Supply Chains 2019 Part 2
Paul Trudgian Ltd | Supply Chain & Logistics Consultancy No Comments

In the first part of this two-part series about Supply Chains in 2019, we looked at the political landscape shaping our supply chain world, the uncertainty we are yet to escape and the nature of labour shortages in the industry. This second part in our series looks at the trends we can expect to see continue and emerge, with a particular focus on technology, automation and robotics.

The role of automation with the labour shortage

It makes sense that the drive to increase automation in customer fulfilment and warehousing is sparked by the labour shortage. Combine this with uncertainty and supply chain managers are looking for both flexible and scalable solutions, which don’t necessarily depend on labour. Automation goes a long way to helping to provide such solutions.

It would be naïve to suppose that the entire problem regarding the labour shortage in supply chains can be solved through increasing use and development of automation. We still need to tackle the recruitment issue head on through training and retention programmes. Combining these with robotics and automation is more likely to be the best approach.

Digital supply chains

Technological changes and advancements aren’t simply limited to the warehouse and logistics level. We need to continue to pay attention to all aspects of our digital supply chains throughout 2019 and beyond. Evaluating the right software which is suitable for our current needs and those in the future is a challenge, but one we need to embrace.

The technology available to us is still highly variable. This makes selecting and defining what we need inordinately difficult. Therefore, we should focus our efforts on achieving increased visibility. By doing this we are making use of technology in a way demanded of supply chains by the wider market. This, in turn, will facilitate collaboration. We can then also use this knowledge to feed through to artificial intelligence (AI) and machine learning.

Therefore, it’s safe to say that 2019 will continue to be a year where increasing numbers take up greater levels of digitisation and thus automation too. It will be a supply chain’s ability, through their technology, to adapt and flex, which will underscore the winners and losers of the wider political landscape.

Of course, for many, this means an introduction of the Internet of Things (IoT) and its effective use in various initiatives throughout the supply chain. The scale at which we’ll see it being used will reach new heights.

The IoT will combine with warehouse control systems to provide the real-time information that consumers and businesses now expect.

The impact of machine learning

2019 will be the year that machine learning in supply chains accelerates. For the last year, AI and machine learning have still largely been concepts, not plans. However, momentum is building and we are likely to see continued introduction of machine learning on a wide scale over the next 12 months. As consultants within the supply chain industry, we are seeing more and more demand to utilise machine learning to gain the competitive edge.

This is because the insight we are gaining from digitisation (and such things as the IoT) is fairly meaningless if we don’t have the capability and the capacity to do anything about the information gathered. Machine learning is the only way of implementing effective change on the back of ever dynamic data. In the political climate we’re experiencing, this ability to ‘flex’ seamlessly couldn’t be more important.

This is aided by improvements in machine learning itself. It can now be used across a range of areas from fulfilment operations to supply chain planning, and warehouse management systems to control-tower visibility. It is machine learning which allows the supply chain to actively adapt to the situation around it.

Other drivers of technological change

We need to look beyond flexibility, labour shortages and an ability to weather the political landscape for drivers of technological and supply chain change.

The growing drive for increased corporate social responsibility (CSR) is acutely relevant to supply chains. Consumers want to be able to trace the origins and provenance of their entire item. They want to know that retailers care enough to achieve visibility all the way up the chain and it is digitisation which makes this possible.

This also applies to climate change. Ethics and sustainability need to become core to supply chain organisations. As consumers are increasingly willing to pay more for sustainable products, this doesn’t just make environmental sense, but financial sense too.

However, this is still unlikely to come at the expense of the convenience achieved through online shopping. Therefore, digitisation and automation will need to occur from end-to-end. If you’re the company who can guarantee ethical sourcing yet still deliver using same-day delivery (based on a Just In Time model), then you’ll be well ahead of the curve. This will involve combining everything from the IoT, machine learning, blockchain and more.

Personalisation

Off the back of this, we also need to consider how personalisation will continue to be a notable trend and driver in 2019. We’ve seen increasing demand (and capacity) for automation in the last few years. This is set to continue.

Consumers expect both individualised products and individualised service. Again, this will only be possible through the development and use of technological tools. We can likely expect to see increasing 3D printing within warehouses and at the manufacturing level, to make this possible in an attempt to personalise products as close to the consumer as possible.

Let’s get stuck in

Looking at our two-part series, we can see how 2019 is going to be a hugely interesting year for supply chains. The political landscape of global tariffs and change is still in a melting pot of uncertainty. However, within this, technology continues to provide solutions and meet our expectations.

Get us in your supply chain camp to tackle your 2019 with confidence, call us on 0121 517 0008.

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