Supply Chain Predictions: What are the next big things to look out for in 2020?

Mel Tymm
Mel TymmIndustry Principal, Maginus
28 Jan 2020

 

2020 will be a big year; with Brexit now guaranteed, retailers, manufacturers and those all along the supply chain need to ensure they’re Brexit ready – by having the right paperwork (physically and digitally) for imports and exports. Whilst this will bring closure to an issue that’s been going on for three and a half years, it will also bring about a new array of issues as a by-product.

Therefore, with this immensely tricky 12 months ahead, what do supply chain firms need to consider as part of their business’ new year’s resolution?

Warehouse Woes

The cause of many headaches within the industry is warehousing, but 2020 may bring about a much-needed shift. The new year will likely see a greater migration towards smart warehouse adoption as technology has clear benefits within a warehouse environment. Mobile devices can assist warehouse workers with picking, scanning and monitoring their activity, taking much of the monotonous admin off their hands, thereby enhancing efficiency and increasing productivity. The aim here will be to remove paper-based picking processes as manual systems such as these can magnify the chance of mistakes being made within orders, or even orders being missed.

We will also see technology take a much more active role within the warehouse in the form of robots. Collaborative robots (cobots) will become more commonplace as 2020 progresses, as the need for automation continues to take hold. The purpose of a cobot isn’t to replace employees but to work alongside them and facilitate their roles, for example by taking care of heavy lifting or repetitive tasks, such as packing boxes. This is key because, during peak times, people are crucial to success as they can think on their feet and solve problems that robots simply can’t. A by-product of this trend is that we are also likely to see a reduction in the cost of implementing smart warehouse technology over the next year, a cost that has traditionally been restrictive. Whilst still in the early adoption phase, cobots are becoming smaller and cheaper, making them a more feasible choice. Add this to the fact that they’re becoming easier to integrate into a warehouse – physically and technically – and it’s easy to see why adoption is increasing.

Supply chain companies may also choose to deal with the warehouse dilemma in a more agile way over the next year. This may be through the increased adoption of a mobile warehouse approach in areas with a high density of active consumers – such as a large city. A mobile warehouse consists of a van that is parked near the city centre loaded with the most common goods ordered. Orders can be picked, packed and dispatched straight from the van, enabling options such as same-hour delivery that are becoming ever-more popular. The benefit to supply chain companies is that this approach can help to free up warehouse space, which is already in short supply, and take pressure away from the main warehouse, therefore ensuring that fulfilment operations aren’t impeded by an especially busy period.  

The Next Generation

Another major trend to be prepared for in 2020 is the continued growth of the third-party logistics (3PL) market. 3PLs can be seen as a ‘centre of excellence’ for warehousing and logistics, and are therefore an attractive option for many. The use of a 3PL can allow many retailers to achieve logistics and delivery processes that wouldn’t be available to them if they were to act alone, as well as greatly enhancing efficiency. 3PLs are able to generate economies of scale which others could not. When combined with the fact that retailers can take advantage of distribution centres dotted around the country, and therefore achieve faster delivery, it’s easy to see why many will continue to choose this route.

From DC to DTC

The rise of the 3PL goes hand-in-hand with the shift to direct-to-consumer (D2C) retail that is showing no signs of waning. In fact, D2C currently makes up 16% of all UK manufacturing sales. In order to fully realise the benefits of D2C retail, however, manufacturers that have adopted the model will need to ensure they have the internal skills, relevant D2C processes and capacity to have a direct relationship with customers – or use a 3PL to manage some or all of this operation, meaning manufacturers can implement this strategy without changing their business model.

With a slumping manufacturing sector yet a boom in online retail, those along the supply chain will be pulled in various directions over the next 12 months. In order to have a successful 2020, businesses need to be prepared for what’s ahead and have contingencies in place as the status quo shifts.

Read next: Direct to Consumer Ecommerce: Is there a Case for Cutting out the Middle-man?

Read next: The Top 6 Ecommerce Trends in 2020

 

 

About Maginus

For retailers – big and small – for whom success depends on growing online, we provide what it takes to sell better online. We do this by delivering class-leading Ecommerce websites that drive online growth and sales fulfilment solutions that facilitate next day delivery and customer service excellence.

We are independent and technology-agnostic but with close partnerships to several leading technology companies so we can always recommend the most appropriate platform for our customers' needs.

With a 20-year heritage in technology implementations, we take pride in helping our customers achieve long term benefits from the solutions we provide. We can do this, because we've done it before, for people just like you.

 

 

 

The Top 6 Ecommerce Trends in 2020


We've rounded-up our predictions for the top 6 Ecommerce trends to watch out for in 2020. Each trend should be analysed and its impact considered if it's going to make a demonstrable difference to your overall Ecommerce growth.