Supply Chain Solutions Trend Outlook: Four Areas to Watch
While the global pandemic created significant hardships for the freight forwarding and logistics services industry – 94 percent of companies reported a COVID-19 induced supply chain disruption in 2020 – it also prompted a reevaluation of long-held policies and practices.
From legacy technology to cumbersome, bureaucratic processes to disconnected inventory management, warehousing, and shipping systems, the entire logistics industry has been forced to reckon with traditional operations that no longer work as intended – and in many cases made matters worse.
The result is an operational silver lining as companies look for ways to disrupt current functions and apply digital transformations that could help future-proof industry outcomes.
Here are four trends in supply chain solutions to keep your eyes on.
Data-Driven Decision Making
The more information freight and logistics companies have about where products are located in the supply chain, where they’re headed and when they’ll arrive, the better their decision making. There’s no question that supply chain visibility is a must when it comes to improving inventory control and the customer experience.
Consider two other key areas for supply chain optimization: Route planning and carrier selection. Historically, route planning has relied on human experience – drivers with detailed knowledge of the areas they serve are often capable of making decisions on the fly about which route gets goods where they’re going faster. The challenge? No matter how long drivers and transportation dispatchers have been working together, the unexpected still happens; natural disasters or public emergencies can detour traffic without warning and send delivery timelines off-course.
As noted by Supply Chain Digital, however, the increasing integration of real-time traffic information into freight and logistics networks can help drivers anticipate potential problems and make data-driven course corrections that lead to cost savings, faster deliveries, and better customer service.
When it comes to carrier selection, meanwhile, advanced freight rate management software makes it easy for companies to quickly manage margins, surcharges, spot rates along with filing tariffs and responding to RFQs – all from a single control tower. The result? Freight carriers can quickly correlate relevant rate data to produce an accurate and competitive quote, and customers have everything they need to make informed shipping decisions.
Advancements in AI
Artificial intelligence (AI) offers significant benefits for organizations across the supply chain to improve outcomes and boost ROI by automating key operations. As noted by research firm McKinsey, these benefits are quantifiable: 63 percent of firms reported revenue increases after adopting AI tools.
The caveat? Logistics and freight companies have been slower to embrace AI adoption as compared to many other industries, with many unsure of its direct benefit to supply chain operations. Here, potential benefits include:
- Reduced maintenance costs
AI-driven tools are capable of collecting and analyzing massive amounts of data, in turn helping companies identify specific tools or services that will require maintenance soon – but haven’t yet started to fail. The result? Substantially reduced downtime and cost savings as machines are maintained ahead of their typical failure curve.
- Improved inventory management
AI supply chain solutions integrated with machine learning (ML) tools can also be used to identify and apply inventory patterns that help fine-tune supply, demand, and shipping timelines. This type of advanced inventory management can also help companies avoid large-scale supply chain disruption by correcting for small issues – before they become big problems.
As AI tools become both more commonplace and more affordable, expect supply chain adoption to increase significantly.
Increasing IIoT Integrations
While the Internet of Things (IoT) has taken the consumer world by storm with wearable devices such as smartwatches and fitness trackers, Industrial Internet of Things (IIoT) solutions are only now getting up to speed. It makes sense; the scope and scale of industrial device applications are substantial – if devices experience connectivity, latency or reliability issues, entire freight or logistics companies could find operations disrupted.
Thankfully, increasing cloud maturity combined with improved device production have helped jumpstart IIoT adoption – as noted by Business Insider, 70 percent of retail and manufacturing companies have started a device-driven digital transformation project in their supply chains.
In practice, these IIoT deployments can take many forms. For example, companies might use tiny, wireless sensors to monitor machine operations and report potential problems. Or they might choose more robust solutions such as devices capable of accurately measuring and recording product dimensions when they arrive or depart, in turn reducing the time required for each item by several minutes. Over the course of a day, week or year, even a few minutes per pallet or parcel can generate significant ROI.
Also on the horizon? Hyperautomation. According to research firm Gartner, hyperautomation focuses on creating a framework “to mix and match a vast array of technologies in the best possible way, such as historic legacy platforms with recently deployed tools and planned investments.”
In practice, hyperautomation relies on robust digital platforms capable of connecting disparate services and data, and streamlining their interaction. This is especially critical for established freight forwarding and logistics companies which have often invested substantial time and energy into the development of legacy tools and technologies are loath to abandon existing systems for untested alternatives.
Hyperautomation offers a way to bridge the gap and give companies the best of both worlds – access to critical data from legacy applications combined with the process automation and information analysis offered by AI-driven software and IIoT integrations.
The Future is Forward for Supply Chain Solutions
Bottom line? The world of supply chain management is changing in response to emerging global forces and evolving customer service expectations. As a result, new trends – including data-driven decision-making, AI advancements, IIoT integrations, and hyperautomation – are on the horizon to help freight and logistics companies capture their future competitive edge.