The overall outlook for supply chains in 2017 is quite rosy, but let’s identify some specific areas where the industry could or should be headed this year.
Staying the Course
First and foremost, I suspect that we won’t see any significant technological breakthroughs or paradigm shifts in 2017 that will disrupt current best practices in the supply chain. Instead, I’m certain that we’ll see a steady stream of developments that continue to improve existing efficiencies or reduce costs, in addition to a widespread push for vendors to demonstrate added value.
Consumer demands continue to drive technology adoption
E-commerce and the omni-channel experience will continue to capture buyer mindshare over more traditional brick-and-mortar retail models, which are suffering from over-capacity. We can expect long-term customer loyalty to be driven by the so-called unified experience or continuity of experience. Vendors able to consistently deliver perfect shipments will be able to capitalize on this trend. For companies in supply chain logistics, this will require ever-tighter carrier relationships and technologies, which will eventually include the emergence of autonomous commercial freight deliveries. These companies are also likely to deploy GPS-enabled tools that provide up-to-the-minute information about freight location, en route conditions (like temperature), and arrival time estimates.
3PL vendors benefit
These trends may help 3rd Party Logistics (3PL) providers gain significant market share, but may also force some industry consolidation. One differentiating factor will be analytics, and how data can be used to capture pick, pack and ship costs. There is a cost associated with managing warehousing and logistics internally versus outsourcing, so the ability of a company to evaluate the overhead for storing and retrieving inventory efficiently and accurately will remain key in delivering shipments profitably.
Hype, with a grain of salt
While autonomous vehicles and drones are certainly breakthrough technologies, numerous barriers need to be overcome before these become mainstream. These include regulations around safety (or perceived danger) and privacy, as they attempt to coexist with traditional modes of transportation. It is my view that the use of drones for shipping will be confined to very short-range hovers or stops based on battery limitations, FAA altitude restrictions, drone pilot certification and autonomous flight technologies, and clearances limited to line-of-sight flying.
Whatever 2017 brings, it is shaping up to be a busy, productive year in the world of logistics and supply chains. The more things change, the more they stay the same.
About the author
Eric Allais, President and CEO of Washington-based PathGuide Technologies, Inc., has over 30 years of experience in marketing, product management and sector analysis in the automated data collection industry, including warehouse management practices in wholesale distribution.