Four Emerging Supply Chain Trends for 2019
In this two-part blog series, we will look at emerging trends in the supply chain as well as factors impacting supply chain design.
Supply chains around the globe are being remodeled. Outside demands, modern technology developments along with internal progress are compelling organizations to reexamine their network to ascertain how their future supply chain ought to be organized, both in regard to volume and functionality. What precisely should you do today? An excellent starting point is to think about the diverse continuing trends which will influence the supply chain of the future. These trends are assembled into 4 primary classes:
- Expanding technological innovation
- Concentration on supply chain visibility
- Sharing economy
- Changing client channels
Now, we will examine each in a bit more detail.
Expanding technological innovation: Drones, autonomous intelligence and robot automation could inevitably change warehousing and transportation, thus creating networks which could appear as well as function extremely distinctly from those of today.
Concentration on supply chain visibility: The Internet of Things, Big Data and information openness may boost organizations’ capability to acquire visibility on the real-time status of the supply chain network, therefore providing them the opportunity to not just quickly react to issues but far more significantly, foresee and circumvent problems more successfully. Data abundance will likely be utilized to obtain information on both short-term and long-term enhancements to the supply chain and beyond.
Sharing economy: On demand warehousing as well as on-demand logistics will permit companies to become far more versatile in the way they manage their supply chain. Lower capital expenditures and increased flexibility will probably be appealing for companies which are in swiftly developing sectors.
Changing client channels: There’s a continuing move away from conventional retail to direct-to-consumer shipping and delivery. Take into consideration that 40% of brands currently sell straight to the customer, and that those direct-to-customer sales are estimated to reach $130 billion by 2025. This calls for a supply chain with distinct capabilities compared to those in position currently.
Gauge effect on present supply chain
With all these wide trends in mind, companies will need to continuously monitor certain analytics such as warehouse utilization levels, true client service level, expense to serve/profitability of merchandise categories, and utilization of stop-gap methods to discover if there’s a continuing effect on revenue advancement along with operating margin.
It is essential to make sure that operations monitors and has visibility to these types of analytics spanning their organization’s supply chain, since these measurements will supply an indicator that adverse business impacts could be forthcoming. Operations shouldn’t just observe and produce reports about the analytics, but it must also possess the avenues to convey these measurements along with their subsequent effect on the organization to the organization’s C-suite.
Sales and Operations Planning (S&OP) is a vital effort that lots of top businesses are employing to guarantee even broader visibility on client impact. The following transformative part of S&OP is usually to make use of real-time visibility to position better on anticipated along with inbound demand from customers, which in turn, better equips this company to structure and meet that demand.
These analytics should be supervised frequently to plan essential modifications to the supply chain, as the lead time to these adjustments might consist of a couple weeks to a few years depending on the degree of network enhancements required.
Identify holes in the organization methodology
Prior to any supply chain overhaul, it is vital to figure out if the company’s business strategy can be sustained by the prevailing supply chain network. Depending on how the organization is oriented – be it service focused, price driven or perhaps a mix of both – the current supply chain network could possibly be out of synchronization with the business strategy. In the event the organization has recently experienced a strategic alteration, it is vital to capture the effects of the new strategic path on the supply chain. Better still, make supply chain renovation an element of the strategic transformation considering that the supply chain is a strategic enabler.
In part two of this blog series, we will look at factors impacting supply chain design.