Another year, another roller coaster of threats and opportunities as it relates to exceeding the demand placed on companies’ supply chains. While some may tend to focus on the threats, amidst economic uncertainty and a more competitive landscape, it’s important to also focus on where opportunities exist to exceed the demands of customers.
Here are ten key logistics trends that will certainly drive many of the decisions organizations will make to improve their supply chains.
1. Contingency Planning
2012 saw continued supply chain disruptions due to manmade and environmental disasters. At the beginning of the year, automakers and computer manufactures saw supply disruptions continue from the 2011 Earthquake in Japan. As the year progressed, many were affected by the drought in the Midwest which started to hit commodity prices at the end of the year. Global operations were also affected by the power outages in India and unrest in Africa and the Middle East. As the year came to a close, the Northeastern US was hit by Hurricane Sandy, which knocked out the supply chain capabilities of many organizations. In 2013, companies need to take steps to prepare their supply chains for any number of contingencies that while unpredictable, can be mitigated with the right planning.
2. Workforce Management / Labor Planning
As the US economy slowly recovers from recession, several changes still remain for human capital within the supply chain. Hiring seems to be trending upward, but productivity per FTE is declining. The employment increase has been brought on by higher voluntary turnover, not new hires. Organizations that understand and adapt to this paradoxical environment will be best positioned for higher returns on their human capital investments
3. Logistics Clusters
A logistics cluster is a location that has political, environmental, or business factors that give companies an advantage when locating their operations there. While there is a lot of debate in the industry on exactly which cities contain these clusters, it is important that companies determine if locating in one of these clusters is right for their business.
There have been a number of articles that have pointed to the importance of logistics clusters when determining where to locate supply chain operations. This discussion will continue into 2013 as companies continue to invest in new facilities or move operations to locations that are better suited for their business.
4. Phased Expansion
As improvement in the economy affects labor market, it also affects how companies handle expansion of their operations in 2013. As companies look to expand their operations, they are looking for a clear approach to smart expansion. Gone are the days of, “If you build it they will come.” Companies are now taking a balanced approach to facility and network expansion.
There is a need in many companies to have someone look at their operations and determine the best approach to facility and network expansion. Due to still tight budgets in the coming year, a balanced analysis of returns over the next 3 to 5 years is seen as a smart plan for the coming year.
5. Network Optimization
As buying patterns for companies and consumers shift, many suppliers are not effectively optimized to handle changing markets. In past years, companies did not have the resources to invest in a full network analysis. As more manufacturing is being insourced to the United States and Europe, there is a need to evaluate current network operations and develop an optimal network strategy for the coming years. The end of 2012 saw many articles published on the topic of insourcing. This is seen to be a major topic of discussion in 2013 and will be an idea that many companies will need to look at in the coming year.
6. ERP Enhancements
Many companies have found their ERP (Enterprise Resource Planning) systems stretched to their limits as their businesses change and grow. Many systems installed 5 to 10 years ago do not have all of the functions needed to manage transportation, warehousing, or order management with the effectiveness of modern systems. As the economy improves in 2013, companies will look to replace or enhance their current systems with more effective modules or solutions.
7. WMS Upgrades
Believe it or not, many companies either do not have a functional WMS or have a WMS system that is unable to do tasks such as directed put away, zone picking, or interface with an ERP or TMS system. As companies look to upgrade their systems in 2013, WMS upgrades are ranking highly on many VP of Operations wish lists.
8. Advanced Analytics
Many companies are starting to use the massive amounts of data that their systems produce to get insights about their operations, customers, and employees. As companies invest in their systems to generate more data, there is a greater need than ever for someone to provide advanced analysis so that companies can get greater insight into their businesses.
2012 generated a lot of news about analytics, and 2013 should only continue that trend.
9. Supply Chain Transparency
Companies requiring greater transparency to their supply in order to meet increasing customer demand. With many retailers providing their customers with live inventory, consumers in all areas of business are demanding live visibility to all areas in the corporation. As markets remain uncertain in 2013, management also needs greater visibility to all areas of the supply chain so that business decisions can be made quickly.
10. Supply Chain Safety
Governments around the world are starting to promote rules and regulations to increase supply chain safety. In the US alone, new regulations are published almost daily that require businesses to increase the safety of the supply chain. 2012 also saw many disasters both manmade and natural that caused businesses to consider how to better improve the safety of their supply chain in the coming year.
Obviously, trends do not emerge on January 1 and end on December 31. Supply chain professionals need to consider various factors that may impact their supply chain. The ten trends outlined here may or may not be impacting the decisions you are trying to make as you prepare your supply chain for the future. Regardless of your situation, TransTech-A Blue Horseshoe company- can help evaluate and implement the solutions needed for a sustainable and profitable supply chain.