Supply chain issues continue to create problems for industry with cost and demand uncertainty adding to operational challenges. Efficiency and visibility are the main themes of supply chain in 2023 and top of the wish list for shippers and providers, according to a new survey.
Supply chain elements including optimisation of packaging, transportation equipment, mode, traceability and routing will all play a key role in equipping shippers and providers with the most granular actionable insights, according to a new survey by shipping specialist WARP.
With increased consolidation in the fulfilment market, regional and specialty 3PLs will begin to specialise further and find unique value props that allow them to compete against larger competitors. The rise of ‘asset light’ fulfilment will give way to interconnected fulfilment and distribution networks, lessening the asset intensive burden of bringing new facilities online with scale.
As supply chains move into the cloud, one of the most talked about concepts is ‘connected supply chains/connected systems’. While structures such as EDI and API have long stood as the pillars of information transfer in the industry, we’ll see a further marriage of data inputs/outputs as the number of systems and complexity of systems increases.
The national carriers’ ‘Hub and Spoke’ model has led to steep rate increases, damaged shipments and delayed on time delivery rates. As a result, more shippers will inject into sortation centres closer to their end customers, removing the traditional costs and constraints of national carriers’ middle mile networks. As shippers explore their key market areas more emphasis will be placed on cost and risk management especially through last mile plus middle mile carrier diversification.
No one provider is a silver bullet for all package types. By using a wider array of last mile providers, shippers will have greater flexibility to split volume dynamically based on size, cost, and speed of delivery. This is only made possible with increased visibility and performance in LTL + FTL middle freight providers.
SKU velocity, channel velocity, proximity to point of production/manufacture, and customer density will see more informed decisions being made on regional and local inventory placement. Whether for cost or transit time, balancing of inventory control with inventory location will become increasingly important.
While the ‘Amazon effect’ has the supply chain world buzzing with two-day delivery there are other more important reasons to place inventory closer to end consumers. Extreme weather, pandemic, geopolitical uncertainty and other factors are leading to a growth in localisation of supply chains to hedge against uncertainty, even more so than decreasing time in transit.
With the advent of programs like OpenAI and its ChatGPT tool, as well as blockchain and other protocols, we will continue to see the rise of admin/baseline task automation throughout the supply chain. The typical mix of EDI, API, webhooks, etc, will continue to be consolidated under common protocols that improve the universality of communications within the supply chain industry.