To determine what technology has the biggest payback potential for logistics in 2022, we should look at what didn’t work in 2020 and 2021.
The COVID-19 pandemic became an easy scapegoat for all supply chain issues, especially as we exited 2020 and entered 2021, but the real culprit was a continued shift in buying patterns to more e-commerce and smaller shipments. In addition, there was a major disruption in ports and trucking due to a lack of drivers, and this has accelerated throughout 2021.
In my opinion, the industry won’t see a return to normality until well into the third quarter of 2022.
A recent survey showed that only 25 percent of respondents rated their level of supply chain visibility as “adequate or better.” Connectivity among systems driving visibility across the extended supply chain, using data analytics and dashboards, will allow early warning signs and constant updates of information.
Operationally, within the four walls of warehouses, and distribution and fulfillment centers, there has been a shift from pallet/case fulfillment by third-party logistics providers (3PLs) to more e-fulfillment provided by third-party fulfillment providers (3PFs) and omnichannel operations.
This has driven a need for additional labor for fulfillment operations, but people have not fully returned to the workforce, and this has forced companies to accelerate their strategies around automation of fulfillment processes via robotics, artificial intelligence, etc. Refitting a warehouse for e-fulfillment while continuing to operate is no easy matter, as it takes time to design and implement, and this work will probably continue into 2022.
The pace of disruption has grown to a level the industry has never experienced, driving many organizations to make supply chain resiliency a critical part of their business continuity strategy. With new technologies and continuous design, organizations can reduce risk, improve resilience, and turn supply chain issues into a competitive advantage. To do so, they must look beyond traditional planning technologies, using AI-driven models to forecast future volumes and testing these scenarios, perhaps with a digital twin. In addition, firms must look at all processes that can be automated to remove labor requirements, both internally and externally.
Front-end systems are becoming critical; the industry has gone way beyond simply taking an order, confirming an order, and sending an email to confirm a delivery date. Customers now expect real-time information on order fulfillment and delivery status. Future enhancements like available-to-promise (ATP) inventory information and offering alternative product selection in case of stock-outs enhance customer satisfaction and retention.