News & Publications
Supply Chain Trends to Watch in 2018
There are several key supply chain trends to watch in 2018 -
Omnichannel Revenue Management
The retail supply chain has been going through a massive transformation. Traditional brick and mortar retailers seek to leverage their stores to better compete against Amazon and other e-commerce retailers. ARC’s Chris Cunnane does an annual survey omnichannel retail in conjunction with DC Velocity. The main reason retailers invest in expensive omnichannel initiatives is to increase sales, increase market share, and improve customer loyalty. Meanwhile, most retailers have trouble understanding just what their profitability is surrounding different omnichannel order flow paths. For example, in my colleague’s latest survey a majority of retailers report they can’t even measure the financial impact of a return.
Driving unprofitable sales makes no sense. Eventually, retailers need to understand their true costs and margin based on the omnichannel flow path. Will significantly more retailers begin tackling this problem this year? We don’t know; that will be the focus of Chris’s next survey on this topic. Further, if companies can measure their profitability, what are the best practices that separate more profitable retailers from less profitable ones? Solutions certainly exist in this area, but Chris’s research will also focus on process and people issues. Meanwhile, B2B companies also need to improve their multichannel capabilities.
Logistics Workers, Labor Shortages, and Automation
The industry continues to discuss the driver shortage. Basic economics tells us that if you raise wages, you will attract new drivers to the industry. Not surprisingly, carriers remain reluctant to embrace that tactic. There continues to be a discussion about whether autonomous vehicles could be a solution to the shortage. They won’t be; at least not anytime soon. The technology challenges in getting to a fully autonomous truck are daunting. Because autonomous vehicles won’t happen soon, carriers need to take aggressive actions to lure new drivers into the industry and recruit and retain existing drivers. Further, shippers and carriers can reduce empty miles, and thus reduce the need for drivers, by using transportation management and transportation network design solutions.
There has been a less public discussion about looming labor shortages in warehousing. The amount of picking, because of omnichannel and e-commerce, has increased the need for warehouse workers. But it is not a desirable job despite paying about $15 per hour on average. Logistics service providers are actively exploring the use of autonomous mobile robots to meet the labor shortage. The economics, when bots are sold in a Robot as a Service (RaaS), make this form of automation a viable alternative to people. Expect booming sales in this market over the next few years.
Contributor: Anthony Gentile
About Allyn International
Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance. Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North America, Europe and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, Florida, U.S.A., Shanghai, P.R. China and Prague, Czech Republic. For more information, visit www.allynintl.com.
References:
Banker, Steve Service Director, Supply Chain and Management at ARC Advisory Group; Posted 12/7/2017 on Forbes.com.