2021 was full of immense opportunities for supply chain companies and specially tech startups in this highly dynamic space. While the year saw many logistics startups turning unicorns, it was also the year of innovation in abundance in not only fighting the COVID-19 nightmare but also keeping this industry well-updated with the global trends. With high hopes and aspirations in thoughts and strategies, supply chain technology companies shower their predictions for the year 2022.
Brandon Black, VP & GM, Ivanti Supply Chain
Automation in warehouses will remain a top priority for supply chain operators, particularly as personnel/staffing will continue to be a challenge in 2022. As raw materials start to freely flow through the supply chain, it will be critically important that 3PL companies adopt automation solutions that reduce onboarding time and bring task workers to a state of peak performance quickly. Warehouse automation comes in many forms, including artificial intelligence, machines, cobots and robots that assist workers with processes related to inventory planning, asset tracking, order fulfillment and more. In short, supply chain automation can save a company time and money, while helping warehouse operators improve efficiency, accuracy, and productivity. I expect we’ll see this technology take warehouse operations to a whole new level in 2022, as automation tools can help fill the worker shortage gap, secure the supply chain and future proof businesses in the face of uncertainty.
IIoT APPLICATIONS WILL ENABLE ORGANIZATIONS TO FURTHER MODERNIZE THEIR SUPPLY CHAIN OPERATIONS
Today, many organizations lack visibility into where their products or components to build products are located. In 2022, more organizations will turn to IIoT solutions to achieve real-time intelligence into the location of shipment and health of their equipment, enabling them to achieve operational excellence as well as proactively detect and auto-remediate vulnerabilities.
Companies across industrial verticals, including transportation and logistics, manufacturing, oil & gas, healthcare, and retail, will further automate their workflows and transform their environments through innovative IIoT applications. IIoT will accelerate supply chain digital transformation with driving value to vehicle fleet management, yard management, remote asset monitoring, location tracking and intelligent distribution.
ASSET MANAGEMENT WILL BECOME INCREASINGLY IMPORTANT WITHINTHE FOUR WALLS OF A WAREHOUSE
The ongoing global chip shortage has left businesses struggling to get hold of new handheld devices and instead must make use of what they already have. But all too often, businesses don’t have the visibility into where those devices are at any one time. If businesses lose or misplace devices, not only is there a cost associated with renewing them, but warehouse staff doesn’t have the equipment to pick at peak times. With visibility over handheld devices, business can understand where the devices are, when was the last time they were seen and who was the last person to have them. This visibility also provides operational efficiencies to charge devices when they aren’t being used so people can get through the whole shift without having to stop and charge the device.
OVERCOMING THE GLOBAL CHIP SHORTAGE WITH EVERYDAY CONSUMER DEVICES
A global shortage of computer chips is causing huge disruptions and causing organizations to think differently and evaluate what they can do with what they already have. For example, organizations can no longer expect to buy and quickly receive devices whenever they need them. So, they may consider blowing the dust off their old Android and iOS devices, migrating to the latest operating systems, and running operations that way to improve their workflows. In 2022, I think we’ll see more organizations rapidly deploy mission-critical applications on mobile devices to streamline warehouse operations and increase workers’ productivity and accuracy, while also reducing on-boarding time.
Rahul Vishwakarma, Co-founder and CEO, Mate Labs
Supply chain has been at the heart of growth, particularly in GTM strategies, and at the heart of growth tactics. The reason is simple: what shows, is what sells. Given that supply chain plays a critical role, supply chain executives are gearing up to quickly understand and pivot whenever something stops working. Over the last few years, supply chain executives and professionals have been warming up to the idea of AI and implementing newer methods. They are shifting away from traditional sales-led inventory allocation methods and toward a more pull-based approach that is more focused on visibility rather than sales. During this process, supply chain teams ensure that products are available as soon as possible and never run out of stock, for which companies are now turning to artificial intelligence and theory of constraints.
- Demand forecasting will be at the centre, and businesses will use a combination of AI-led demand forecasting and the theory of constraints approach, in which expectations are set well in advance and the path to success is known. Companies and teams all over the world will begin to focus on AI and theory of constraints in the next 1-2 years, but the work will begin now.
- Tracking the right KPIs: At the moment, KPIs such as SLA, Fill Rate, and Inventory Turn are all available. Some of them, however, are based on functions. I feel in the coming year, there will be a greater emphasis on collecting data at the most granular level - at the customer level.
- Automation will occur at the warehouse, plant, and planning levels; response time will be reduced from 40 days to 25 days in response to an entirely new and calculated response from production to end customers.
- Companies will now focus on demand shaping activities, where AI will play a significant role.
Supply chain will continue on its journey of almost unprecedented levels of change, with digital transformation and automation at the heart of efforts to improve efficiency and effectiveness while remaining resilient to further, unavoidable disruption.
Piyush Sharma, VP-Business, Locus
2021 was a year filled with uncertainties for the logistics industry. It led businesses to make some temporary immediate changes in their operations. In 2022, brands will make significant and foundational changes to their logistics operations. The pandemic resulted in a huge inflow of home deliveries and businesses are adding more emphasis to their last-mile capabilities. With last-mile delivery costs contributing to more than 50% of total shipping costs, the rising expectations of in-home delivery increase the risk of encountering inefficiencies. In 2022, a steady rise in enterprise businesses investing in last-mile delivery software is expected.
Driver shortages were one of the most prominent challenges in 2021 so there will be greater emphasis on driver recruitment and retention in 2022. Increasing pay rates and incentives, although beneficial, are not enough to help businesses to retain fleet drivers. Regulatory changes and changes in business practices to improve the working conditions of drivers are much needed.
Brands are moving towards localized supply chains to tend to consumers who want ultra-express deliveries. Localizing the supply chain provides better control on delivery times, minimizes carbon emissions, and mitigates risk during times of political or economic risks. Also, going local helps the logistics industry to connect with small businesses.
With a steep rise in e-commerce demand, the demand for 3PL and 4PL services has increased drastically. 2022 will see businesses increasingly investing in 3PL majorly for logistics cost reductions and scalability. Firms that want direct control over their logistics operations more than cost reduction as their priority will go with alternative distribution models. One other trend that has come to the forefront is green logistics and the dire need for sustainable supply chains. The serious concerns about the impacts of logistics on the climate crisis have spurred new innovations in logistics like electric vehicles, autonomous delivery vehicles, drones, and so on. Companies are also leveraging logistics software to assess and minimize carbon footprints. By paying attention to the trends and by being agile to adopt and adapt, businesses will be able to easily build a strategic roadmap for managing their logistics operations in 2022.
Chinmay Narwane, India Head, Garvis
Traditional planning methods, which are often driven by complex Excel spreadsheets, don’t allow to structurally include predictive data and events, aside from historical sales. This way of working means demand planners spend too much time on tedious data processing, and the forecast tends towards a moving average. Coming to a cross-departmental consensus can take weeks, as the discussion isn’t fact-driven, and the result tends to be a compromise with excessive stock positions and lack of service as a consequence.
At Garvis, we are convinced that the future of planning lies in assumption based forecasting. Technologies like Artificial Intelligence and Machine Learning allow the inclusion of customer (actual sell-in and sell-out), competitor (pricing and sell-out), and causal (events and promotions) data into the demand plan. This results in an automated, event-driven forecast that explains the past (peaks/exceptions) and predicts the future. The role of planners becomes more strategic as they need to analyze and correct the assumptions made by the technology and add new assumptions to the forecast based on the inputs from different departments (sales, marketing, finance) in the consensus meetings. This process results in a more effective, data-driven forecast (-30% error), better service levels (1% or more increase in sales) and reduced safety stock (4-5 days).