The year 2018 saw the increasing use of advanced technology to give more intelligence to logistics operations. At the same time, companies are putting more effort in the environment aspect and sustainability of the supply chain. With the end of 2018 approaching, let’s look back with Abivin at some of the most prominent trends in supply chain management.
1. Business Intelligence powered by Artificial Intelligence and Advanced Analytics
Modern logistics operation involves many different stages. In each stage, there is a huge number of different processes, which requires numerous machines, labors, etc. The complexity of such operation can give headache to even the most experienced managers, without the help of technology.
In the year 2018, Artificial Intelligence (AI) and Advanced Analytics have evolved into the kind of “can’t do without” technology. More small to large enterprises are applying this technology to improve the efficiency of business process, especially in the supply chain. AI and Advanced Analytics are powering Business Intelligence (BI) system, transform supply chain data into simple, accurate, real-time reports.
Avoid big data overload: No one can deny the importance of big data in modern business landscape. But what happens when you can’t process a huge amount of data coming from different sources? That’s why investing in AI-powered business intelligence software can help companies break down data into manageable and actionable insights.
Real-time analytics: Thanks to the intelligence of AI, Business Intelligence tools can enable just-in-time information, give supply chain managers alerts and business insights whenever they need to ensure products are delivered on time, and in full.
Shortage of data experts. According to McKinsey, there is a shortage of labor with data analytic skills in the United States. To harness the power of data, companies can employ data experts in different department, which is a really good thing to do. However, even if a company can afford to do so, making timely decisions with data requires the right processing software.
AI-powered Business Intelligence software has brought tremendous changes in the business world in the year 2018, and will continue to do so in 2019.
2. The migration to the cloud in supply chain management
While supply chains have been migrating to the cloud in the recent years, not until now that it’s reaching mass-scale adoption. According to a recent report from International Data Corporation (IDC), by 2020, approximately 80% of supply chain interactions will happen across cloud-based commerce networks.
In 2018, companies continue to rely on data to make decisions in logistics. Algorithms, data-visualization tools and advanced analytics are leveraged to shorten delivery times and increase efficiency. In the future, the resulting boost in supply chain performance could reduce the impact of disruptions by up to one-third, according to IDC.
Kimberly Knickle, research vice president of IT Priorities and Strategies at IDC Manufacturing Insights, said manufacturers have prioritized cloud adoption initiatives in their supply chains because there is "so much information that needs to be shared with terminal constituents." Retailers and distributors are also investing in cloud-based commerce platforms to drive a seamless experience for customers, said Jim Barnes, president and CEO of supply chain consulting firm Envista.
3. Technology enables green, sustainable supply chain
Logistics activity can bring about negative impacts to the environment. Green Logistics and Sustainable Supply Chain Management can help companies generate new raw material, streamline the production and operational activities in terms of cost and environmental parameters, streamline the logistics activities in terms of cost and environmental parameters, (e.g. reduced costs, shorter lead times and better product quality associated with the implementation of ISO 14000 standards, which provide a framework for environmental management issues)
As the public becomes more aware of environmental issues and global warming in 2018, consumers are asking more questions about the products they are purchasing. As a result, companies need to have answer for questions about their green manufacturing process, how sustainable their supply chain is, how much the companies is affecting the environment, how much carbon footprint is being produced everyday. This year, there is significant evidence showing the green initiative of the supply chain driven by technology. Cleaner ships, trains, planes and trucks combined with automation and clean technology in cargo handling and warehousing operations are accelerating. Moreover, many countries are driving investment into green initiatives, as well as enacting environmental business policies.
Evidence of greening supply chain can be found in the delivery giant UPS. Just earlier this year, UPS announced it would add additional compressed natural gas fueling stations and add 390 new CNG tractors and terminal trucks and 50 liquefied natural gas vehicles to its alternative fuel and advanced technology fleet, which has more than 4,400 vehicles. In the past, by using more natural gas for its ground fleet, UPS decreased CO2 emissions by 100,000 metric tons in 2016.
Also, as more last-mile deliveries are made, FedEx, UPS, DHL and other delivery providers are stopping the use of traditional vans and instead turn to electric vehicles, boats and bicycles.
4. Increasing application of robots
As technology advances in the recent years, companies are applying more robots in manufacturing, warehousing and transportation. By 2019, robots will be in use in 50% of fulfillment centers, according to IDC. This will result in productivity gains of up to 30%, help drive down the cost of operations and off set an increasing shortage of labor.
Amazon has been using robots in its warehouse for years. More than 100,000 robots are employed by Amazon to fulfill different warehouse tasks including picking and palletizing. Samuel Bouchard, CEO of Robotiq, said robots are becoming easier to program and can be adapted to meet the needs of the supply chain. Through sensors and programming, distribution centers and warehouses can deploy these flexible robots to handle multiple tasks. "Lots of repetitive movements can be automated with collaborative robots. This will allow human operators to focus on value-added jobs, increasing quality and productivity in the process," Bouchard said.