Supply Chain Trends in 2019

August 20, 2019

The operations of supply chains are constantly evolving. With changing customer needs and expectations, the introduction of new innovative technology, and a competitive marketplace, supply chain management teams need to adapt quickly and make smart decisions. Companies are taking note of these needs, and as a result, certain noticeable trends are emerging across supply chains. The following are some of the top supply chain trends of 2019 that will continue to evolve in the years to come.

Continued Implementation of Innovative Technology

Complex supply chain networks and higher customer demands and expectations mean that technology needs to continue growing and improving. For businesses to stay competitive in their industry, they need to stay on top of the best of the best supply chain technologies. One of the most significant supply chain trends in 2019 is the continued adoption of innovative technology. Some of the most notable technologies include:

Hands-Free Wearable Devices: Wearable devices are much more commonplace than the older handheld scanners, which can slow down processes in the warehouse. These devices help employees collect data in real time, helping businesses stay in-the-know about what is in stock, what needs to be replenished, and what products are popular. They can also help employees access data more quickly. Some of these technologies include wrist-mounted RF scanners, voice picking systems, and pick-to-light order fulfillment systems.

Artificial Intelligence: One of the top supply chain trends is the use of artificial intelligence. Artificial intelligence can help maximize employees’ time and boost productivity. Some artificial intelligence used in the supply chain include gesture recognition systems and even self-driving cars.

Warehouse Control Systems and Warehouse Execution Systems: Warehouse management systems (WMS) don’t provide the full range of services needed for the modern, more complex warehouses. In order to better manage operations and handle logistics, many warehouse management teams are choosing to supplement that older system with warehouse control systems (WCS), as well as warehouse execution systems (WES).

Increased Supply Chain Visibility

A top supply chain trend is the increased ability to see a clear picture of all that is happening across all sectors of the supply chain. New technology in many cases means improved data collection. Along with a wider-scope of data collection comes a clearer look at all components of the supply chain. With these new technologies, the management team is better able to see what is happening in the supply chain in real-time. That means they can react to issues much faster, and stop problems in their tracks. Additionally, this data will help management better manage and improve operations along the entire supply chain.

Labor Shortages

Of course, there are some negative supply chain trends in 2019 that management teams need to be aware of in order to fully prepare for employment needs. The Conference Board (a non-profit that researches trends and data in the American workforce) reported that blue-collar labor numbers are expected to continue decreasing in 2019 and the years to follow. Warehouses are particularly hit by this labor shortage, as well as the transportation sector. While automation is helping companies bridge this gap, managers are still finding it hard to fully meet the needs of the increasing demands within their supply chains.

Outsourcing Segments of the Supply Chain

One of the big supply chain trends in 2019 is the outsourcing of certain parts of the supply chain. This helps companies harness their strengths along the supply chain, while getting the best possible results in areas where they are not as successful. It can also lift certain financial burdens. Of course, by outsourcing certain components, there are unique requirements and needs that need to be more closely monitored by the management team. Since they will no longer have on-site control of the segment they are outsourcing, they will have to put practices in place to monitor and track progress in these areas. They will also need to ensure information is being shared with these segments as often and as quickly as it is being shared with in-house operations. A problem in one of the outsourced segments can cause major delays across the supply chain, so it is vital that it stays functioning at its optimal level.

Evolution of Customer Expectations

Customers shop differently than they did a few years ago. Far more companies are now shipping direct-to-customer, and low-cost or free shipping (at faster than ever speeds) are now commonplace in the average consumer’s shopping experience. This means that, in order to stay competitive, supply chains need to have capabilities that allow them to meet the expectations of their customers. Warehouses and transportation operations need to stay flexible in order to stay up-to-date with the evolving standards of the modern customer.

Moving Supply Chain Nodes Closer to Customers

In order to keep up with the evolution of consumers, many companies are choosing to move their supply chain nodes closer to their customers. This supply chain trend is largely due to the need to provide fast but low-cost shipping options to customers. Companies are creating more fulfillment centers that are smaller in scale, and bringing them physically closer to their customers. While this means that product can get to customers faster, it also presents certain challenges. Companies need to better forecast what product needs to be stored in certain fulfillment centers and how much, particularly since they’ll be dealing with less storage space. Thankfully, with the emergence of new technology and software, companies are better able to handle these modern challenges.

Increased Competition Directly Affecting the Supply Chain

Customers have access to just about any product they need right at their fingertips—and they have their pick of options. In order to stand out amongst the (very crowded) crowd, companies need to find ways to stay attractive to customers. For many companies in 2019, this means looking at the different functions of the supply chain and rearranging operations as needed. One of the major supply chain trends that has emerged as a result of this increased competition is the reduction of costs along the supply chain. This could mean strategizing sourcing and procurement, improving the management of product in warehouses, or making changes to transportation operations. This reduction in costs along the supply chain means that companies can provide product at more competitive prices.

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