WHAT IS NEXT: THE TOP TRENDS IMPACTING SUPPLY CHAIN MANAGEMENT IN 2019
Press Release: Westerville, Ohio, 01/08/2019
- Scott Sureddin, CEO of DHL Supply Chain, North America: “In 2019 new technologies help to manage an increasing complexity along the supply chain, enhance productivity and reduce costs.”
- The ability to manage the four “Ts”—technology, trade, talent, and transportation—will define how well supply chain organizations can meet customer expectations in the coming year.
DHL Supply Chain, the Americas leader in contract logistics and part of Deutsche Post DHL Group, has shared the top supply chain trends for 2019. While there are a number of emerging technologies that supply chain managers should have on their radar, from blockchain to platooning, the company has focused on the four trends that will have the greatest impact on operations in North America in the coming year.
“Supply chain complexity has been growing for years and several of these trends threaten to create even more complexity,” said Scott Sureddin, CEO of DHL Supply Chain, North America. “However, we are also now seeing key technologies reach a level of maturity that enables them to be used to better manage complexity while also increasing productivity and reducing costs. That makes 2019 a very exciting year in the continuing evolution of the industry.”
Below are the four trends expected to impact the supply chain in 2019:
1. Warehouse robotics come of age.
Robotics are already proving their value in select warehouse applications, but the technology is expected to reach a tipping point in 2019. The DHL Supply Chain distribution network is an example of the leap robotics could make. The company‘s recent announcement to expand use of select emerging technologies by 2020 includes a heavy focus on robotics based on strong results from initial trials.
While order picking is a key focus of robotic development, the technology is expected to have an impact that extends beyond e-commerce fulfillment. The ability of the current generation of robots to work alongside humans while performing low-value tasks that increase overall warehouse productivity is applicable across a broad range of industries and warehouse tasks.
“At DHL, we’ve taken a multi-vendor strategy to robotics that allows us to select the best technology for each application while using our scale to support multiple emerging solutions. This will ultimately help broaden the range of solutions available to the industry,” Sureddin said.
2. Increased uncertainty drives greater agility.
In today’s global and interconnected supply chains, new tariffs, renegotiated trade agreements and regional climate events can have a ripple effect that paralyzes an entire supply chain. This is making proactive supply chain planning more important than ever. Designing supply chains with the ability to flex to circumvent natural disasters or quickly re-configure to accommodate shifts in costs or material availability resulting from tariffs has become critical to maintaining high service levels.
Technology is providing a solution on this front as well. Sophisticated supply chain modeling allows what-if scenarios to be performed to quickly identify the best response to sudden changes in costs, transportation routes or material availability. In addition, cloud-based risk management solutions are using the power of big data analytics to identify potential supply chain disruptions and proactively reposition orders and inventory to maintain service levels.
3. Talent gets the attention it deserves.
While the talent gap remains a significant challenge, solutions are starting to emerge. As the world’s largest contract logistics provider, DHL Supply Chain has taken a proactive and multi-faceted approach to recruiting and retention that has allowed the company to consistently meet customer requirements in tight labor markets. In addition to using robotics to increase productivity, the company has automated every step of the recruiting process, from online applications to pre-hire testing to onboarding, to increase the quantity and quality of applicants for hourly positions. DHL Supply Chain is also working closely with a number of universities and colleges to promote the career opportunities available in supply chain management while helping prepare students to enter the industry.
4. Digitalization closes the transportation service gap and helps shippers think beyond today’s shipment.
Digitalization is being applied broadly to a host of supply chain issues, but the area that will benefit most directly in 2019 is transportation. A number of digital solutions are emerging to enable the industry to make better use of available transportation resources and close the service gap.
Cloud-based Transportation Management Systems (TMS) are extending the value of TMS to smaller enterprises, providing the insight and data to optimize resources. In addition, increased use of IoT in the form of fleet management systems allows data from truck operations to improve utilization and reduce downtime. However, the biggest opportunity is in the emergence of digital freight platforms that create online marketplaces that quickly and efficiently connect shippers with carriers, streamlining processes, optimizing costs and expanding the available options. As a leader in transport solutions, DHL Supply Chain has heavily invested in these types of innovations to help shippers think beyond today’s shipment and strategically plan for the future, while still solving the challenges of today.
Increased complexity will continue to challenge the industry in 2019; however, new digital solutions are reaching a level of maturity that warrants widespread adoption. This could allow the industry to take significant steps forward in the areas of speed and productivity, while effectively managing the challenges created by talent and tariffs.