Emerging technologies continue to drive the logistics and supply chain, while managers in these areas continue to examine the possibilities such as blockchain and platooning.
What’s on the radar circa supply chain 2019? Scott Sureddin, CEO of DHL Supply Chain North America, points to four trends that he admits will add further complexity, yet represent what he believes will be “a very exciting year in the continuing evolution of the industry.”
He says managing the four “Ts”—technology, trade, talent, and transportation—will define how well supply chain organizations can meet customer expectations in the coming year. Below are the key 2019 supply chain trends identified by DHL:
- Technology: Warehouse robotics come of age. Robotics are already proving their value in select warehouse applications, but the technology is expected to reach a tipping point in 2019.
While order picking is a key focus of robotic development, the technology is expected to have an impact that extends beyond e-commerce fulfillment. The ability of the current generation of robots to work alongside humans while performing low-value tasks that increase overall warehouse productivity is applicable across a broad range of industries and warehouse tasks.
Sureddin says DHL has “taken a multi-vendor strategy to robotics that allows us to select the best technology for each application while using our scale to support multiple emerging solutions,” to broaden their range.
- Trade: Increased uncertainty drives greater agility.
In today’s global and interconnected supply chains, new tariffs, renegotiated trade agreements and regional climate events can have a ripple effect that paralyzes an entire supply chain. This is making proactive supply chain planning more important than ever. Designing supply chains with the ability to flex to circumvent natural disasters or quickly re-configure to accommodate shifts in costs or material availability resulting from tariffs has become critical to maintaining high service levels.
Technology such as sophisticated supply chain modeling allows what-if scenarios to be performed to quickly identify the best response to sudden changes in costs, transportation routes or material availability. Also, cloud-based risk management solutions are using the power of big data analytics to identify potential supply chain disruptions and proactively reposition orders and inventory to maintain service levels.
- Talent gets the attention it deserves. While the talent gap remains a significant challenge, solutions are starting to emerge. In DHL Supply Chain’s case, they have taken a proactive and multi-faceted approach to recruiting and retention in tight labor markets.
Beyond using robotics to increase productivity, the company has automated the recruiting process, from online applications to pre-hire testing to onboarding, to increase the quantity and quality of applicants for hourly positions. The company also works closely with a number of universities and colleges to promote the career opportunities available in supply chain management while helping prepare students to enter the industry.
- Transportation: Digitalization closes the transportation service gap and helps shippers think beyond today’s shipment. Digitalization is being applied broadly to a host of supply chain issues, but the area that will benefit most directly in 2019 is transportation. A number of digital systems are emerging to enable the industry to make better use of available transportation resources and close the service gap.
For example, cloud-based Transportation Management Systems (TMS) are extending the value of TMS to smaller enterprises, providing the insight and data to optimize resources. In addition, increased use of IoT in the form of fleet management systems allow data from truck operations to improve utilization and reduce downtime.
However, the biggest opportunity is in the emergence of digital freight platforms that create online marketplaces that quickly and efficiently connect shippers with carriers, streamlining processes, optimizing costs and expanding the available options. Here, DHL Supply Chain has invested in these types of innovations to help shippers think beyond today’s shipment and strategically plan for the future, while still solving current challenges.
Increased complexity will continue to challenge the industry in 2019, DHL reports. However, new digital systems are reaching a level of maturity that warrants widespread adoption. This could allow the industry to take significant steps forward in the areas of speed and productivity, while effectively managing the challenges created by talent and tariffs.