The COVID-19 pandemic brought about many changes, some of which were more unexpected than others. Anyone with a stake in the logistics industry saw unprecedented supply chain shortages and disruptions that impacted everyone. Materials foundered in warehouses with no one to transport them to factories for manufacturing. Completed products collected dust because no drivers were available to carry them to their final destination. It even threw a wrench in Christmas 2021, making it harder for consumers to get their hands on artificial trees.
Some of these issues have begun to fade, but there are still challenges facing the supply chain industry. How can investing in new supply chain technologies give companies a competitive edge?
The Last Mile Is Evolving
While 2020 wasn’t the first year where e-commerce and online orders started to take precedence over physical storefronts, adding a global pandemic to the mix made having that option more essential. It allowed people to stay home as much as possible while still ensuring they had everything they needed or wanted throughout the lockdowns. Consumers have grown accustomed to fast delivery, but their definition of fast is different from what most might typically find in the logistics industry.
One recent survey found that 96% of consumers equate “fast” delivery with “same-day” delivery. Barely half of the retailers offer that delivery option, but that consumer definition means it is essential to shorten the amount of time those last-mile deliveries take. Supply chain innovations and new technologies can help bridge the gap between what the consumer perceives as fast and the reality that defines the logistics industry as it currently stands.
Artificial Intelligence (AI) Is Making Its Mark
The logistics industry as a whole generates massive amounts of data every single day. Supply chain data, consumer information, manufacturing details, and everything in between gets collected and stored. This data is often stored where companies can access it, but it’s usually just a mish-mash of numbers in its raw form. Making sense of that information is often beyond what even the most skilled business owner can manage – at least on their own.
Experts anticipated that more than half of companies in the supply chain industry were planning to begin investing in artificial intelligence systems for their companies by the end of 2021. This is a 15% increase year-over-year for this industry alone. In the long run, AI will likely add trillions in value to the industry in the coming years. This trend is picking up speed, but there is still plenty of time for existing companies to get in on the ground floor and adopt it before it transitions from niche to necessity.
Changing Best Practices With Robotics and Automation
Robotics and automation is a field that often earns a lot of negative attention and press because of its threat to human jobs. People are afraid that robots will steal jobs, and this sort of hidebound attitude has often led to industries that are otherwise on the cutting edge of their field shunning advances. In supply chain operations, experts expect robotics and automation to grow steadily over the next five years, especially in any situation where a robot can take over a dangerous or high-risk task.
Introducing robotics and automation can help companies overcome existing problems, especially regarding functionality and fulfillment. Warehouses that still rely on manual picking methods aren’t going to keep up with the growing demand when competing against companies that have already purchased and implemented automated picking systems.
Removing Humans From Some Equations
A lack of skilled workers, especially in the trucking industry, has presented a unique challenge for those working with supply chains. Having all the materials in the world doesn’t mean much when no one is available to haul those materials from warehouse to factory or from factory to consumer. There was a shortage of 80,000 truck drivers by the end of 2021, and experts estimate that will double by 2030.
The technology is almost ready for self-driving trucks that could help offset this growing labor shortage. They will never fully replace the need for human drivers, but they could help fill in the gaps while the trucking industry makes the necessary changes to rebuild its ranks. The demand for skilled drivers will never disappear, especially when the weather turns sour. Still, these self-driving alternatives could help ensure materials and finished products promptly reach their destinations.
Warehouse Optimization Is Key
Warehouse layout options haven’t changed much in the last few decades, but change is a necessity if companies are hoping to keep up with the increased demand. Warehouse optimization is essential to manage the increasing number of orders. Often, something as simple as rearranging the inventory so the most frequently purchased items are closer to the picking and packing stations can help, but that isn’t always enough.
Warehouse management systems – software designed to sort through and manage all the data a warehouse produces – are one piece of the puzzle. These, when paired with the artificial intelligence and machine learning systems mentioned above, can create a network that will increase productivity and supply chain efficiency. Robotics and automation will also play a role, removing some of the human element, especially in regards to inventory management and picking orders. The goal here isn’t to eliminate human workers entirely, but to make their jobs easier through AI and other advanced supply chain technology so they can carry them out more efficiently.
Overcoming Supply Chain Challenges in the Future
No one could have anticipated the challenges that arose during the COVID-19 pandemic. Now, companies need to work to recover from those challenges and overcome any new problems that might occur in the future. New technologies can help give companies an edge in an already ultra-competitive industry. For those that haven’t already started considering these changes, now is a perfect time – the calm between storms – to begin researching how it could work for them.
The demand for e-commerce and the supply chains to support it isn’t going to go away anytime soon. Now is the time to start adopting these new technologies so companies can start getting ahead of the competition.