Supply chains are essential in business. It’s hard to imagine any company being effective without a network of reliable relationships with other companies. But just like any other aspect of business, supply chains are always evolving and changing with the times.
Technology is, of course, driving much of that change. Futuristic technologies which once seemed like science fiction just a few years ago are already being put to use by top supply chain innovators. Automated transport may also have a big impact.
So what are the supply chain trends on the horizon?
Developing Solutions For The “Last Mile”
Today’s network of integrated supply chain solutions is very good at moving goods close to consumers and businesses. Sending products on huge ocean liners and by lorry through companies like KG Logistics is very cheap. But once products get to a regional depot, the price of getting them to where they need to go starts to rise. It turns out that those last few miles between the depot and the destination are incredibly expensive.
Because of this, there’s now a race in the industry to deliver solutions right to the front door of businesses that don’t involve an expensive vehicle and driver. In practice, this means finding some type of new technology or business model to make it practical.
Amazon is currently experimenting with drones, and other delivery companies are investigating robots. But these technologies are still in the prototype stage or aren’t being used in numbers to make a big difference.
The real change is in the way the last mile is organised. Thanks to crowdsourcing, it’s now possible to bring networks of people together and have them all transact with each other in complicated ways that simply weren’t possible before digital payments. Deliveroo and Uber are great examples of this. New crowdsourcing technology will soon make deliveries of all kinds cheaper, bypassing the expensive carriers in the process.
You can have pretty much anything as a service these days: accounting, finance, marketing. But what about your logistics?
It’s becoming increasingly difficult to determine whether a logistics company is a software company, a platform, or a traditional supplier. Many large logistics companies no longer derive their value from their fleet of ships and trucks, but rather from how they use them.
It turns out that logistics companies have to deal with some of the most complicated problems in mathematics. Something is simple as calculating the shortest route to take between 10 locations might sound like an easy problem to solve, but for a computer to solve that problem can take years. If you increase the number of destinations to something more realistic, like 100, the calculation of the shortest route could not be performed by the world’s fastest computer in the lifetime of the universe.
Smart software, however, is starting to find ways around this computational bottleneck. Using heuristics, a little bit like how a human would think, smart machines are able to break these kinds of problems down into smaller chunks, helping to make them computationally tractable. Expect to see this kind of software in many applications in the industry.