Technology and Supply Chains – Current Trends and Future Predictions

Sarah Foster

Blog Post #5 -Connection to Week 6: The Role of Technology and the Web on Global Supply Chains

Technology and Supply Chains – Current Trends and Future Predictions

This week’s readings focused on the increasing role of technology in supply chains.  To learn more about technology’s current and predicted influence I read two articles: Supply Chain Matters’ “Trends that Will Shape the Supply Chain in 2014,” and Forbes’ “Supply Chain and Logistics Predictions for 2014.”

“Trends that Will Shape the Supply Chain in 2014,” Supply Chain Matters, Supply Chain 24/7, January 28, 2014, http://www.supplychain247.com/article/trends_that_will_shape_the_supply_chain_in_2014.

Steve Banker, “Supply Chain and Logistics Predictions for 2014,” Forbes, January 10, 2014, http://www.forbes.com/sites/stevebanker/2014/01/10/supply-chain-and-logistics-predictions-for-2014/. 

Key trends highlighted in Supply Chain Matters are: the predicted growth of e-commerce; the growing importance of social media; the technological advancements of 3D printing; the increased applicability of big data; cloud computing to improve resiliency; the importance of emerging markets; and the increased complexity of urban deliveries. I will elaborate on two of these trends: e-commerce and urban deliveries.

Companies are relying more and more on e-commerce to maintain and increase revenue. Companies will need to revamp supply chains so that they can account for “more items going to homes and fewer to stores.”[1] This relates to the Home Depot article that delineates the retailer’s strategy to manage e-commerce growth. Home Depot is offering additional products online that so “associates at Home Depot stores will be able help customers find and buy items by offering them a broader array of merchandise through access to the retailer’s extensive online inventory.”[2] I think that Home Depot’s strategy will work, so long as they have a sufficient number of knowledgeable employees in stores to ensure that customers that do find what they want in the physical store will find what they want on the website.

•          What strategies would you propose to a company that needs to manage an increased online demand?

Cities are becoming more congested and setting higher environmental standards.  The article states that “retailers, manufacturers, and logistics companies therefor need to work together to make their delivers more environmentally friendly: through using alternative vehicles, load sharing or other innovative solutions.”[3]  This makes me think of Amazon’s experiments with drone delivery, and I think that in the emerging markets, where air traffic regulation is at a minimum, numerous companies may implement drone delivery strategies in the future.  I think that if a company is a leader in this innovation (like Amazon) then that company will have a huge competitive advantage in regards to emerging markets in developing countries. I think this because developing countries do not have the extensive, maintained road and highway infrastructure that is present in developed nations. 

•          Do you think companies will begin to build distribution centers and warehouses close to emerging markets? Under what circumstances would this result in a substantial competitive advantage?

The second article, Supply Chain and Logistics Predictions for 2014, forecasts: the growth of natural gas fleets; an increase in the use of robots; the rise of Omni-channel courier companies; and supply chain software becoming more user friendly.  One reason the author predicts a high return on investment for running natural gas fleets is that “the price of this domestically generated fuel going forward will be much less volatile than oil and gas products that are sources from some very unstable regions of the world.”[4]  I wonder if exporting natural gas will cause prices to increase in the United Sates.

The article mentions Kiva Systems, which was discussed in class, and predicts the eventual omission of people in warehouses.  I think that the prevalence of robots combined with 3D printing technology will cause huge disruptions in the future in regards to a decreased number of jobs.  The article also discusses Omni-channel courier companies, claiming “to achieve higher volumes, multiparty retailer/courier collaboration would be very helpful… if one courier was delivering orders for several retailers in a metropolitan area, route forecasts would be more accurate while the cost per delivery would go down.”[5]

•          Do you think some retailers and/or industries would benefit more so that others from Omni-channel courier companies and e-fulfillment warehousing specialists? Why?

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[1] “Trends that Will Shape the Supply Chain in 2014,” Supply Chain Matters, Supply Chain 24/7, January 28, 2014, http://www.supplychain247.com/article/trends_that_will_shape_the_supply_chain_in_2014.

[2] William B. Cassidy, “Home Depot’s New Strategy Tied to E-Commerce Growth,” Journal of

Commerce, August 18, 2014, http://www.joc.com/international-logistics/distributioncenters/home-depot’s-new-strategy-tied-e-commerce-growth_20140307.html

[3] “Trends that Will Shape the Supply Chain in 2014,” Supply Chain Matters, Supply Chain 24/7, January 28, 2014, http://www.supplychain247.com/article/trends_that_will_shape_the_supply_chain_in_2014.

[4] Steve Banker, “Supply Chain and Logistics Predictions for 2014,” Forbes, January 10, 2014, http://www.forbes.com/sites/stevebanker/2014/01/10/supply-chain-and-logistics-predictions-for-2014/. 

[5] Ibid.