Technology Issue: From adversity, opportunity is born

By Michael Levans, Group Editorial Director · May 6, 2020

In that time, we’ve touted the benefits that technology can bring to a logistics operation in an effort to push this vital transformation. And as our analyst sources share with us this month, those operations further along may be weathering the storm of the pandemic more efficiently than those who lagged behind.

So, just where are logistics operations on this journey?

“In a Capgemini survey that was done before the pandemic, logistics mangers were reporting that implementation challenges as well as the increased complexity of technology remain primary roadblocks to digitalization efforts,” says contributing editor Bridget McCrea, who offers us a snapshot of the current state of digital supply chain advancement (page 26). “Collaboration, orchestration and integration remain major problems—three areas that have been trouble spots for more than a decade.”

However, we can only hope that at least one silver lining to the pandemic will be a kick in the pants to those operations still struggling to get over these hurdles. Nimble shifts to transportation networks and visibility into inventory along the end-to-end supply chain are all tools that would have paid huge benefits over the past two months—and all possible with the right suite of solutions.

“While I was a bit surprised to hear that those traditional roadblocks still exist, I was heartened by the Garner numbers in terms of Cloud market growth—an economical platform designed to break down those collaboration barriers through easier integration,” adds McCrea.

The recent Gartner report called the Cloud the “fastest-growing market segment,” reporting that its use increased by 27.5% in 2019 reaching $38.9 billion—up from $30.5 billion in 2018. “TMS continues to lead the way in the Cloud, while the newer, real-time visibility solutions are really gaining traction and ready to close the loop on warehouses and transportation networks,” says McCrea. “Let’s see if more jump on board.”

One area that is nearly certain to soar post-pandemic is “hyper-local fulfillment,” an emerging concept that truly took flight over the past two months. Hyper-local relies on a network of small fulfillment centers located very close to consumers that can profitably complete same-day orders—think of grocery orders that were fulfilled at your local store and either dropped at your house or ready for curbside pickup.

As Gartner’s Dwight Klappich explains as part of this year’s Technology Roundtable (page 30), the pandemic situation has supercharged the need to develop internal network design capabilities and to invest in the technology and systems necessary to make it work. “Customers want instant gratification, so the days of distribution centers located hundreds of miles from them are over.”

And while retail is the most obvious industry to adapt to hyper-local, Klappich says retailers are not alone in providing a wide assortment of goods at the best price with delivery as fast as possible—and through channel options available at the customer’s fingertips. “We’re seeing large food and beverage distributors, 3PLs and even telecoms move to this model as they recognize the need to move forward more quickly,” he adds.

May 6, 2020