10 Year Outlook: The Supply Chain of 2025

Published : October 2, 2015

The Supply Chain of the Future

The supply chain experienced quite a few evolutions in 2015, and can no longer be accused of being simply a cog in the machine of commerce. Logistics news and breakthroughs have thrust the operations and warehouse teams into the spotlight, giving them the gravity they deserve as contributors to the success of far-reaching business decisions. As the final quarter of the year begins, the fulfillment industry has a great deal to look forward to in the coming decade and exciting new prospects to incorporate into their best practices.

Responsive Backup Planning

Logistics managers who had a contingency plan in the works got the jump on ill-prepared rivals in the first few months of the year. The port strikes and closures on the West Coast were devastating to many supply chains, but they also gave the industry an important view into worst-case-scenario territory. As Kelly O’Riley and Matt Collins discuss in their white paper for MD Logistics, it's not enough to simply have a static backup plan in place; companies were forced to assess real time congestion of secondary transport systems and make their moves accordingly. While the alternate route network was stressed by the additional load, it highlighted important shortfalls and opportunities for improvement on the part of carriers. It seems almost inevitable that another port closure or similar wide-scale event will rock the logistics industry in the coming years. That potential, coupled with the concern over current issues like the current truck driver shortage and ever-increasing demand, will continue to drive new transportation options into the market. Expect to see smaller, lighter carrier options for JIT-style fulfillment and more shared truckload scenarios as difficult times create strange bedfellows out of rivals. 

Innovation Leads the Way

The analog supply chain has officially gone the way of the dinosaur, stepping aside for futuristic possibilities that might have seemed like science fiction only a few years ago.

As with many business breakthroughs, giants such as Google and Amazon are leading the charge for drone-based delivery. Drones—flying robots controlled by a human being back on the ground—are able to surpass many of the traditional challenges of the "last mile" in deliveries, such as time-robbing flights of stairs and traffic jams in metro areas. Doubling back to the warehouse, Amazon is also using drones - albeit land-based ones - to pick, pack and inventory inside its Seattle-based mega-warehouse, reports VOA News. 

The IoT, or Internet of Things, has also cemented its place in the supply chain, linking products, drivers, vendors and other moving parts of the supply chain through RFID, GPS and other automatic information uploads to drive dual-sided transparency and efficiency in fulfillment. 

Why You Need to Get Ready

In terms of best practices, waiting to make sure a new technology is going to "take off" isn't a bad plan, but the observation period for these 2015 innovations in the supply chain is coming to a close. As we head into 2016 and beyond as an industry, take the time to assess your own readiness:

  • Is your warehouse and inventory layout conducive to upgrades like RFID tagging?
  • Depending on the size of your warehouse, could drones be incorporated into pick/pack?
  • Do you and your vendors have more than one alternate transport route in your backup plans?
  • Are you habitually reading up on the state of the industry in search of new efficiency measures?

If there are any "No" answers in there, you may not be properly prepared when the future arrives to revolutionize your logistics workflow. Even if you don't foresee your team sharing the warehouse floor with zippy little robots or facing another disastrous port closure, it doesn't mean you can afford to ignore the possibility of incorporating either possibility into your planning for the future. Change can be a difficult feature to embrace in an industry balanced on consistent performance, but if that change helps stabilize future consistency, it's all part and (literal) parcel of the same goal.

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Topics: Vendor Management

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