DHL Supply Chain, Westerville, Ohio, shared the three supply chain trends set to have the greatest impact on operations in North America in the coming year.
“We know the supply chain is continuing to become more complex,” says Scott Sureddin, chief executive officer. “As we enter a new decade, we are seeing a maturation and expansion of many technologies and applications we could not have imagined even three years ago. In many ways, these technologies, combined with a new generation of talent in the workforce and less separation between brands and consumers, are contributing to the evolution of the supply chain. We will be able to be more productive and more efficient, while providing an even higher level of value to our customers. 2020 marks a new decade in supply chain management in which operations benefit from increased digitalization, customers benefit from higher levels of service and supply chain organizations benefit from greater diversity in the workforce.”
Here are three trends expected to have the most impact on the supply chain in 2020:
Emerging technologies go mainstream. The past decade has brought technological advances at a breakneck speed, from autonomous vehicles to Big Data to robotics. As 2020 approaches, those technologies are maturing and becoming more widely adopted. What were once niche technologies are now available to companies of all sizes across industries.
Customers are eager to pilot new technology in their facilities, and are now faced with the task of determining which technologies will not only deliver the greatest return on investment, but also integrate most effectively into their existing operations. With 5G on the horizon and the pending rush of even more data, now is the time for companies to ensure they have a strong data management foundation, so they are well positioned to collect and mine the data to derive actionable insights. Those companies already at the forefront are applying insights to solve a variety of challenges, including leveling out the traditionally disruptive spikes of peak season.
“As we go into 2020, we’ll see artificial intelligence getting more accessible, robots becoming more sophisticated and predictive modeling becoming even more accurate,” says Sureddin. “This maturation will allow us to apply technologies in even more ways to drive efficiency and create value for our customers. The last decade introduced us to these technologies, and the next decade will make them commonplace.”
Product positioning becomes paramount. There are more ways than ever for products to get into consumers’ hands. From traditional brick-and-mortar to buy online, pick-up in store, the lines have blurred between e-commerce and traditional retail. Combined with the high delivery expectations of consumers, companies need to have the right item in stock to fulfill a 2-day or even same-day order. To tackle this challenge, inventory positioning becomes critical.
The distance between consumers and the products they want will continue to shrink in 2020. The new decade will bring growth of micro-fulfillment centers, especially in the grocery industry. Micro-fulfillment centers will continue to make sense for companies who need to quickly and efficiently fulfill online orders. These micro-fulfillment centers, often in urban areas, are changing the image of a traditional distribution center. It will soon become just as likely for a distribution center to be in a high-rise in Manhattan as it will in a sprawling facility in a rural area, allowing consumers to receive their purchases with greater speed and efficiency. These micro-fulfillment centers sometimes take the shape of so-called “dark stores,” which are automated, mini-warehouses or distribution centers to help fulfill online orders. Dark stores often look like actual stores, but without the customers. Although dark stores themselves aren’t new, the next year will bring more widespread adoption of them.
- Gender diversity makes its mark in the supply chain. While labor challenges have captured all the headlines, a more subtle transformation is occurring in the workforce. Women are entering the logistics industry in greater numbers than ever before. In fact, women now make up 32% of DHL Supply Chain’s new associates. A variety of factors are influencing this shift, including a greater emphasis on STEM in both early education and campus recruiting efforts. The integration of more technology has also minimized the importance of physical strength in traditional warehouse roles.