From expedited transportation services to shipping technology integration, 2019 is shaping up to be a year in which shippers evolve to meet the growing demands of both B2B and B2C sales. To help transportation managers cope with the changing appetites of a growing demographic we'll take a look at some developing supply chain trends in 2019.

Warehouses and distribution centers around the world are coping with massive change and investment to stay competitive. Challenged by the demands of e-commerce and omni-channel fulfillment, smaller orders, ever-shrinking delivery timeframes, and a persistent labor shortage, operations are in perpetual need of tools that can help them tackle these and other ongoing productivity issues. Technology is the driving force in the warehouse and DC transformation. With automation, robotics, artificial intelligence and other advanced technologies making their way into the world’s distribution facilities, the warehouse management system has become a vital component to manage the increased amount of information. And because it collects valuable information along the way, WMS also provides actionable data analytics that companies can use for good decision-making.

Let's take a look at some industry trends for 2019.

Software and Equipment Vendors Offer Creative Financing

In an effort to convince warehouse and DC managers to take the next leap in automation implementation, equipment suppliers are coming up with creative finance plans to make it easier to upgrade. One approach that more companies are adopting is that assets can be rented versus purchased or leased. In other instances, the WMS vendors which sell the systems that run the automated equipment are now working more closely with their end users to help make it more affordable for a wider swath of customers.

A Focus On a more User Friendly WMS Interface

Perhaps the biggest turn off to any computer program is a complicated user interface.  Logistics managers don’t have the time to sift through reams of data to find what they’re looking for. Pertinent data needs to be a mouse click away. WMS vendors are focusing on their user interfaces and coming up with ways to present data in a more logical format to users. The focus is on making systems more engaging and easier to use, and particularly in a same-day-shipping environment, where a field service technician or retail clerk can use the system with little or no training.

More Improved Inventory Return System

In the online ordering world returns are a major line item in the profit and loss statement. Managing those returns more accurately will mitigate the return allowance figure in the financial statements. Returns management systems have made a sizable impact on the distribution environment, and are pushing technology vendors to add better precision management capabilities into their systems. Companies have to be able to manage precision, while more economically managing individual items. While WMS systems certainly help companies pick, pack, and stage, they are also inventory systems. As items get returned, shippers need to be able to return those goods to either inventory, vendor, wholesale or scrap to accurately determine their value.

These are just a few trends to watch for in 2019. Form more information on how technology can benefit your organization contact us today.

The right pricing strategy is a critical component that companies can’t afford to overlook and is one of the most important aspects of maintaining profitability. In the manufacturer-distributor-customer value chain, one of the manufacturers most pressing challenges is being able to mark up prices in a way that helps maintain profitability while not pricing that customer out of the market. This balance is getting harder to achieve in the current B2B business environment, where the next competitor, price comparison or huge online retailer is literally one mouse click or screen tap away. 

Focused on serving their customers while maintaining healthy profit margins, manufacturers have to effectively balance the cost of manufacturing with the company's profit goals.  Goals that are hard to attain if the company isn’t using solid pricing strategies.

Integrating Data Your Pricing Strategy

As data continues to proliferate right along with the number of technology tools to help harness that data, companies are learning how to leverage that information across multiple departments for maximum success. Accurate data can more precisely reflect the cost of manufacturing by considering critical issues such as seasonal raw materials fluctuations, capital equipment depreciation and labor concerns.  Manufacturers should be generating these cost equations on a monthly basis to forecast cost fluctuations and react in plenty of time to adjust pricing. 

Gain an Edge on the Competition

Even those manufacturers that think they have the pricing game under control will surely face a new competitor, get hit with a new market trend or face another economic challenge in the near future. Look what Uber did to the taxi business.  Manufacturers of the future will also understand that effectively engaging customers requires true innovation in executing the value chain. Traditional approaches to inventory, logistics, pricing and rebates will be reimagined through the application of advanced analytics and technology innovations.  Given the importance of data, analytics and technology to both engaging customers and executing the value chain manufacturers will also need to leverage IT to truly energize, not just enable, their business. 

Data management is central to keeping track of your costs throughout the manufacturing process. If data is properly recorded and accessible to every link in the chain, managers can touch base with their product at every stage, helping maximize efficiency, address problems quickly, and improve customer satisfaction.

Additive manufacturing is a process of making three dimensional solid objects from a digital file. Unlike printing a flat picture for example on a piece of paper, a 3D printer actually builds something in 3 dimensions. So to call it printing is a bit misleading. The device builds upward and outward with each progressive layer of material. The creation of a 3D printed object is achieved using additive processes. In an additive process, an object is created by laying down successive layers of material until the object is created in three dimensions. Each of these layers can be seen as a thinly sliced horizontal cross-section of the eventual object. 3D printing enables you to produce complex, functional, shapes using less material than traditional manufacturing methods. The number of production-ready additive manufacturing platforms that ship each year will increase more than 10 times by 2030, as the technology’s use in structural and mission-critical commercial applications comes to fruition.

According to a new report published by ABI Research, a market-foresight advisory firm, these systems will produce more than $360 billion worth of parts and end products each year and nearly $2 trillion in sum by the end of the next decade.

Markets For Additive Manufacturing

There is so much fascinating technology around us today. Everyone wants to believe the next one will be a game changer. The major interest in this particular technology is the potential of additive manufacturing to do much of a company's own manufacturing rather than engaging in trade to buy products from other sources. 3D printers capable of creating just about anything in color and multiple materials already exist and will continue to improve to a point where functional products will be able to be created. The automotive industry represents the largest opportunity globally with $148 billion in additive manufacturing product value forecast for 2030, but it is closely followed by the machinery markets, and these figures differ from country to country. The United States currently leads the world in terms of AM product value but will be passed by China in 2029 under present conditions. Additive manufacturing brings production closer to the places where products are sold and used. For suppliers, this means the ability to better dictate the priority, timeliness, and process that best fits their manufacturing needs. 3D printing has the potential to change the manufacturing world as we know it.

Additive Manufacturing Will Likely Affect The Global Supply Chain

This technology has the potential of transforming our global supply chain in a very profound way. How profoundly, at this point, is very unclear. Any supply chain begins with a manufacturing point. Then warehousing, inventory management and, of course, transportation arrangements. Now AM technology allows us to reduce manufacturing lead times, as well as transportation costs, and also reduce the carbon footprint associated with production and distribution. AM shouldn’t be thought of purely for manufacturing since it could have much broader supply chain implications. The original applications were originally used for printing small numbers of simple objects made of one or two materials but that's rapidly changing. Its most promising initial contribution may come in a couple of basic areas.

Manufacturing Customization

Though mass customization, creating products that fit perfectly with the desires of one customer, is a very hot topic and trend, all of these elements represent a cost and quite an effort. This means you need to make sure it is right for your application and industry, and that the added value for your customer matches your effort. Manufacturing lead times and transportation cost savings can be erased quickly with inaccurate customer data requirements. Simple examples of this mass customization may be common consumer products like earphone buds, cell phone cases or sunglasses.

Spare Or Replacement Parts Market

Another significant advantage to 3-D printing is the replacement or spare parts industry. When the Maytag man, or whomever, shows up to repair your home appliance there is no need for inventory in his truck. Just a 3-D printer and some software. The same argument can be made for just about any similar service type industry.

What's Ahead

AM technology still has some obstacles to deal with. There are implications for the digital supply chain to go along with the physical one since the intellectual property resides in the file from which the object is printed rather than the product itself. Therefore security will be an issue in handling and shipping these types of assets.

This means that in the future, we’ll need to really examine this data chain to ensure that the information it contains is securely transported and managed. This is where technology like blockchain would likely be useful. This is a great growth opportunity for the global logistics supply chain industry. This is also where the digital supply chain technology comes in. To stay current on these technologies and more, subscribe to our blog www.Land-Link.com.

Digital technologies like the Internet of Things (IoT) are driving transformation across the entire manufacturing process by disrupting all aspects of production, from research and development to engineering and design, factory operations, and sales and support. Ultimately these technologies will increase efficiency in the manufacturing process, reduce costs and reduce the product time to market.

A new generation of shopping options through e-Commerce and m-Commerce (mobile commerce) has made supply chain management a vital area of concern for many businesses. It is particularly critical for manufacturing companies, which are heavily dependent on the supply chain partners to deliver their products. With an increasing emphasis on technological advancements, as well as the changes in customer expectations, the need for integrated supply management has become increasingly important. In the retail environment particularly, where the margins are thin, technology is the key component between profit and loss. And in this market, the sharks are circling.

Wal-Mart Is Making Hi-Tech Moves

This July, a Walmart supply chain first is coming to Colton, California. A newly built, 340,000-square-foot high-tech consolidation center will be the first in Walmart’s supply chain to receive, sort and ship freight. This automated technology will enable three times more volume to flow throughout the center and helps Walmart deliver the right product to the right store, so customers can find the products they need.

Amazon Started This Fight

Back in 2005, Amazon launched its Amazon Prime service. Customers, paying an annual membership fee, received guaranteed two-day shipping on hundreds of thousands of products. In fact, the introduction of two-day delivery was the game changer and established the dominance of Amazon in the online retail industry. When many other retailers started to catch up with that strategy by offering their own free two-day shipping, Amazon tipped the playing surface by offering a one-hour delivery with its Amazon Prime Now service. The fight now seems who can deliver product faster. The rub, however, is it has to be done at a profit.

The Latest Wal-Mart Approach

A massive Walmart-owned center, which will open in July with 150 full-time associates, can move three times as many cases. It will grow to employ more than 600 associates by 2021. With the combined might of people and world-class logistic technology, this facility will be the most efficient consolidation center in Walmart’s supply chain. Walmart continues to expand its portfolio of high-tech distribution centers. In October, Walmart announced that it had broken ground on a tech-enabled perishable grocery distribution center in Shafter, California.

Amazon Sets The Pace

I have to recuse myself of my opinion to some degree since Philadelphia was in the running for an Amazon Distribution Center Headquarters. Sadly, we didn't make the cut. There is one thing I have to admire about Amazon. Management may have adopted the Bill Bellecheck game plan of logistics protocol. They seem to have designed the playbook of online retail from order to fulfillment to the final mile. When Amazon made its official selection for the locations of its second headquarters, it was hardly a surprise to anyone following the lengthy HQ2 saga. But tucked into the announcement were tidbits we didn’t know, including information on what it took for the two sites to win out over the dozens of other bids.

How To Keep Up With The Competition

Target is lagging a distant third in the giant race for a retail giant of the world. The only strategy for small to mid-size retailers to break into this market is to be lean. Operational efficiencies will be crucial for anyone to be competitive. To keep up with your competition subscribe to our blog, or better yet, join the Land-Link.com client family and let us show you what a lean supply chain looks like.

Supply chain protocols worldwide are being transformed. External pressures, technology trends and internal evolution are prompting companies to reevaluate their network to determine how their future supply chain should be structured, both in terms of capacity and capabilities. Let’s look at the four main areas of transformation potentially impacting your supply chain.

Emerging Technologies: Drones, autonomous intelligence and robotic automation will eventually transform warehousing and transportation, which will create networks that may look and operate very differently from those of today. Technology-driven Supply Chain protocols will dominate logistics in the coming years.

Supply Chain Visibility: The Internet of Things, Big Data and data transparency will improve an organizations’ ability to gain visibility on the real-time status of their supply chain network, thus giving them the ability to not only rapidly respond to problems but more importantly, anticipate and prevent them more effectively. Data abundance will be used to draw insights on both short-term and long-term improvements to the supply chain and beyond using statistical analysis.

Sharing Economy: On-demand warehousing and on-demand logistics will allow organizations to be more flexible in how they operate their supply chain. Lower capital expenditure and higher adaptability will likely be attractive for organizations that are in rapidly evolving industries. In 2014 the size of the shared economy was estimated to be 14 billion dollars. By 2025 it is estimated to grow to 335 billion.

Measure The Potential Impact On the Existing Supply Chain
With these broad trends in mind, organizations must constantly track select metrics like warehouse utilization levels, actual customer service level, cost to serve/profitability of product categories, and use of stop-gap measures to determine if there is an ongoing impact on revenue growth and operating margin. We must carefully consider the factors impacting a supply chain design. Examining the external trends, measuring key supply chain metrics and evaluating the network against the business strategy, usually determines that the supply chain requires some or even major overhaul. This is precisely where a qualified 3PL can provide expertise in data analysis and supply chain design. Land Link is expertly qualified to compile and evaluate key metrics in your supply chain performance and determine to what extent these emerging technologies may improve your existing supply chain protocols. Contact us for more information. 

Automating simple, routine processes frees up workers for other tasks and reduces human error. A common reaction to the increase of automation is the fear of being replaced—but a more optimistic outlook sees robots enhancing human productivity through collaboration, rather than outright replacement.

Skilled workers are in high demand, so it’s important to make the most of the talent you have. Why waste an experienced employee’s valuable time hunting for tools or checking inventory?
ROBi, which stands for Robotically Optimized and Balanced inventory, aims to solve this problem by automating inventory and routine cycle counts to save time and enhance accuracy in automotive manufacturing and warehouse environments.

Uber Corp continues to operate at a loss. The company lost $4.5 billion in 2017, up from $2.8 billion the year before. Uber reported a loss of $1.1 billion in the fourth quarter on revenues of $2.2 billion. Uber freight has yet to turn a profit. Their parcel division, Uber Rush, is rumored to close in June. The driverless truck division has suspended testing. According to Eric Meyhofer, Head of Uber Advanced Technologies Group, “We’ve decided to stop development on our self-driving truck program and move forward exclusively with cars." Meanwhile, Uber's head of freight trucking, Lior Ron, who was also working on autonomous-vehicle technology, is leaving the company.

Uber freight is facing the same challenges as established freight brokers; driver availability. Equipment demand is at historic highs. Carriers and owner operators are able to maximize their revenue in this tight market. Responsible shippers are compelled to stay with established carriers and pay higher rates than chance their freight and brand equity riding with an unknown and unproven carrier. The Uber platform is little more than a bidding platform with shipments going to the lowest bidder. Uber freight would be a useful option for carriers shipping low value, durable freight, with little concern about brand equity. There is little history provided to shippers for Uber freight drivers other than insurance and authority. And it's unclear how much vetting is done on the carriers or owner operator. Uber shippers are trading off higher risk for lower freight rates. Most responsible shippers cannot afford to take this level of risk with their products and associated liability.

Uber may be concentrating on its main business; passenger transportation. Uber has decided to redeploy the engineering teams involved in the self-driving truck project to work inside of Uber's autonomous passenger car business. This shouldn't be a shock. Uber is the dominant leader in the on-demand passenger market and not a huge player in the trucking freight market. With Uber planning one of the largest tech IPOs since Facebook, they must have a compelling story to tell investors about how they plan to maintain their position in the passenger vehicle segment and not be lapped by other players with more compelling technology.

Uber's track record in the autonomous passenger segment is not stellar. They have higher incident rates than other companies, measured in Miles per Intervention. Miles per Intervention is a stat published by Pitchbook showing how often autonomous vehicle's computers require a human to take over. Uber ranks far behind Waymo and Cruise. Waymo is best-in-class with 5,600 miles per intervention. Uber is just 13 miles per intervention. GM's Cruise has better stats, with 1,250 miles per intervention, nearly 100x better than Uber.

Without perfecting or at least improving self driving technology Uber's entire market share is at stake.

For the latest Logistics and Transportation technology news, subscribe to our blog http://www.Land-Link.com/blog.

Our industry is solidly in the realm of "Big Data". Big data is like any other data except there are massive amounts of it available from which your transportation providers estimate your overall value as a customer. Data analytics and predictive analysis have become the leading indicators of a company's future business levels. If your organization is not utilizing these tools to predict future needs you may be leaving leveraging power at the bargaining table.

Data Analytics And Predictive Analysis

Data Analytics is not overly complicated. It is the science of interpreting historical data to predict some future utilization. This can be applied to expected manufacturing level, raw materials needs, inventory, and shipping. The application of this data is known as predictive analysis. Predicting the future needs of a company based on historical data coupled with expected future analytics such as increased sales volume or raw materials expense. The critical components of this science are the accuracy of the initial data input and the accurate category of data. Garbage in will give you garbage out and unnecessary data will compromise the utility of your output. So if you want to predict future operating costs be sure to include only financially relevant data. If you want more of a
CRM analysis, be sure to input customer specific data. Be certain of what data you want at the end before you begin.

Maximizing Your Profile Data

Other people have your data as well and are utilizing it to their full advantage. Your vendors and suppliers all have your historical data. Be assured they are using data analytics and predictive analysis to maximize their position every year. Your organization needs to be armed with a similar ordinance to leverage your position. For our purposes, we'll concentrate on your carrier profile data. The volume of data available here can be daunting, especially if you imagine collecting it all in real time. That’s why your first step should be figuring out what question you want to answer. Do you want to understand how winter weather affected your holiday shipping last year? Do you think you can make transit more efficient? Further, big data draws links between all aspects of your supply chain from your supplier to your inventory on hand, to your warehouses to your customers. This information can remind you when it’s time to order more replacement inventory because your stock is running low. It can reveal not only which of your vendors missed shipments, but also which manufacturers’ products got the best customer reviews.

A data analyst looks at information with a totally different perspective than a supply chain manager. Reviewing numbers or other types of information if you’re working with big data, can reveal inefficiencies you’d never noticed. It can identify inefficiencies in routings and contractual agreements that may be renegotiated. The million dollar question is how are you going to get this done within your organization on a timely basis. Clearly, it would take years and the establishment of Data Analytic department to compile and manage this data in house. The rate at which our industry has adopted data analytics simply won't allow you that much time. Not initially anyway and it may be cost prohibitive in the long term. The obvious answer is to outsource your data analytics. As far as your carrier profile is concerned Land Link Traffic Systems has been utilizing data analytics for years. Long ago the founder of Land-Link Traffic Systems Inc. stressed the following. “What does not get measured, does not get fixed”. It would be difficult if not impossible for any rational person to repudiate this thought-provoking statement and important underlying principle of business. Yet, many companies to do just that. Most companies, in fact, do not have the proper measurements and KPIs in place necessary to drive intelligent business decisions and to serve as support to the policies that are relied upon to drive day to day business activities. Visit us today for specific information on our data analytics approach.

Author
Michael Gaughan
Technology Officer
Land Link Traffic Systems