Major Influences on Supply Chains for 2019

One of the things that defines supply chain management today is the rapid pace of change across all dimensions — competitive landscape, regulations, technology, and many more. Keeping a pulse on these industry trends and changes is increasingly important in order to make sure you’re as prepared as possible to succeed in the months and years ahead. That’s why I was pleased to discuss some of the most critical trends with industry veteran Doug Surrett, Chief Product Strategist at BluJay Solutions, in a recent episode of Talking Logistics.

Global trade challenges

As we quickly approach 2019, there are a number of potentially game-changing global trade challenges supply chain professionals must consider in their planning, including new tariffs, trade wars, and Brexit. I asked Doug what impacts he foresees.

Doug started with Brexit considerations. He said the UK’s revenue ministry has estimated that if the “hard exit” scenario occurs, “Up to 200,000 companies in the UK will have to start submitting declarations that they have not had to submit in the past. And there is a similar number of companies in the EU that will have to start submitting them as well. The UK government has recognized this and has set aside funds to help companies invest in technology to deal with this challenge.

“In the US, companies are facing similar challenges reacting to the changing list of tariffs and sanctions, as well as changes to NAFTA [now USMCA], in trading with other countries,” continues Doug. “Technology vendors are preparing for these changes and updating their software, but companies have to be on a solid technology platform to take advantage of these updates so they are not in violation of laws.”

Single Window

While there are many challenges ahead, there are also efforts to help simplify trade processes. One such effort is the EU’s Single Window initiative. I asked Doug to explain this development.

Doug notes, “You have all of these governmental and nongovernmental agencies that are participants in the supply chain process, such as shippers, airlines, freight forwarders, customs brokers, customs authorities and other agencies. In the past these were all operating on disparate, often disconnected technologies. The single window concept, which has been turned into a mandate, is to have a single system to provide visibility and information-sharing across all of these participants so everyone is viewing the same information. Other processes such as obtaining a government import or export license could spawn off from this.

“As the single window concept has spread across Europe, and is starting to spread across Asia as well,” explains Doug, “this has meant all of the backend systems have had to be replaced and, therefore, all of the systems and portals that once interacted with those older systems now have to be updated as well. For example, many of the UK systems communicated through the EDIFACT standard. With the single window approach many of the systems are now using the XML standard, and systems interfacing with the new backbone will have to upgrade to the XML standard too. In the end, this will be a good thing for everyone. The single window movement is a step forward and will lead to other strategic advancements in the future.”

Last-mile logistics

Shifting gears, I asked Doug about the impact of e-commerce and last-mile logistics. He mentioned several influences, starting with crowdsourcing. “There has been a lot of ebb and flow, but there are literally hundreds of small crowdsourcing companies out there offering to provide last-mile deliveries,” notes Doug. “I think it will resolve into two main scenarios. You will have large retailers that realize they need to consider their store inventory as part of their e-commerce fulfillment model and will use employees to deliver orders on their way to and from work. In another scenario, the market will coalesce around a few large crowdsourcing companies that have the brand recognition similar to what Uber has done with crowd-sourced taxis.

“Another emerging influence is geolocation-based deliveries,” mentions Doug. “Think of it like auto glass replacement companies that come to wherever your car is to replace your windshield. You provide a geocode to these new delivery companies, which are popping up across Europe and parts of Asia, and they will deliver your package to that location. I think this is a major trend that will totally change the way we think about logistics today. It’s also a major change for technology companies that today use street addresses for route optimization, for example, but in the future will use more granular address systems like What3Words and Locpin.”

Technology Enablers

From blockchain to route optimization to a whole array of new communication interfaces, it’s clear that technology will be at the center of supply chain transformation moving forward. How must supply chain and logistics systems change to accommodate these new trends? What does “containerization of systems” mean and how will service-based architectures enable adaptivity? What about customer-customizable solutions? Doug and I discussed these questions and more, so I encourage you to watch the full episode for additional insights and advice. Then keep the conversation going by posting a comment and adding your own thoughts and experiences.