2017 was an important year for delivery logistics. With ecommerce sales reaching $23 trillion in annual sales worldwide, customers are relying on better and faster deliveries for all sort of goods and services. But this evolution in the supply chain, and for last mile fulfillment in particular, doesn’t end with retail. From restaurant chains to supermarkets to pharmacies to service providers, the world of logistics is experiencing unprecedented change. This radical shift in customer behavior and expectations regarding deliveries means that many organizations will have to remake their entire supply chain in order to become more agile, and remain competitive in a world where an optimized, lean and efficient logistical infrastructure is at the core of a successful customer-centric business. These are some of the key industry trends in delivery logistics and supply chain management which will take center stage in 2018.
Big Data. From the millions of data points and variables in any supply chain should come the knowledge required to determine business strategies and to support decision-making processes. And the puzzle isn’t getting any simpler, with companies deploying different tech platforms and using multiple fleets and 3PLs throughout their supply chain. In addition, there is the data collected at customer touch points, from feedback on the delivery to driver ratings. All this information needs to be processed and analyzed since the “brand experience” doesn’t only apply to brick and mortar establishments anymore – and companies are increasingly coming to realize that the delivery process is a powerful catalyst to improving or swaying brand perceptions.
In the context of the supply chain for most businesses, big data and predictive analytics are still an untapped resource that can potentially provide insights which help anticipate or respond to events or disruptions. Unpredictable consumer behaviour, traffic or weather patterns, and labour unrest are all external events that can disrupt a supply chain and lead to increased costs and customer service challenges. Big data can help organisations become better trading partners to their customers and suppliers. But before insights and analytics can be leveraged for a better supply chain, there’s a huge task at hand for the many organizations that need to first collate data points from all sources and align them to their business operations.
Sharing Economy. These solutions will soon begin disrupting logistics services. We’re already seeing how Uber and other companies setup driver networks to deliver packages to consumers by using their personal vehicles. To cope with the shortage of drivers and with the need for flexible fleets that are available based on business demand, the sharing economy will begin spreading in 2018 into big brands that need to find alternatives that help them create a more flexible and adaptable logistics infrastructure.
This trend can take different shapes and forms. For example, earlier this summer WalMart piloted a scheme in which some of their store staff could earn extra cash by delivering packages to customers on their drive back home. Other companies are looking into different solutions that would enable them to share resources and fleets in order to become more efficient – for instance, a restaurant fleet with spare time after lunch rush hour could potentially help a retailer struggling to meet demand during the peak holiday season.
Real-time Visibility. We’re moving towards a supply chain which is fully transparent and trackable in real-time. On the one hand, it’s helping companies become more efficient by knowing the precise status of each order, driver and customer. On the other hand, customers are always aware of the status of their purchase and have the ability to interact with their driver directly if need be. But transparency can go far beyond efficiency, comfort and value. Customers are increasingly demanding and worried about the supply chain behind their purchases. As Andrew Marder points out, the definition of transparency is expanding, with customers increasingly aware of factors such as worker rights issues, environmental impact, and even political affiliations.
The world is changing fast, and it is key to be able to rapidly react to industry changes and to new technologies that we might not even have heard of yet. So those companies that stay with their finger on the pulse and with an open mind when it comes to rethinking the way they work, will be the ones that succeed in the long run. We all look forward to another year where reality often surpasses what not long ago felt like fiction – constantly creating new milestones and standards that move the entire ecosystem forward with groundbreaking innovation in technology, commerce and logistics.
1. Big Data: “Big Data” Means Unstructured Data for Supply Chain Managers, Material, Handling & Logistics, vol. 68, no. 3, p. 12, 2017.
2. Business Model Toolbox (2017) [site] – access mode: http://bmtoolbox.net/patterns/sharing-economy/ – The Sharing Economy, business.
3. AIOTI (2017), The Alliance for Internet of Things Innovation (AIOTI), European Commission.
4. Baesens, B., (2017), Analytics in a big data world; the essential guide to data science and its applications, Whiley and Sons Inc.