ON THE HORIZON: TOP TRENDS IMPACTING SUPPLY CHAIN MANAGEMENT IN 2020
Press Release: Westerville, Ohio, December 3, 2019
Scott Sureddin, CEO, DHL Supply Chain, North America: “2020 marks a new decade in supply chain management in which operations benefit from increased digitalization, customers benefit from higher levels of service and supply chain organizations benefit from greater diversity in the workforce.”
DHL Supply Chain, the Americas leader in contract logistics and part of Deutsche Post DHL Group, has shared the three supply chain trends that will have the greatest impact on operations in North America in the coming year. As we enter a new decade, the technologies that have emerged in the last five years are maturing to provide greater value and address additional challenges and applications. This process, combined with an influx of new talent in the workforce and continually evolving customer expectations are ushering in a new era of supply chain management.
“We know the supply chain is continuing to become more complex,” said Scott Sureddin, CEO, DHL Supply Chain, North America. “As we enter a new decade, we are seeing a maturation and expansion of many technologies, and applications we could not have imagined even three years ago. In many ways, these technologies, combined with a new generation of talent in the workforce and less separation between brands and consumers, are contributing to the evolution of the supply chain. We will be able to be more productive and more efficient, while providing an even higher level of value to our customers.”
Below are the three trends expected to have the most impact on the supply chain in 2020:
- Emerging technologies go mainstream.
The past decade has brought technological advances at a breakneck speed, from autonomous vehicles to Big Data to robotics. As 2020 approaches, those technologies are maturing and being more widely adopted. What were once niche technologies are now becoming available to companies of all sizes across industries.
Customers are eager to pilot new technology in their facilities, and are now faced with the task of determining which technologies will not only deliver the greatest return on investment, but also integrate most effectively into their existing operations. With 5G on the horizon and the pending rush of even more data, now is the time for companies to ensure they have a strong data management foundation so they are well positioned to collect and, more importantly, mine the data to derive actionable insights. Those companies already at the forefront are applying insights to solve a variety of challenges including leveling out the traditionally disruptive spikes of peak season.
DHL Supply Chain’s recent announcement of a partnership with Convoy and Turvo shows how its transportation digitalization strategy is continuing to advance. The partnerships allow the company to accelerate its adoption of cutting-edge freight technologies to provide greater value for customers.
“As we go into 2020, we’ll see artificial intelligence getting more accessible, robots becoming more sophisticated, and predictive modeling becoming even more accurate,” said Sureddin. “This maturation will allow us to apply technologies in even more ways to drive efficiency and create value for our customers. The last decade introduced us to these technologies and the next decade will make them commonplace.”
- Product positioning becomes paramount.
There are more ways than ever for products to get into consumers’ hands. From traditional brick-and-mortar to buy online, pick up in store, the lines have blurred between e-commerce and traditional retail. Combined with the high delivery expectations of consumers, companies need to have the right item in stock to fulfill a two-day or even same-day order. To tackle this challenge, inventory positioning becomes critical.
The distance between consumers and the products they want will continue to shrink in 2020. The new decade will bring growth of micro-fulfillment centers, especially in the grocery industry. Micro-fulfillment centers will continue to make sense for companies who need to quickly and efficiently fulfill online orders. These micro-fulfillment centers, often in urban areas, are changing the image of a traditional distribution center. It will soon become just as likely for a distribution center to be in a high-rise in Manhattan as it will be in a sprawling facility in a rural area, allowing consumers to receive their purchases with greater speed and efficiency. These micro-fulfillment centers sometimes take the shape of so-called ‘dark stores,’ automated, mini-warehouses or distribution centers to help fulfill online orders. Dark stores often look like actual stores, but without the customers. Although dark stores themselves aren’t new, the next year will bring more widespread adoption of them.
- Gender diversity makes its mark in the supply chain.
While labor challenges have captured all the headlines, a more subtle transformation is occurring in the workforce. Women are entering the logistics industry in greater numbers than ever before. In fact, women now make up 32 percent of DHL Supply Chain’s new associates. A variety of factors are influencing this shift including a greater emphasis on STEM in both early education and campus recruiting efforts. The integration of more technology has also minimized the importance of physical strength in traditional warehouse roles.
The new decade will usher in a new era in supply chain management. The industry will have new and different capabilities to better manage complexity through increased digitalization, and companies will be able to provide customers with increasingly higher levels of service. These factors will allow the industry to withstand global economic uncertainty and to continue to advance in speed and productivity.