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 Elementum Lists 3 Trends That Will Impact Supply Chain in 2018 

Posted by Janie Ryan | January 19, 2018

In 2017 drone deliveries went from rumor to reality. Online retail continued its steady eclipse of brick-and-mortar outlets, forcing big brands to reassess the importance of seamless last-mile delivery in nurturing customer relationships. And companies had the painful realization that, faced with an empty shelf or “out of stock” notification, most customers will drop a purchase entirely and head for the next best option.

We predict that 2018 will be a year of discovery — brands will discover that achieving supply chain visibility is not an end-game, but a step in the journey to achieving greater availability of their product for impatient customers. Below we list the top three developments we believe will drive product availability in 2018.  

 

Migration to the Cloud: The International Data Corporation predicts that by 2020 80% of all supply chain interactions will happen on digital platforms. Companies across industries are already recognizing that their supply chains must function not in isolation but in ecosystems. There will be a greater focus on leveraging cross-company and cross-functional data to access actionable information. For this to happen, digital technologies will continue taking a forefront. Digital supply chain management will have especially high value for manufacturers because of the overwhelming volume of real-time information they need to communicate upstream. The same thinking applies to those in transport, particularly given the unpredictable weather and other factors that transport operators work in.

Cloud software will also be used for better management of omnichannel revenue and returns. According to Forbes, most companies can’t even assess the financial impact of product returns. This is part of a larger problem of information disconnectedness that is being exacerbated by the shift to omnichannel retail. Digital solutions will likely save a lot of brands from losing sight of where their products — and profits — are in each of their retail channels.

 

Blockchain — Know it and Own it: This year has already been huge for the technology that allows for decentralized, democratic sharing of information. Blockchain’s distributed ledger format will be used to keep logistics operators up to speed on where their products are and what might pose a threat to timely deliveries. The technology will really gain traction in the food industry, where consumers have become increasingly wary of foods with dubious origins. A Chinese company has already utilized blockchain to give consumers day-to-day insights into the status of their poultry, and last Thanksgiving Cargill introduced a traceable turkey program that used blockchain to give households a digital farm-to-table experience.

 

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Shrinking Logistics Labor Force: The past few years have had no shortage of coverage on the disappearing driver phenomenon. The American Trucking Association cites a shortage of 35,000 drivers and reports that trucking fleets are currently having trouble meeting shipping demands, impacting the entire supply chain. From recruiting more women to promising higher wages for long-haul truckers, companies have laid bare their desperation to hold on to this vital labor force. 

Despite continued hype around self-driving trucks, those still face numerous technological and regulatory hurdles before they see the light of day. Elon Musk, champion of autonomous vehicles, put special emphasis on the idea of driver experience during the recent unveiling of Tesla’s electric semi truck — further cementing our belief that human drivers are here for the long haul. Instead of putting their hopes in self-driving technology, companies will have to ramp up recruiting efforts or use digital technology to maximize shipping routes, saving time and reducing the need for labor. 

 

Honorable Mentions

Artificial Intelligence: Supply chain is long overdue to join the information revolution. By pulling and distilling information at unprecedented speed, intelligent machines will provide critical data for use by logistics operators, who will be empowered to make better decisions about their products.

Robots Will Offset Labor Shortages: The shift to online and omnichannel retail has created a need for more distribution centers, and companies are having trouble staffing all of their new sites. Higher on the maturity curve than technologies like self-driving trucks and blockchain, Robots as a Service (RaaS) could be a viable investment for these struggling warehouses.