Supply-chain trend lines indicate that as 2022 rolls out, the logistics industry will become even more infused by technology as it seeks out better solutions to speed the delivery of goods at the lowest possible cost.
“Like every other industry, the logistics industry in the pandemic had to face several challenges,” wrote Sujith Kumar, a Dubai-based Information Technology academic in a blog post for global consulting firm Stefanini Group.
“COVID-19 created an imbalance between supply and demand of goods, greatly affecting supply chains globally,” stated Deborah Laloum, a market-strategy professional, in a blog post for Bringg, an Israel-based delivery and fulfillment cloud platform provider.
The upshot, Laloum wrote, is businesses must get back on track by reevaluating their operations and embracing “growing trends to keep customers satisfied by receiving their orders on time and with ease.”
To foster “quicker delivery of goods and reduced supply chain costs, businesses have started to experiment with micro-fulfillment centers and last-mile delivery options,” according to a blog post by McMurray Stern, a U.S.-based builder of commercial-storage facilities, including micro-fulfillment centers, or MFCs.
MFCs for groceries and general merchandise are expected to grow by 60% CAGR by 2026, according to a Reuters news story. That’s largely because these urban warehouses, running from 5,000 to 25,000 square feet, “can meet the requirements for same-day delivery through in-store picking or multiple last-mile delivery options.”
McMurray Stern explained that MFCs are an outgrowth of e-commerce demand, which has naturally upped demand for efficient merchandise returns and buybacks. The thinking is logistics providers can help retailers sell returned items faster while driving up revenue on used goods.
“Reverse supply chains will continue to thrive and grow, with managers looking for ways to increase efficiency in their reverse logistics. In 2022, businesses can expect to see even more growth in this area of supply chain logistics,” he wrote.
From AI to 3D
Sujith Kumar highlighted developing trends, including:
- growth in autonomous delivery vehicles
- building products on demand via 3D printing
- using AI-infused fleet management software
- growth in last-mile delivery services
- leveraging blockchain technology for supply chain management.
Deborah Laloum’s top 2022 trends included:
- focusing on driver retention
- localizing the supply chain
- using crowdsourced delivery and multiple logistics partners
- moving to last-mile delivery solutions
- using supply chain management for returns
- forecasting for inventory and delivery.
Expect Last-Mile to Keep Growing
If there’s a common theme among these analysts, it’s that the last mile is going to continue to grow — and to grow into handling more kinds of freight moves.
“The trend for last-mile deliveries increased during recent years because it has become cheaper and more convenient than using couriers such as DHL, UPS, or FedEx,” noted Kumar.
That’s also happening, Laloum said, because “the technology available along the last mile gives logistics companies the ability and the opportunity to make this part of the supply chain visible to all parties involved, no matter if they are delivering small packages, furniture, medical equipment or even solar-powered vehicles.
“When retailers and logistics companies come together as supply chain partners, focusing on creating the best last-mile delivery possible, the technology involved allows them to adapt to the market and deal with unexpected events,” she continued, such as traffic, routing issues, and inability to deliver packages for a variety of reasons.
“Using AI and machine learning… will define who will be seen as supply chain leaders in 2022.”
It’s been talked about for years (in fact, we wrote about it in 2016), and its presence in the marketplace has been growing steadily, but 2022 may be the year in which 3D printing breaks out. “With 3D printing, companies can change their business model to do just-in-time production instead of mass production,” Kumar said.
3D printers are being used at every stage of the supply chain process, he said. “They can be found in warehouses where they are producing mock-ups or replacements on demand. Their use is also spreading into distribution centers where orders are assembled before shipping out to customers around the globe via air freight or ocean vessel.”
Another key trend Kumar identified is the upswing in activity around autonomous vehicles. “Logistics companies, such as DHL and UPS, have invested in research to develop autonomous delivery vehicles” to make it easier than ever to ship goods around the world without worrying about driver shortages. Logistics companies may soon use autonomous vehicles as part of their fleets.”
Kumar also placed artificial intelligence (AI) high on his trend lists, seeing its importance especially in terms of advancing fleet management software: “AI is already being used in the freight management sector, but with continued innovation and development, AI will become an essential part of managing any fleet.” AI can help optimize routes based on weather or traffic patterns and make more accurate predictions about the status of a vehicle, said.
He also touched on blockchain technology, noting that it’s a relatively new concept in the logistics industry.
“It is a decentralized ledger that records all transactions and allows participants to work without going through a third party. The potential of blockchain lies in its ability to reduce fraud by making it nearly impossible for someone to alter data without being detected.”
Supply Chain Management
Supply chain management technology was discussed heavily by Laloum. For example, she contended that in order to fulfill same-day orders, supply chains must be shifted to the local level. On a local level, supply chain management, or SCM, means fulfilling orders from stores or urban fulfillment centers. This way, delivery can be done quickly and efficiently, boosting the customer experience and keeping up with the supply chain trends.
Laloum also offered detailed thoughts on how to boost driver retention. To stem the driver shortage and help boost driver retention, companies must include driver incentives to remain (including, but not limited tom pay and safety matters) and consider offering a driver app to increase efficiency, “thereby unlocking the supply chain bottleneck that is present in the last mile.”