In any effective supply chain, there are contingency plans to deal with the inevitable challenges that might arise. Now more than ever, as technological advancements push the industry further, staying on top of your requirements, be it for equipment or staff performance, is more critical than ever.
Markus Kückelhaus, vice president of innovation and trend research at DHL, said: "Predicting trends is notoriously challenging. It is difficult to know ahead of time which trends will have long-term effect on businesses and which ones are simply parts of a short-lived hype."
So, what does the future hold for supply chain management and logistics?
Predictions for the industry
Transparency Market Research has suggested that while the global logistics market had a revenue worth of US$8.1 trillion last year, by the time 2023 comes around, it's thought to reach US$15.5 trillion. This also includes a predicted CAGR of 6 per cent in terms of volume.
To reach these figures though, the industry first has to shift around what the New Zealand Chartered Institute of Logistics and Transport (CILT) calls the ten 'mega trends':
- Virtual communities becoming mainstream
- More developing nations becoming developed
- Globalism becoming the norm
- An older population
- As a result, fewer children
- More women taking the lead in society and the economy
- More flexibility of choice of life
- Heightened mobility
- Networked communications media increasing
- Technological knowledge and development accelerating
These meta trends will inevitably shape how the supply chain and logistics industry will define our lifestyles and consumer behaviour in the coming years.
What factors shape supply chains specifically?
While the industry as a whole is affected by the above mentioned meta trends, there are other factors that will directly impact and shape logistics and supply chains:
1. Decreasing cost of technology
Back in the 1970s, founder of Intel, Gordon Moore, predicted that the number of transistors will double every 18 months. This means the level of performance of technology is constantly increasing, which in turn means decreasing costs for advanced equipment.
2. Increasing land, building and inventory costs
It's no secret that countries across the world are struggling with housing and land price issues. This will also have its effect on supply chains, with rising inventory holding costs going hand in hand with increased numbers of SKU's to manage.
3. Consumer trends placing higher demands
Considering the ageing population, supply chain managers need to work around the social change that comes with people getting married later and having fewer children. As such, the behaviour and expectations of consumers is set to change, which means the inherent need for certain supply chain processes will shift as well.
Low inflation rates have been driving wages higher in the past, which in return, means it's getting more costly to employ staff by the year.
How SRO Technology can help you
It's no secret that an organisation's success is driven by effective management of outputs versus inputs. To mitigate possible effects of increasing costs and challenges in the logistics industry, it's therefore critical to not only stay ahead of the curve with technology, but ensure your equipment and measurement tools are up to the task.
Do you want to ensure your business has the ability to remain competitive even in changing times? Get in touch with SRO Technology today to talk about how we can help you. We can assure you that with us, you'll get the best and brand-agnostic advice for your specific needs.