3 Key Supply Chain Trends to Watch This Year

February 22, 2018Diana Lengerson

In simple terms, the term ‘supply chain’ refers to a sequence of actions and processes that are involved in the production and distribution of products.

While the concept of the supply chain may remain relatively simplistic and largely unchanged across multiple industries, however, the technology that underpins this continues to evolve at an incredible rate in the digital age.

Below, we’ll review the key trends that will shape the development of supply chain technology during 2018.

1) Labour Shortages will Increase the Importance of Vehicle Efficiency

Logistics firms across the globe are reporting a chronic driver shortage at present, and unless businesses are able to significantly hike wages this trend is likely to continue definitely. The issue here is that inflation continues to increase at a disproportionate rate to earnings, making it impossible for many companies to meet the wage requirements of potential drivers.

This is why firms are instead focusing on improving vehicle efficiencies, while also reducing empty miles by investing in advanced supply chain software. We’ve already seen service providers like EDI leverage SaaS to improve supply chain efficiencies throughout various stages of the customer journey, for example, but this year will see hauliers hone in further on improving routes and reducing the number of drivers required.

This, along with the use of energy and fuel efficient vehicles, will have a huge impact on various industries and negate the shortage of qualified drivers.

2) Omni-channel Revenue Management will Take Centre Stage

Thanks to a combination of technological advancement and geopolitical challenges, the retail supply chain has undergone a huge transformation during the last year or so.’

More specifically, traditional bricks-and-mortar retailers are looking to leverage their stores more effectively to compete with online companies such as Amazon. This includes creating omni-channel initiatives to optimise sales and increase market share, and while this offers numerous advantages it can also create significant challenges in terms of determining margins surrounding omni-channel order flow paths.

This is why more effective omni-channel revenue management will become a key focus in 2018, as businesses look to increase their turnover and market share in a way that translates into greater profitability. Integrated supply chain software can play a key role in helping retailers to achieve this and understand the true costs and margins associated with omni-channel sales.

3) Brexit will Continue to Cause Market Disruption

Unless you like to spend a great deal of time hibernating, you’ll probably know that Britain’s proposed departure from the EU has caused huge disruption for manufacturers, retailers and suppliers. This, in turn, has impacted on supply chain efficiency, causing brands to embrace new technologies and strategies to mitigate these challenges.

According to The Chartered Institute of Procurement & Supply (CIPS), around 63% of participating EU firms are planning to move at least some of their supply chain out of the UK. A further 20% of British-based businesses are expected significant difficulties in securing new contracts that extend into 2019, which may in turn compel them to reduce the cost of producing and shipping products.

With the Brexit uncertainty set to continue indefinitely and least until March 2019 when the negotiation period is expected to end, businesses will also be increasingly inclined to seek out new SaaS and blockchain technologies and improve their record keeping and management processes.

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