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What lies ahead for the logistics and supply chain industry?

2018 will be about continued chaos, disruption, change and transformation across supply chains and logistics providers among other developments warns Tom Craig, President, LTD Management, in this outline. Brace for turbulence in 2018. There will be snags, disturbances, interruptions and even confusion across the global supply chain and logistics platforms and industry as a whole. This year will also be marked by expansion and growth of e-commerce across international markets, industries and countries also in part because of the fluid geo-political situations. What does it means to supply chains and logistics?

Here are a few takeaways:

  • There will be a trend towards mergers and acquisitions (M&A) by retailers and manufacturers to support their supply chain capabilities, especially for e-commerce.
  • A new breed of service providers will emerge to meet the demands of the e-commerce supply chain.
  • M&A by logistics providers will fill the need for new capabilities and deal with new market realities.
  • Logistics providers, retailers, and manufacturers will increasingly be ‘Amazoned’
  • There will be even faster supply chain velocity demands—velocity square

New terminologies and nomenclatures are also emerging. Related developments include and I am going to enumerate these as follows:

  • Digitisation—the new normal
  • Blockchain
  • Cryptocurrency
  • Disintermediation (reduction in the use of intermediaries between producers and consumers)
  • Platform businesses
  • Artificial Intelligence and its underlying requirement for speed of responses
  • Internet of Things (IoT)
  • Data analytics
  • Augmented Reality and Virtual Reality
  • Driverless vehicles
  • Robotics—warehouse and delivery
  • Drones
  • 3D printing

Transforming supply chain for e-Commerce success—The What and How to Start

The essentials for the new Supply Chain that deliver e-commerce success in line with customer expectations are:

  • End to end (comprehensive)
  • Velocity (speed)
  • Order delivery
  • Inventory
  • Warehouse Network Alignment
  • Upstream Supply Chain
  • Technology
  • Integration of systems
  • Processes, especially internal
  • Metrics and quantifiables
  • Velocity—inventory
  • Perfect Order—includes order-delivery velocity

These above are among other parameters will be the defining forces for the new supply chain landscape

Some things to remember for transforming your supply chain–

Your current supply chain, with its design and operating issues, did not happen overnight.  So, transforming will not happen overnight. There is no quick, easy answer. Avoid signs along the way that say e-fulfillment answers, last mile solutions and other optimistic terms. Watch out with the ‘low cost’ or cheap ideas, from both internal and external sources.  They are part of the ‘easy answer’ cadre of providers and programmes that can take you down the wrong paths. Avoid ‘agile’ which is a code for trying to do more with your supply chain than it is designed to do.

How to start: Hint—remember it is about velocity

Assess, define, measure and identify gaps. For example, how well do you perform at delivering customer expectations?  This will establish where you are and how you are doing. Know your segment products and suppliers. Know what is important, why and where. Use lean value stream mapping, especially for international supply chain and compress time.

Remember, this is about your end-to-end supply chain and not just the logistics components in the supply chain. So always stay focused.

-www.ltdmgmt.com. Tom Craig can be contacted on tomc@ltdmgmt.com

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