By Cindy Hanauer
What have you done lately to improve your supply chain? It’s easy to think that our competitors look like us and act like us. But today, nothing is further from the truth! As our eyes gaze down the block assessing the new florist or supermarket in the neighborhood, a new supply chain gorilla is creeping up behind us – a supply chain gorilla that’s also good at selling products! Yes – good at selling OUR products and every other product: the clothes you wear, the food you eat, the electronics you use and the gifts you send!
Forbes has recently reported that 82% of the procurement organizations surveyed were currently undergoing a transformation, while only one-third of procurement organizations were undergoing a change when previously surveyed. And what’s driving these procurement changes? Improved technology such as PO aggregation, better load optimization tools, predictive technology, virtual reality, and artificial intelligence that have become deeply embedded into mainstream supply chain activities.
So, what are the top eight supply chain innovations to be on the lookout for in 2023?
- Clear Product Identification
At a time when multi-channels of social media are at our customers’ fingertips, the chatter about our products is incessant: the good, the bad and the ugly. The “clean label” movement continues to gain ground as customers demand to know everything about a product before purchasing it. As a result, companies are required to understand and identify every segment of the supply chain and communicate it via labeling to the consumer. With more and more millennials joining the workforce and purchasing our products, the clear label initiative will continue to penetrate the market.
- Destination Visibility
In the same way that today’s consumers want visibility from point of origin, they also want the same visibility to the point of destination. Today, almost every last mile delivery company offers delivery tracking, and many on-trend floral ecommerce companies are offering the same type of tracking including a photograph of the recipient actually receiving the product in-hand.
- Urban Warehousing
Most retailers are struggling to keep up with Amazon’s fifty-eight Prime Now hubs, which fulfill their customers’ need for same-day instant delivery. It was less than a year ago that 3-day delivery seemed “fast” – today, the norm is overnight or same-day delivery.
- Smart Technology and Temperature Sensors
With the surge of e-commerce, the need for temperature monitoring has come to the forefront for product deliveries ranging from spirits, food, pharmacy, and flowers. Weather data for logistics planning and temperature probes for product enroute will become the norm versus the exception to the rule.
- Home Delivery and Last Mile
The customers’ demand for immediate delivery has re-invented the last mile of the supply chain. Subsequently, billions of investment dollars are being infused into companies like Deliv, UberRUSH and Amazon Flex, who are organizing independent drivers to pick up and deliver packages using a centralized GPS route management system. In fact, many large cities are even organizing bicycle delivery in the same way.
A world that was once reliant on FedEx, UPS and the post office now has many more choices to meet the consumers’ demand for immediacy. Herein, technology is the foundation of this revolution, supported secondarily with the product itself.
- Insourcing Deliveries
With Amazon at the forefront, many companies are using a combination of technology and their own fleet to manage last mile deliveries ranging from food to household items, to gifts. Progressive companies are using their own fleets or 3PLs to shuttle products around the city. In fact, many companies are organizing their own co-op with other local retailers to support this initiative.
- Self-Driving Cars, Drones and Robots…Oh, My!
With labor being the most expensive cost within the supply chain, it’s no surprise that autonomous methods of delivery are being tested. If robot or drone delivery can handle even a small percentage of deliveries, it will change the game considerably reducing overall delivery costs by 60%. Without the drive-time restrictions of human drivers, a 24-hour, autonomous supply strategy will exponentially create time and monetary efficiencies. Add autonomous delivery to auto-select robotics already used in most major warehouses, and the path is clear toward the elimination of the cost and time limitations of human intervention when holiday deliveries reach their peak.
- Social Media-Closed Loop Customer Feedback
Supply chain innovation will move from the tip of the service pyramid to the base of the pyramid. As such, customers will continue to tell the tale of their product experience to thousands of their closest friends. Great leaders will continue to leverage social media to troll the internet for happy customers and dissatisfied customers, putting in place a response program to resolve the most frequent occurrences of breakdown. Customer feedback will become immediate and transparent in the same way that customers expect supply immediacy and visibility.
One of the largest disruptors in the retail business has been the supply chain transition from first stop to last. Supply chains have become service chains and are no longer back- office functions. Supply chain models have moved to the front and center of today’s business expansion and the entire retail game can be won or lost simply in the management of logistics innovation.