This commentary appeared in the print edition of the Jan. 6, 2020, Journal of Commerce Annual Review and Outlook.
2019 has been yet another year of change, innovation, and growth for supply chain. In last year’s CSCMP State of Logistics Report, we reported that since 2008, logistics costs had risen 54 percent, an average annual increase of $57 billion dollars. In 2018 alone, costs increased by $167 billion! Conversely, since 1988, as a percent of GDP, logistics expense went from 11.5 percent down to 8 percent, a reduction of 30 percent. These statistics paint a picture of supply chain that gives back to the economy.
Today’s successful leaders are consumers of meaningful information — that which translates to better decisions. The ongoing discussions and negotiations around trade require one to judge implications for inventory, costs, and of course, service to customers. That means you need to keep a strategic eye on macroeconomic trends, advancements in technology, and consumer expectations, any of which has the potential to become either a rallying point or a disruptor to your business. Supply chains still roll on despite recessions, natural disasters, or border issues. We are the undisputed champions of enabling global trade.
Consider the potential impacts of blockchain, artificial intelligence and deep machine learning, drone technology, and all of the other tools being created seemingly on a daily basis. I say potential impacts because they only matter if you’re able to incorporate them into your daily operations. Having the ability to discern what matters is increasingly important. Assembling the best team has never been more important. Most people tend to be either strategic or tactical by nature. You need either to be both or to hire both, and that leads us to the requirement to grow or assemble talent.
Supply chain is still, after all, a people business. All of the whiz-bang trends and technologies are great, but people are greater. If you line up a continuum with the organization on one end and a single employee on the other, my advice is to focus squarely on the middle, which is your supply chain team.