December 16, 2019
Column | outbound

Simon says

The past two decades have seen unprecedented changes and advances in logistics and supply chain management. But now what?

By Mitch Mac Donald

When the clock strikes midnight on the last day of this month, a full 20% of the 21st century will be in the rearview mirror. That's a mildly astounding realization for those of us who spent much of our lives thinking of the 21st century as some far-off time in the future.

But, in fact, it's been 20 years since Y2K came and went (and without any of the predicted IT meltdowns). In those 20 years, we've seen a host of changes—mainly techno-changes—that have altered our lives, to say nothing of the way we practice logistics and supply chain management. Consider that in 1999, the iPhone was still seven years away. Terms like big data, autonomous vehicles, and the Internet of Things (IoT) hadn't even entered the average businessperson's vocabulary.

So, what will the next two decades bring? What changes will we see, and how will they impact the way logistics gets done?

For answers to questions like that, we're forced to rely on guesses—preferably educated guesses made by people smarter than ourselves. People like Simon Ellis, program vice president, global supply chain strategies at IDC and a true supply chain big thinker. His take is that where the supply chain is concerned, a lot more technology-driven change lies ahead. "Digital transformation is now the overriding priority for most manufacturers and retailers, with the adoption of digital technologies aimed [at] improving efficiency and effectiveness ... while providing the opportunity to either disrupt their market segment or be resilient to others that may try," he notes.

As for what supply chain IT investments they'll make, Ellis offers the following 10 predictions for 2020 and beyond:

Prediction 1: By the end of 2021, half of all manufacturing supply chains will have invested in supply chain resiliency and artificial intelligence, resulting in productivity improvements of 15%.

Prediction 2: By 2022, firms will dedicate 35% of their logistics business process outsourcing services budget to process automation, focusing on order, inventory, and shipment tracking.

Prediction 3: By the end of 2020, half of all large manufacturers will have automated supplier and spend data analysis, resulting in a 15% procurement productivity gain.

Prediction 4: By 2023, supply chain micro-application extensions will account for one-third of all new technology investments in manufacturing and retail.

Prediction 5: By 2023, 65% of warehousing activities will use robots and situational data analytics to enable storage optimization, increasing capacity by over 20% and cutting work order processing time in half.

Prediction 6: To lessen stress on the service supply chain, by 2023, 25% of OEMs will leverage blockchain to source spare parts, improving accuracy of usable parts by 60% and lowering expedite costs by 45%.

Prediction 7: By 2023, 60% of G2000 manufacturers (those included in Forbes' "Global 2000" ranking of the world's largest public companies) will invest in AI (artificial intelligence)-infused robotic process automation to automate tasks through increased productivity and address the supply chain skills deficit.

Prediction 8: By 2024, 75% of all consumer-facing companies will have developed the ability to customize at scale within their supply chains, resulting in, on average, a 2 to 3 percentage point increase in market share.

Prediction 9: By 2022, the number of companies offering flexible warehousing options will have increased by 50%, which can help address seasonal demand challenges and lower fixed overhead costs by over 20%.

Prediction 10: By 2024, for transparency and efficiency, 40% of customs agencies will join private blockchain and API (application programming interface)-powered trade platform ecosystems to achieve a 50% increase in cross-border compliance.

Check back with us in 2039, and we'll see how Simon Ellis fared as a supply chain prognosticator!

About the Author

Mitch Mac Donald
Group Editorial Director
Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.

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