Breaking Down Supply Chain and Logistics Trends in 2017

In a society surrounded by digital innovations, companies must stay ahead of the trends to survive.

Ludger Schuh | INFORM GmbH

“The digital transformation is no longer just a buzzword.” This was a fitting conclusion from Prof. Dr. Raimund Klinker at last year’s international logistics congress in Berlin.

For several years now, processes (especially in logistics, but also in many other economic areas) have become more and more digitalized.

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The digital transformation is no longer just a buzzword.

This trend will continue for the next several years. There are, however, other changes to consider – changes in procurement approaches and along internal delivery chains, as well as interactions with partners, suppliers and customers when creating and improving business models.

Here is a look at some of the trends to watch in 2017:

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Consistency is in the past – the business model of tomorrow is versatile

Both logistics expertise and understanding cost-efficient delivery and value-added chains are of the utmost importance, but they aren’t enough by themselves.

2017 will be the year of deep IT knowledge, intuition about rapidly changing customer demands and advanced digital capabilities.

To create an agile and flexible workflow within any organization, you must develop the proper groundwork. This requires flat hierarchies and short decision paths. This is the only way that digital innovation, which usually takes years to implement, can be quickly prepared for use to compete on an international scale.

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Digital transformation instead of change resistance

Actual business operations have shifted into the virtual world. Companies without a ‘virtual counter’ will lose their customers in the long run.

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You must be open to disruptive, even paradoxical-sounding ideas and supply chain changes.

According to a study from the German E-Commerce and Distance Selling Trade Association, online trading grew by 12 percent in 2015. In 2016, this number was likely even higher. IT experts, digital natives and data scientists are vital for this development.

IT managers have to co-develop the digital transformation opportunities for their companies, even outside the classic online trade. Small- and medium-sized enterprises and wholesale operations are not exempt from the digital transformation.

You must be open to disruptive, even paradoxical-sounding ideas and supply chain changes. In this industry, you can encounter rigid processes and a reluctance to take risks.

This resistance to change restricts advancement and impedes competitiveness whenever the supply chain is undergoing modifications. Use 2017 to step outside your comfort zone and begin the transformation – before it is too late.

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Breaking down digitalization: cross-level data usage

Movement and traffic data are generated across all levels of the supply chain: purchasing, the sales department, production, the distribution network and the warehouse. Yet few people use this data efficiently, despite this new world order.

Right now, the data are often collected in customer support and customer acquisition. The use of Customer Relation Management (CRM) and ERP systems is quite common. Moreover, the demand to display management-relevant key figures graphically and generate the right evaluations with a few clicks is steadily growing.

Business Intelligence is also on the rise. But what about the data from internal networks and the internal supply chain? I expect the digitalization of small-part, deeply integrated processes in the supply chain to become a trend in 2017.

The automation of routine supplier orders, the increasingly employed VR-driven acquisition of movement data and the merging of suppliers and partners on to one internal planning platform will be worth watching and implementing in 2017. Only those who share data can expect to profit from better results.

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The customer dictates the rhythm

In the coming year, businesses will be increasingly driven by the end of the value-added chain – meaning the customer.

According to this year’s trend survey from BVL International, increasing complexity is also an accompanying factor. Rigid, old processes, which have dictated past production, are outdated. The future of the industry will be networked and scalable.

This means that communication within supply chains will be thorough, and even medium-sized enterprises can afford technological solution concepts.

New, unexpected and innovative ideas and developments in manufacturing, trade and IT might surprise us in 2017. To survive in today’s market, all these different areas must be bridged together.

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Only those who share data can expect to profit from better results.

Digital data experts and professionals supported by intelligent software systems are, therefore, imperative for successful operations.

Increasing complexity within the supply chain can be kept under control through the prioritization of data and the effective employment of important information.

It will also be important to call upon human expertise at the right moment and integrate this knowledge into the digital strategy. In the context of customer satisfaction, all of this should help ensure long-term competitiveness.

Are you prepared for new innovations and trends in 2017? What topics do you think will define this year? goldbrown2

This article first appeared on Inventory and Supply Chain Optimization Blog and was republished with permission.

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Measuring Supply Chain Success

Logistics in the Cloud

Three Keys to a Greener Supply Chain

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Ludger Schuh is head of the Inventory and Supply Chain Division at INFORM GmbH.

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