Top 14 Emerging Supply Chain Trends for 2020

Technology and society are changing at a blistering pace. This is so clearly true that stating it so plainly comes across as a cliche in the post-industrial world. Savvy business owners want to keep up with trends and technologies so they can get ahead of the curve. For that reason, we are going to talk about emerging supply chain trends that promise to make the 2010s look like the era of horse-drawn carriages.

1. Demand planning will become more important.

We’ve written before about just how important demand estimation is for businesses. Being able to better forecast demand for your products allows you to buy just the right amount of stock. This means lower expenses, better resource planning, and overall greater profitability.

As we head into the new decade, demand planning is going to become easier to do. This is partly because the supply chain is a lot less opaque to the layperson than it used to be. Another element to this is the sheer amount of data created in the supply chain process. When you combine visibility and abundance of data, demand estimation is a lot more feasible for busy companies.

Our prediction on top of that? Once demand planning becomes easier, it will become more common. Once it becomes common, it will soon become necessary to compete!

2. Global trade agreements are going to change.

If you’ve been watching the news lately, you know that trade has been in the limelight for the last few years. Between the US-China Trade War and renegotiation of NAFTA, it seems like trade is always in the news.

We can read between the lines. Trade agreements are going to change. Tariffs will probably change too. How things are going to pan out in terms of specific agreements? That’s anyone’s guess. What we do know is that any changes to trade will also affect the price of supplies and the attractiveness of certain trade routes over others.

3. Freight will become more competitive.

We recently partnered with a company called Freightos. Their business model is essentially to be like Expedia, but for freight shipping. Instead of having to pay a freight forwarder directly to handle logistics, you are now able to arrange shipments pretty easily on your own.

Whether or not Freightos leads us into a Golden Age of Cheap Freight is unknown to me. What I can say is that this basic model is part of a long-running trend of apps and websites helping people find good deals, not unlike Amazon, Expedia, or Priceline. This sort of radical visibility into the freight industry is likely to cause freight companies to compete on price.

4. Businesses will outsource more of their supply chain operations.

Companies like Freightos are making it easier to coordinate freight. Next-day order fulfillment is on the rise. Inventory control can be outsourced. Demand planning might be outsourceable in the near future.

The upshot of all this? It’s going to be a lot easier to outsource piecemeal parts of supply chain operations. On top of that, for business operations such as fulfillment, companies will find it very difficult to compete with big retailers like Amazon without outsourcing to a professional warehouse. If outsourcing becomes easier and the incentive to do it stronger at the same time, then more people will be likely to outsource their supply chain operations.

5. Artificial intelligence will find a place in the supply chain.

This may seem like one of the more far-out emerging supply chain trends, but it’s really not. Artificial intelligence, or AI, doesn’t necessarily mean the Terminator or HAL 9000. AI can be effectively deployed right now to solve narrowly-defined but complex tasks, such as voice recognition.

So how can AI be used in the supply chain? Simply put, AI is really good at recognizing patterns. Those patterns may include finding efficient logistics routes or providing more accurate demand forecasts based on available market data.

6. Where AI cannot make decisions, better analytics will help humans to do so.

One of the more irritating issues with AI is that computers tend to lack commonsense reasoning. That is to say, the most elegantly crafted AI in the world is still not yet capable of properly answering non-routine problems by understanding context. For that reason, human decision-makers will still be necessary for decades to come.

Yet even the most intelligent person cannot make good decisions if they lack context. Advanced analytics for the supply chain will provide decision-makers with better, more relevant data than ever before.

7. Conversational systems and chatbots will become more common.

If you have visited many business websites lately, you’ll notice that many sites – including our own – have a chatbox. Sometimes, when you start a chat, the “person” on the other end of the keyboard will actually be a chatbot!

This is not so much an emerging supply chain trend as it is a general business trend. However, as certain parts of the supply chain become more visible and understandable to the layperson, chatbots will be able to carry on longer, more substantive conversations about supply chain management than they can today.

8. Blockchain may find practical uses in supply chain management.

Here’s a primer in blockchain for those among us who don’t have a Coinbase account full of Litecoin.

A blockchain is a list of records linked by cryptography. It can be used to create a record of transactions between two parties that cannot be altered. (The math and science that explains why blockchain records cannot be easily explained, but you can read more here.)

Because blockchain is still tough for most people to get their head around, it has not been widely adopted outside of cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and so on. However, it has potential and other industry leaders are watching it because there may be some supply chain implications just waiting to be discovered.

9. Warehouses will be short on staff.

Both the warehousing/fulfillment and transportation industries need more help than they’re getting. With eCommerce sales continuing to rise at metoric rates, Forbes is right on the money when they say that warehouses will likely to continue to be shorthanded for the foreseeable future.

10. Warehouses are going to use more automation, including cobots.

Between the labor shortage and the increasing availability of fancy new technologies, a lot more fulfillment warehouses are likely to use cobots in the future.

What’s a cobot? Short for “collaborative robot,” cobots do a lot of repetitive tasks that have historically been done by warehouse personnel.

It sounds alarming because it seems like it could put workers in the unemployment line. However, cobots mostly handle tasks such as carrying heavy items and walking long distances, both of which can be detrimental to human workers’ health. Combine that with the labor shortage, and you have stable jobs that are safer plus warehouses that ship faster.

11. Supply chain software will become more useful.

We touched on this earlier, but Forbes, again, makes some excellent points. Supply chain software is likely to become even more robust than it already is, sporting some flashy new features such as:

• The incorporation of “Internet of Things” data on a grander scale. For example, embedding computers on individual boxes of goods could make it easier to track down where items are when they’re needed.
• Warehouse control systems will further improve, making internal warehouse operations more efficient.
• The “digital control tower” concept, which Forbes describes as a radical way to improve supply chain visibility using new sources of data. Sources of data could include social media posts, weather, advanced analytics, and more.

12. Machine learning will help with warehouse management and supply chain planning.

This is an extension of the prior point but bears mention on its own.  Machine learning allows computers to process enormous amounts of disparate data to try to find relationships. Apply machine learning to supply chain software with more data, and you lay the groundwork for super-optimized operations.

13. Cloud software is still on the rise.

In the 1980s, 1990s, and 2000s, if you wanted software to handle really complex business processes, you had to have on-premise software. That’s just the way it worked. You would, for example, implement a big ERP system on one or more dedicated servers.

In the 2010s, however, faster internet speeds and more reliable connections made cloud software much more attractive. This trend is not going anywhere. Companies will continue to adopt cloud software and late adopters may soon incur additional expenses.

14. 3D printing will start to decentralize manufacturing.

After years of being quietly adopted in more and more industries, 3D printing has found its way into as many as 71% of manufacturers. Keen observers note that this is a sign of a much larger trend.  As the technology continues to improve, manufacturing will become more local and decentralized. There will no longer be a need for certain supplies to be created in a single location and then shipped out from there.

Final Thoughts

Keeping an eye on emerging supply chain trends is necessary to stay competitive. The new decade promises to be an interesting one as technology continues to improve.

What do you think the future holds? Let us know in the comments below!