable if suppliers face shortages or production interruptions.Â
In a complex world facing the sorts of supply chain challenges referred to above, single sourcing is risky and a guaranteed way to lose sales when disruption occurs. Instead, companies should focus on [removed]  to anticipate and minimize supply chain challenges and risks.
Â
3. Slowed Digital Transformation
Access to data is crucial for effective decision-making. Unfortunately, many organizations have a mishmash of manual and digital systems that effectively trap information within functional silos, meaning that decision-making is hampered by an incomplete picture.
As [removed]  says, "COVID-19 has emphasized the need to look at financials to understand base cost versus variable cost. Digital (transformation) could enable leaders to make much more intelligent decisions. This is becoming more vital than ever."
It's crucial companies devise ways to access supply chain data through the introduction of technologies that allow data to flow freely through the system. Additionally, organizations need technologies such as a [removed]  that allow them to monitor, manage and observe the impacts of decisions.
4. Maintaining Traditional Inventory Strategies
Traditional inventory control strategies focus on past performance to determine current inventory strategies. Precise algorithms are used to determine exact requirements. The problem with this approach is that it doesn't take into consideration unexpected events, nor is it agile and is often completely divorced from current realities.
Â
5. Lack of Actionable Data and Insights
A common theme facing business leadership, and supply chain management in particular, is they often don't have sufficient information at hand to make informed decisions. Added to that, supply chain complexity makes it difficult to evaluate multiple alternatives, trade-offs and scenarios to arrive at the best or right decision.
While traditional transactional-based ERP excels in handling huge volumes of data, the way information is captured, handled and stored means it's hard to use it for identifying forward-looking trends. The same applies to most business analytics that are great for reporting what happened in the past, but provide limited insight into future supply chain challenges.
What's needed when dealing with supply chain challenges is an ability to interrogate data to determine an optimal solution. This can be likened to what Shigeo Shingo meant when he said, "A relentless barrage of why's is the best way to prepare your mind to pierce the clouded veil of thinking caused by the status quo. Use it often."
The answer to this dilemma lies in the use of optimization techniques that form the basis for modern [removed] . Based on advanced modeling techniques, prescriptive analytics allows you to create a model of your supply chain that accurately reflects how it works, taking into account all inputs, outputs, and constraints, together with an ability to measure trade-offs. Additionally, this form [removed]  allows you to use the large volumes of structured and unstructured data available to the organization to evaluate different scenarios and determine the best way to overcome supply chain challenges and achieve supply chain goals.