Supply Chain & Logistics - Connected Corners

Supply chain & logistics – Spotlight on 5 key evolving trends

This topic casts a spotlight on some of the key evolving supply chain & logistics trends as well as briefly introduces some of the key enablers that would support value chain players in their optimization and/or transformation efforts

This topic casts a spotlight on some of the key evolving supply chain & logistics trends as well as briefly introduces some of the key enablers that support value chain players in their optimization and/or transformation efforts

Quick note: Despite some similarities inherent to the supply chain function across industry verticals, each business is relatively unique (geographic presence, product mix, service offerings, strategic goals, industry partnerships, et al.) and as such their supply chain (SCO/SCM) strategies, logistics solutions & CX programs will be reflective of their individual goals & capabilities

Spotlight on 5 evolving trends

Supply chain & logistics are amongst the most critical business functions for a wide range of industries (CPG/FMCG manufacturing, retail, healthcare, et al.) and is in a state of perpetual evolution

…owing to ever changing consumer behavior, industry transformations (e.g. eCommerce, D2C), tech advancements (IoT, blockchain, et al.) optimization models, industry partnerships and everything in between

Although at any given time there are a multitude of concurrent optimization & transformation initiatives underway; varying by location, industry vertical, business type, product categories, operational network chain and other such factors…

…the underlying goals are generally similar – i.e. reducing costs, improving operational efficiencies, becoming Eco-friendly and enhancing customer experience (CX)… here are 5 key evolving trends to keep an eye on

Supply chain & logistics: Key evolving trends - Connected Corners

1. Growing spotlight on Cold Chain segment

Well before the ongoing global vaccination drive, there had already been a growing focus on the broader cold chain segment; driven in part by a multitude of key evolving consumer & industry trends… placing cold chain operations front & center for businesses across a wide range of industries

Cold chain is a subset of supply chain that entails optimally managing a complex network of temperature & humidity controlled assets throughout the product’s end-2-end journey from the point of origin (manufacturing plant, farm, et al.) through to centralized / de-centralized cold storage facilities, distribution centers (DC), destination customer solutions (think: last mile delivery & cold lockers) as well as multi-modal cold transport fleets

Balancing the function’s operational efficacy, process transparency, regulatory & safety compliance, ROI growth, real estate opportunities, CX and even carbon footprint amongst others has also taken a center stage for its value chain players

Furthermore, just as with broader supply chain; businesses may choose to either entirely in-house or outsource (3PL/4PL/5PL) parts of their cold chain management & operations function… each presenting their own benefits & challenges

Read more about the 6 key consumer & industry trends driving spotlight on cold chain segment as well as the initiatives value chain players can explore in optimizing or transforming aspects of their operations

2. Reverse logistics will be front & center

Whether it is to support the growing circular economy, improve CX in an eCommerce/D2C retailing era or facilitate product recall programs; reverse logistics is going to be front & center for myriad of businesses across industry verticals

Reverse logistics refers to the ‘opposite movement‘ of products… i.e. from the end user (e.g. customer) or destination (e.g. retail POP) back to either its original manufacturer or a designated 3rd party location (e.g. recycling, re-distribution center)

As eCommerce & D2C adoption continues to grow; businesses (particularly within retail industry) are increasingly placing equal (if not more) emphasis on first mile pickup as they have been on last mile delivery

… but when implemented right; this typically cost intensive (reverse logistics) operation will play a significant role in delighting customers i.e. enhance retail eCommerce/D2C CX (simply put: better returns handling = happy customer = repeat purchase)

Balancing reverse logistics’ operational efficacy (back to DC, store, manufacturer, et al.), costs, regulatory compliance (recycling, et al.), customer strategies (return policies, process, et al.) and even effectively managing carbon footprint are amongst the key challenges value chain players seek to address

3. JIT (Just In Time) vs. JIC (Just In Case) – Balancing act continues

Fresh from lessons learnt in 2020 – the year where unforeseen events caused a sudden & severe shortage of everyday consumables like toilet rolls & pasta – CPG/FMCG ecosystem businesses are seeking to strike an optimal balance between JIC and JIT inventory practices… in a bid to reduce costs whilst improving CX & operational efficiencies

Additionally, ever changing retail landscape, consumer buying behavior and even delivery options (2 hour, same day, click-and-collect, et al.) are continually adding layers of complexities to an already delicate process of demand planning & inventory optimization; which have profound impact on operational costs, recurring revenue and shopper/customer CX

…placing an ever increasing focus on developing solutions that integrate elements of JIC (Just In Case) – practice of keeping ‘more than required’ inventory on hand to anticipate sudden spike in demand or simply to delight customers (read: CX)… into the existing ‘gold standard’JIT (Just In Time) frameworks – practice of keeping just-enough inventory to fulfill orders and minimize costs

In fact, this trend even extends to the venerable automotive industry – who have championed JIT philosophy over decades – where many manufacturers are facing production shutdowns; caused in part due to severe shortage of semiconductor chips (traditional JIT candidate)

4. Shift towards scalable & modular supply chain platforms

For businesses facing myriad of challenges (capital, tech, expertise, partnership, resources, et al.); shifting towards a more scalable & flexible supply chain platform model could be an apt alternative; one that also includes a mix of in-house & outsourced functions

Advancements in digital, cloud, IoT, AI, automation and anticipatory analytics engines are collectively enabling virtually every supply chain function to be offered as a scalable & modular ‘off the rack’ outsourced model (read: SCaaS platforms)

SCaaSSupply-Chain-as-a-Service – is an outsourced model where providers offer businesses to manage their end-2-end supply chain operations (SCO) or individual functions thereof (manufacturing, procurement, warehousing, demand planning, forward/reverse logistics, fulfillment & last mile delivery and everything else in between)

This type of arrangement may enable many businesses to reduce their CAPEX & OPEX costs whilst retaining the ability to dynamically scale their SCO to effectively meet sudden shifts in consumer, industry, market, competitor & regulatory needs as well as account for low frequency/high impact events

Through this transition process, some of the traditional value chain players may themselves transition into a SCaaS provider (read: revenue diversification) by outsourcing their ‘SCM expertise, capabilities, networks & capacity’ they have developed in-house

5. Green + Circular Supply Chain is becoming the new norm

Whether it is to comply with increasingly stricter emissions & waste regulations worldwide, improve their eco-footprint or perhaps even a long-term re/branding exercise; businesses are increasingly transitioning their supply chain operations to become environmentally friendly and ultimately carbon neutral

Over the coming years, businesses will be seeking to develop & implement an apt mix of green supply chain and circular supply chain initiatives to achieve the aforementioned goals

Additionally, large corporations have been increasingly requiring their procurement, manufacturing & distribution partners to implement the same high/gold standard of Eco-friendly initiatives into their operations… or at the least concerning their branded products

– Green supply chain: Initiatives that include investment in renewable energy sources across the supply chain operations (think: solar powered warehouse facilities)as well as emission reducing/eliminating vehicle fleets

– Circular supply chain: Initiatives that include investment in infrastructure, solutions & partnerships that enable recycling & re-purposing of final goods (where feasible) as well as the products supporting the actual SCO (think: shipping pallets, packaging materials, delivery boxes, et al.)… all of which goes a long way in helping reducing waste and improving environmental footprint

Key Enablers

Smart supply chain: key enablers - Connected Corners

Supporting the ongoing smart supply chain & logistics transformation efforts are a set of interrelated digital & connected tech enablers that in various permutations help businesses reduce costs, improve CX and increase productivity amongst other goals

These connected & digital enablers typically have their own unique innovation & improvement roadmap as well as associated trends (technology, industry, et al.) that may/not be specific to the supply chain & logistics segments they support

Integrating these technologies creates a level of ‘smarter’ supply chain ecosystemassets, operations, platforms, logistics & communications -…

…which; in turn unlocks the potential to address a range of inherent challenges & emerging opportunities; including product traceability, process transparency, real-time recommendation engines, AI-driven warehouse automation and much more [discussed in a separate topic]

So…

The broader supply chain & logistics function will continue to remain amongst the most critical functions for a broad set of industries and is continuously evolving at a global, regional, industry and business level…

supported by advancements in myriad of digital, cloud & IoT tech that is making existing supply chain assets ‘smarter’ (IoT), introducing product traceability programs (blockchain), creating an always-on insights platform (cloud) and everything in between

Various permutations of tech is also enabling ‘SCO of tomorrow’ to become more scalable & modular in nature; thereby also opening up growth opportunities for myriad of SCaaS providers

In an ongoing effort to optimize &/transform their SCO/SCM functions; businesses would also need to address a range of related challenges… either in-house, outsourced or via industry partnerships

Forthcoming topics will aim to explore key evolving supply chain & logistics trends as well as key supporting tech enablers in further detail; including various opportunities & challenges presented within

Stay tuned!