With logistics, one thing is certain, the past is not a roadmap for the future. There are many developments that impact day-to-day logistics, and flexibility is the key to “the new normal” in much of supply chain development. Following are three areas, stimulating the trends shaping logistics in 2017.
International trade is changing direction and a company’s global strategies must change with them. Political conditions in many regions have been disrupted by recent events, such as Brexit, and the changing trade scenario projected by the Trump administration. Up to now, logistics’ growth was driven by the flow of goods from Asia to Europe, and Asia to North America. With the increase in labor costs in China, rising fuel costs, and changing regulations, businesses are opting to make logistical changes as to where they source, produce and use transportation networks. Businesses engaged in international trade need to have flexibility in their logistics network as various complications arise in markets that are more fragmented, and unpredictable. Two globalization trends include increased:
- Nearshoring involving bringing increasing amounts of manufacturing closer to the end user
- Outsourcing of logistics suppliers to secure the multiple transport methods and routes necessary to reduce risk and ensure speed of delivery
Retail businesses can expect more customers to cross-over, or transfer their buying to online services in 2017. To successfully meet the needs of the online customer, maintain brick-and-mortar outlets, and also manage business-to-business supply chains, companies must be able to develop an omnichannel environment, integrating customer profiles, shopping history, preferences, inventory, and product information. E-commerce trends that businesses are embracing for success include:
- Building broad networks of fulfillment and distribution centers close to highly populated regions
- Providing a variety of delivery options that include pick-up, or front door, same day, next day, or standard delivery
- Expanding checkout options that include wallet-style payment services, such as PayPal, Apple Pay, and Google Pay services on mobile devices
Advances in technology have revolutionized the logistics industry and will continue to do so in the future. Businesses who integrate or adopt new technologies into their operations have a significant competitive advantage by being able to provide higher quality customer service and more efficient transportation. Technology gives supply chain directors the ability to manage every aspect, every process of each link in the chain efficiently, whatever their location. Technological trends to look for in 2017, include:
- Uberization of Trucking
On-demand trucking services allow shippers to view available trucks that are close to the location, and book the truck immediately without the use of a broker. For shippers, Uber-like services are automatic, convenient, and offer price transparency to their customers. Drivers are responsible for maintenance and calibration of their scale/weighing system to assure there is sufficient space. The uber-services are linked on online maps that monitor the GPS position so that the shipper is consistently informed of the precise arrival time of the product.
- Warehouse Robotization
Robot stock pickers are beginning to change warehouse operations in a monumental way. Amazon, a pioneer in warehouse automation, utilizes thousands of robots in its huge fulfillment warehouses to collect product for individual orders. Amazon can process hundreds of orders per second using a high-tech fulfillment system and automation.
Logistics is multifaceted, but there is no link in the supply chain that is more important than the fulfillment goals. Globalization, e-commerce, and technology are shaping the direction of logistic trends that help businesses deliver the right product, in the right quantity, at the right location, at the right time, in the right condition, at the right price.