What are the 2019 Trends in Supply Chain and Logistics?

Understanding or being aware of the trends can better prepare businesses for the future. It’s especially the case in the supply chain and logistics industry and businesses that have such functions.

Out of over 2 million companies in Australia, more than 400,000 of them are small and medium-sized businesses that have supply chain and logistics functions. In other words, any changes in those areas could bring about massive adjustments in the entire business.

Entry of Amazon into the Australian market

One such change relates to the entry of Amazon into the Australian market. There will always be winners and losers when it comes to changes of this scale. For instance, retail sales experience zero or very low levels of growth month after month. On the other hand, online sales get larger and might even surpass the “offline” retail sales.

It’s estimated that Australians spend 8 of every 100 of their retail dollars online. Expect this number to get higher for the coming years as Amazon Australia better establishes its presence and solidifies its operations. Despite initial losses, the ecommerce giant continuously acquires more customers and gathers more data. This data is actually an asset because they can use it to spot trends, better predict demand and make the entire operation highly efficient.

It’s normal for most businesses to experience initial losses. After all, customers won’t flock to physical or online stores overnight. It takes time and it’s most likely the case with Amazon Australia. Expect in 2019 and beyond that online retail sales will get larger. It’s even possible that the purchase volume and frequency from customers will increase because of how good Amazon is when it comes to this kind of business.

What does it say then about the future of supply chain and logistics? The ecommerce giant could gradually (and then unbelievably) get a bigger slice of the pie as months and years go by. And as mentioned earlier, there will always be winners and losers. Some of our local companies will get a boost, but some will also experience upfront and/or long-term losses.

For example, as the dollars going to traditional retail go down, expect some shops to stop their operations. As a result, the industries adjacent or connected to retail will also get affected. After all, the flow of goods to those shops will stop. In other words, it’s possible that many businesses that have supply chain and logistics functions will also be affected. There would be fewer goods to store and transport, which could then affect many warehouses in different regions.

Also, fewer jobs might result as we further shift to online sales and automation. After all, fewer people are often required in automated operations. This is a huge concern both to the current employees and those planning to enter the supply chain and logistics industry.

What can businesses do to survive and get ahead?

First, it’s not about Amazon Australia itself. It’s more about the macrotrend of our preference to options and convenience. Buying something online and just waiting for it is often a more attractive option than going out, enduring the traffic and wasting time.

In addition, impulse buying could be more prevalent in online shopping. It only takes a few taps or clicks to finalise a purchase and have it delivered to your doorstep. For some customers, ordering several products is a common thing.

As more purchases occur, the systems being used by Amazon Australia get smarter when recommending products. This could then further drive up the sales numbers because those product recommendations get a higher chance of being bought. It’s a positive feedback loop because more purchases make the systems smarter (through machine learning) and then the additional data gathered is fed back to the systems.

In that case, data is leveraged to learn customer behaviour and further drive up the sales. It’s also very likely that data is being actively and dynamically leveraged in warehouse operations to optimise speed and efficiency. Analysts and operations managers study the activities and take note of the trends to minimise downtimes and optimise the speed when travelling from point A to point B (whether from the warehouse to the doorstep or from the shelf to the point of dispatch).

Data is now an asset and not just a beautiful number in a spreadsheet. In fact, the wise use of data can mean the survival or growth of a business (especially in the logistics sector). For instance, the use of EquipManager (a wireless forklift fleet management system) allows for the collection of usage data (including time, cycles and repetitions) in real time. Also, this makes it possible to monitor the forklifts’ several parameters such as speed, temperature, fluid pressure, lift count and travel time.

Those features are valuable in making informed or data-driven decisions. Even without the use of artificial intelligence, the wise use of existing data can go a long way in improving operations and minimising downtimes. This could then result to better service to customers by improving the speed of deliveries and minimising delays.

Artificial intelligence in supply chain and logistics

Earlier we mentioned artificial intelligence. Whether it’s hype or not, it will continue to permeate different industries especially those with dynamic operations and rich datasets. It’s especially the case in warehouses where there are thousands of transactions and movements.

But can artificial intelligence change everything? The fact is it’s already happening (directly and indirectly). Behind the scenes and when we trace back the supply chain, somehow there’s artificial intelligence involved in one or several of the steps.

More accurately though, what’s at work is called machine learning (a subfield of artificial intelligence). Basically, it’s about allowing the machine (or computer systems) to learn from experience or data. The learning could then be used later or real-time to produce accurate predictions and reveal useful patterns. You can readily witness this in how accurate (or how weird) websites show targeted ads to you or why the product recommendations are just amazing whenever you visit an online store.

However, it all depends on the quantity and quality of data. More data means the system can get more experience and gain more learning. Also, it’s a Garbage In Garbage Out approach. If the quality of the data is good, expect quality insights and results as well.

The supply chain and logistics is a ripe industry for machine learning because of the dynamic operations and availability of huge datasets. But even without machine learning or artificial intelligence, the trend will always go on improving speed and efficiency in every step and facet of the supply chain.

2019 trends in supply chain and logistics

In summary, the entry of Amazon Australia (and its solidifying presence) and artificial intelligence can disrupt the entire supply chain and logistics industry. In fact, it’s already happening now and this results to the continuously changing landscape whether it’s about the customer experience or behind the scenes (how goods are stored and transported).

But those disruptors are only the result of the need for better speed and efficiency. No matter the current trends, in general the focus should always be on how fast the goods are transported and how much is spent in those operations. Whether it’s how fast the customer can receive her order or how many downtimes occur in the warehouse, the companies that pay special attention to speed and efficiency have a higher chance of winning in this competitive and dynamic industry.

It’s guaranteed that the industry will continue to evolve and change. But what remains the same is the need for achieving optimal outcome while minimising the use of resources. One way to accomplish this is by taking advantage of technologies for better management of the forklift fleet and other assets.

Here at ShockWatch, we have fleet management solutions that are specifically designed for the warehouse environments. Many small businesses and Fortune 100 corporations rely on our solutions to minimise downtimes and better manage their warehouses. With our tools and technologies, your hands will be given important knowledge which you can use to better keep up with the trends, stay competitive and advance your department or business.

Contact us today if you require modern solutions to the better management of your warehouse. The complex operations now require modern solutions, which is why here at ShockWatch we’re always alert when it comes to the requirements of businesses with supply chain and logistics functions.