Thursday, January 2, 2020

2020 PREDICTIONS / FUTURE OF SUPPLY CHAIN MANAGEMENT AND LOGISTICS


Perhaps this should be called the future directions/trajectories of supply chain management and logistics. The prognostications reflect three foci—supply chain management / logistics as stand-alone topics; within a larger context, such as manufacturing or retail; or in terms of mega trends.


For 2020 and perhaps for much of the decade, change/transformation will be the issue—supply chain management, logistics, manufacturing, and retail.  Much of 2020 will be items that have begun and how they will play out.  Call it unresolved challenges.  They are unresolved because they are evolving and because many logistics providers, manufacturers, and retailers are slow to transform—using programs instead of strategy.

The strategic importance of supply chain management will escalate.  Recognizing and acting on it will be a sign of the manufacturing and retail leaders.


·       Underlying much of what will continue to reflect power shifts—customer have it for e-commerce, population and how to serve large populated areas and lesser  populace regions when speed of order delivery is important, and shift of key ports.


·       The urgency of change will increase. The challenge for some firms will be going for quick fixes instead of transformation and that can compound their situations.


·       Recognizing that supply chains are not linear, that there are supply chains within supply chains, will increase as a key action in increasing end-to-end velocity and performance.


·       IMO 2020 will play out to see the impact of ocean carriers that use and pay for low sulphur fuel versus the structural integrity, life, and maintenance of scrubbers, the alternative to paying for low sulphur fuel.  


·       Customer power and expectations will continue to remake retail and manufacturing. Speed is the new competition.


·       The disruption and chaos that is happening in retail and manufacturing is being driven by the supply chain revolution, not evolution, with its end-to-end velocity. This, in turn, is driving logistics transformation.  All of this will continue.


·       Technology will increase as a disruptor, change driver, and requirement in logistics and supply chains. The question will be whether shippers continue to expect logistics providers to lead the way or if they will step up to direct what is needed for greater velocity, visibility, and integration across the total supply chain.


·       Retail is approaching the tipping point on its e-commerce omnichannel ability to meet customer expectations with perfect order delivery velocity. Transforming to the strategic, weaponized supply chain takes time---time that is slipping away.


·       Retailing and manufacturing is in the early stages of a new reality for how to reach and serve customers, both B2C and B2B.  That new reality requires the new supply chain with end-to-end velocity.


·       Pressure will mount of all transportation for reducing greenhouse gases.


·       3D printing will begin to move from factories to supply chains to improve perfect order performance, especially as to delivery requirement.


·       The disruption and chaos that has been happening in retail and manufacturing is being driven by supply chain revolution, not evolution—which, in turn, is driving logistics revolution.  All this will continue.


·       3PLs will begin to transform to 3PSCM or SCMaaS as the emphasis shifts to the end-to-end supply chain.  Logistics will be defined within the supply chain, not as separate segments. 


·       The push for greater supply chain velocity will mean the use of lean supply chain management, especially for the outside the 4 walls supply chain.


·       Technology will continue its importance in the new supply chain. But there will be separation as to the real value of various technologies.


·       The position, role, and demands on supply chain management and logistics will increase as IoT advances.


·       Logistics disruption increases. Its role and structure in the new supply chain. Continuing impact and threat of end-to-end supply chain velocity and its order delivery velocity. Customer reverse outsourcing.  Technology impact on industry niches. Disintermediation.  Future of some providers.


·       Digitization will be a key technology for supply chains and logistics for visibility,  velocity, and integration. Two important documents here are the bill of lading and purchase order.


·       E-commerce order delivery leaders may be reaching the limits on order delivery,  downstream velocity, even with robotics and aligning more distribution centers with customers. This will mean shifting emphasis upstream—toward the supply of supply chain management. That is also important for achieving end-to-end speed.


·       ERP systems will be challenged to meet the end-to-end velocity requirements of supply chains in the new reality.


·       As the inventory effect of trade wars forward buying draws down, the performance ability of in-store e-commerce fulfillment will be tested. 

·       The challenge will increase for SME manufacturers and retailers to up their supply chain capability without having the resources for technology.

·       As the digital factory gains traction, the need for the digital supply chain will be recognize. Otherwise the benefit is weakened.  This means moving outside the four walls. 


·       Supply chain velocity and the new supply chain will especially put more pressure on container line performance and on the role and design of 3PLs.



For more on the new supply chain management and logistics—the new reality—go to www.ltdmgmt.com



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