7 Logistics Trends that are Driving the Industry in 2016
June 20, 2016
2016 is already shaping up to be a year of great challenge for the world of logistics; with ever increasing customer expectations, competitors racing to make the most of new technology and a media spotlight on ethical trading. However, each challenge provides a great opportunity for those who embrace the changes and listen to their customers. In this article, we take a look at the top 7 logistics trends to look out for in 2016, from ethical trading, to big data and beyond.
1. Data, data and more data
Big data has been touted as the trend to watch out for across multiple industries for the last few years and it’s not going away anytime soon. Why? Largely because data is not being utilised to its full potential and there is room for significant growth in the sophistication of big data processing.
The gap between the volume / quality of the data being captured and power to process the data within conventional systems is where we see substantial gains being made this year.
Perhaps the primary contributing factor to supply chain complexity is the ever growing variability, volume and velocity of data. However, advancements in big data processing will allow for more accurate volume analysis, parcel health analysis, route planning as well as greater levels of transparency for both managers and clients with the use of real time data processing tools.
2. Increasing expectations
Media hype about disruptive technology, IoT, greater connectivity and Big Data has increased the expectations of consumers and buyers in both, B2C and B2B landscapes. Finding a balance between managing competitive pricing, keeping supply chains moving at the pace of demand and also ticking enough ethical boxes has long been the source of supply chain pressure. However, customer expectation looks set to continue to rise and being ready to react is ever more critical and modern logistics tracking systems will take center stage.
3. Supply chain globalisation marches on
For all merchants and retailers, cross-border efficiency of logistics operations is critical. Inventory management plays a major role in supply chain globalisation as companies look to outsource manufacturing to overseas marketplaces for better bulk deals. For example, it is already common practice among buyers around the globe to purchase from China directly. Meanwhile, suppliers are selling products via online channels such as JG1 and Alibaba to Chinese shoppers.
Globalisation and Supply chain management are interconnected. The global reach requires the understanding of the different markets, including the risks and regulations. Businesses operating internationally need to ensure their supply network has the infrastructure and expertise to handle everything from customs clearance to landed cost management and timely deliveries.
2015 was a big year for acquisitions and mergers. With the same market conditions in place in 2016, the consolidation trend looks set to continue. Ocean carrier alliances and joint ventures to win new business will also be on the rise as those who have not been absorbed by a mega-merger look for ways to compete. Consolidation, whether in the form of merger, acquisition or collaboration is a trend set to continue throughout the year as the logistics giants battle for market share.
5. E-commerce growth
This harks back to our point 2 about increased customer expectations. E-commerce has revolutionised the way we buy. Greater product choice, new marketplaces at the touch of a button, more collection points and shipping destinations have, in combination, led to an increasingly complex supply chain. Add in the social and environmental factors of increased traffic, pollution and enlarged carbon footprints and you can soon see how e-commerce can be considered a double-edged sword. On the one hand, it creates a wealth of opportunity. On the other hand, it is a veritable minefield of potentially costly mistakes.
More supply chain executives and logistics managers are moving towards customisable cloud-based SCM systems, such as those provided by Adjuno, to keep track of their supply networks and manage risk. E-commerce is a huge opportunity for retailers and merchants, one that cannot be ignored. However, failure to prepare for its growth could prove disastrous for those who find themselves left behind.
6. Focus on sustainability and ethical compliance
Ethical and sustainable supply and distribution methods are hot topics in the boardroom this year. Logistics companies are now tracking and monitoring their operations to align with the pressure faced by the retail market to operate responsibly. Retailers need to be seen as using trusted, fair and sustainability-driven logistics partners. As supply chain execs strive to ensure their materials and products meet with local compliance standards, so too will they look to their supply network partners for high ethical standards. Logistics organisations are required to be open and transparent in all aspects of their operations, both by auditors such as Omega Compliance and as customers demand reassurance and proof of social and environmental responsibility. Ethical compliance and sustainability are more than just checking a box.
7. Enter the robots: AI reaches the next level
Where once AI was a thing of Hollywood dreams, it is now a powerful tool into which huge funding has been injected. The question as to whether we would ever see self-driving vehicles make it from prototype to tarmac was answered in 2015. Now it is a question of when, where and how.
Some predictions suggest that as early as 2020, we will see in the region of 10 million autonomous cars on our streets and highways. Meanwhile, manufacturers continue to invest in smart factories increase production efficiency. Personally, we can’t wait to see robot vehicles carrying high-tech cargo to and from robot factories. The future feels like it has finally arrived.
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