Top Supply Chain Trends in 2016 – Part I

Top Supply Chain Trends in 2016 – Part I

Top Supply Chain Trends in 2016 - Part I

Welcome back for the 2016 edition of Blue Horseshoe’s Top Supply Chain Trends. In 2015, we made bold predictions, not only about technology, but also the changing supply chain services industry. Click Here to read our 2015 Predictions.

If you read our end-of-year review, you will find that what we foresaw a year ago emerged as major topics talked about in the supply chain news. We have no doubt that our 2016 trends will be the most talked about topics in logistics and supply chain management.

Before we jump into the list, we want to take a moment to tell you about one “mega-trend” that will move the conversation forward in the next year: The digital transformation of the supply chain.

Blue Horseshoe is on the cutting edge of leading this digital transition for our partners. While other consulting firms like to talk about Digital Enterprises, we give our clients real tools, services, and advice that they need to make digital strategy a reality. Let us help you transform your business in 2016 as we explore the top trends.

So how do you take this concept of the Digital Supply Chain and apply it to your business? Look at the trends for 2016 below and think about how you can respond to the trends of the year.

 

  1. Augmented Warehousing

Augmented Warehousing - Outside the Warehouse WallsThe role of the warehouse in the supply chain has gone through many changes, from historic roots in European shipping and trade routes to their modern day uses as distribution centers – vital parts of the overall supply chain of a company.

Particularly in just the past 10 years, what was once seen as a buffer against supply disruptions, has become the hub of the distribution network for digital organizations. The first transformation was from storage of bulk inventory, to providing order fulfillment from the warehouses. Now with the benefits of Omni-Channel Fulfillment, we see a need to augment the warehouse with inventory across many distribution channels.

What this means is that we can augment the warehouse with inventory stored at suppliers, in transit, and at the stores. As a customer places orders, the inventory is then routed to the delivery point of the customer’s choosing.

When done right, augmented warehousing can decrease delivery time, reduce inventory cost, and reduce shipping expenses for a company.

 

  1. Cognitive Computing

We have talked a lot about Big Data in the last few yearly trends articles. We are not going to do that this year. Why? Because, now that we have all our data accessible, we have to put it to good use.

What is Cognitive Computing?

Cognitive Computing uses statistical and analytical tools – similar to how humans process information – to provide insight into our massive stores of data. Examples of this would include Microsoft’s Azure Machine Learning and IBM’s Watson.

If you haven’t thought about how cognitive computing will change your business, you are falling behind the curve. Across all data-driven industries, companies are utilizing cognitive computing engines to provide insight and predication into user trends, sales patterns, and assigning risk.

 

  1. ‘IoT’

Internet of Things IOTAnother key piece of the digital transformation of companies is IoT, or the “Internet of Things.” IoT is the networking of different devices to provide real time information on machines, people, and goods.

For example, let’s say you are a company that packages and sells Spring Mix lettuces. Utilizing IoT devices, you can see moisture levels at the farm, track the rate of harvest, track the temperature of product in trucks, and even watch the rate of sale of products at stores.

This ability to more effectively track and move products is particularly of key importance to those in the food and beverage industry. In fact, Blue Horseshoe was proud to be listed this past year in Food Logistics, the only publication dedicated exclusively to the global food and beverage supply chain, which put us on the 12th annual FL100+ list – in honor of our work in improving the global food supply by increasing visibility and efficiency through innovative software solutions for the industry.

But no matter what industry you are working in, utilizing IoT with Cognitive Computing helps you develop analysis and models that will give you increased visibility and traceability to the supply chain. It will also allow for rapid risk assessment and quicker responses to changes in demand.

 

  1. Continued Rise in Automation

Now that Tesla has given us cars that can almost drive themselves, we should be demanding warehouse equipment that is autonomous as well. In the coming year, we are looking for the talk of automation to get off of the roads and into the rack.

While self-driving equipment has been in use for many years, it has not seen common adoption across the supply chain. Our research indicates that this has to do with labor rates. For over 15 years, the cost of automated systems has not been viable for a lot of companies.

But that is changing, thanks to a drop in labor participation and increasing labor costs, factors leading to a new economic viability of automated systems. We are now seeing automated systems starting to compete with manual labor in more markets. This change is going to be a major driver in the adoption of automation in the coming year.

How effective will this change be?

We are seeing a trend that indicates the amount of work handled by automated systems – including automated material handling equipment and picking robotics – have been shown to automate over 70 percent of picks in some environments.

 

  1. Cloud First

Cloud FirstWith the release of AX 7 on the horizon, the future of ERP systems is here and it is making a true, “Cloud First” mentality a reality. Along with AX, many other supply chain systems and software are taking a cloud centric approach. This includes many of Microsoft’s analytical services.

As our devices get smaller and distributed across the supply chain, understanding the landscape of the cloud computing systems will become more important as many of the major software providers will work to become a one stop shop for business software solutions. Utilizing a trusted partner to navigate this often confusing set of services will be a priority for IT professionals in the coming year.

This concludes Part I of our Top Supply Chain Trends of 2016. Coming up next week, Part II of our trends list.

 

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Additional Articles:
2016 Supply Chain Trends:
Top Supply Chain Trends 2016 – Part II

2015 Supply Chain Trends REVIEW
2015 Supply Chain Trends – In Review

 

 

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