From A to B2B: Logistics Trends in 2021 (Part II)
This series of articles outlines some important trends to keep an eye on in logistics, and how technological innovations underpin this complexity. In part one, we looked at green logistics and circular supply chains. Part two deals with the Amazon effect.
The Amazon effect: Integrating everything
As e-commerce exploded during the pandemic, new waves of late-adopting online shoppers sought convenience above everything else—routing more and more volume through one monolithic global retailer.
When you can’t lick ‘em, join ‘em, as the saying goes, and that is the route many logistics enterprises have taken.
While the ‘buy now’ button may appear on that familiar and frictionless portal, the arrival of an Amazon parcel to your door may now involve a complex network of third-party logistics providers and technologies, integrating multiple cloud-based management systems through a mesh of APIs and partnerships.
Even finally getting that package to the door increasingly involves extremely local couriers, covering your patch for the last mile, instead of liveried vans. Here we’ll expect to see increased adoption of electric vehicles and micro-mobility as financial incentives drive this regionally. Drones are probably still some years off though, hampered by regulation frequently under state military control—so unless you’re receiving vital medical supplies deep in the Australian bush, this remains a futuristic whim for the time being.
All these integrated partners and providers serve to continually optimize the supply chain, driving down costs, and raising customer expectations. Automated multi-channel notifications every time your package makes a move, overnight and even same-day deliveries in many urban centers—where high-street retail was on the doorstep anyway—are creating a new category of connected and enabled shoppers who need never leave their homes again, even when they’re allowed to.
This all makes it even harder for new players to enter the market unless they play nicely with the existing systems.
Forecasting and reacting to change: Faster and smarter
As the COVID health crisis taught many enterprises, predicting the future is always fraught with black swan risk. However, as data gets bigger, and computing power mightier, it’s easier to scenario-test and prepare for different possibilities and their impact on global logistics, however unlikely.
Historical trends have always been a good gauge of future consumer behavior, but the shifts in the global health crisis are being seen by many as a paradigm shift in expectation and mass adoption of digital engagement. As such, it’s a lot more difficult to manage inventory and contracts based on these predictions. Some human imagination and ingenuity might have been called for, for example, to guess that a viral outbreak in China might lead to a shortage of Bluetooth-enabled headsets in Europe within a few months, as happened in the Spring of 2020.
However, artificial intelligence and machine learning algorithms are coming into their own for advanced analytics and forecasting, as supply-chain logistics have become so responsive and fast that they are essentially now futures markets. Vast computing power can model the impact of any natural disaster, trade war, political upheaval, or pandemic, coming up with at least a probability-based estimate for the impact of each flap of the butterfly’s wing. And every organization in the world is now a little more aware of the need to have some disaster recovery strategy in place.
Data—vast, fast, and accurate—fuels all of this planning.
Because of this, those sensors and oracles are becoming increasingly sophisticated. Supply-chain data is sensitive intellectual property and disrupting the data flow is potentially as damaging as disrupting the flow of goods themselves. The insertion of incorrect supply-chain data is a new frontier of industrial espionage.
RFID chips (which may cost 10x more than easily faked bar codes, for example), and blockchain-based distributed databases, provide technical mitigation and help establish meaningful sources of truth. But as standards and technologies are so widely varied around the world in our complex and interdependent supply chains, most logistics companies still rely on a blend of traditional line-of-sight technologies (scanning codes, or human inspection), alongside the latest technological advances.
About the Authors:
Ben Beeching is a marketing professional at enterprise architecture leaders MEGA International. Ben has worked in the technology industry for over 15 years. As a market research veteran and founder of NYC-based B2B market research consultancy firm, Adience, Chris Wells has worked with dozens of companies over the years.
Links:
https://assets.kpmg/content/dam/kpmg/xx/pdf/2021/02/pulse-of-fintech-h2-2020.pdf
https://www.marketdataforecast.com/market-reports/ai-in-fintech-market
https://www.ft.com/content/3fe905e7-8b9b-4782-bf2d-fc4f45496915
