Key takeaways from FTIs 2023 logistics and supply chain trends
Logistics get logistical
We joined the excellent Future Today Institute (FTI) to hear their supply chain and logistics predictions.
Global events such as the container scandal, Ukraine, and climate change are forcing new fuel supplies and firms to rethink their approach to logistics. Industries particularly disrupted are automotive (reduced parts), warehousing, food and consumer goods.
Their annual research has been downloaded over 1 million times, so we always pay close attention. Here are the highlights from their seven categories of trends in this space.
1. Track and trace
Smart labels are becoming more intelligent. By 2028, they are estimated to generate 20 billion in revenue. New uses include 1. gathering data, 2. dynamic packaging and distribution, 3. carbon footprint reporting, and 4. using DNA to protect rare animal species.
Why this matters: Consumers want transparency and real-time tracking of goods and routes, down to the container and package. Track and trace offer new methods of building trust. Firms must invest in processing and responding to data, tracking carbon emissions costs, and proving compliance.
Ask: How can you use technologies such as intelligent labelling to build trust and gain efficiencies?
2. Digital passports
A code tracks a product’s lifecycle, from raw materials to packaging. It’s already being actively pushed in customs, ie. EU passport. Shell is now monitoring equipment along the procurement line and removing the admin.
Why this matters: It makes the design process properly sustainable, which accounts for 80% of a product’s environmental impact. It also builds trust. Watch out: the documentation process needs thinking and could be easier for larger firms.
Ask: How might digitisation offer new opportunities from the design process to reporting?
3. Digitised training and management
AI decision-making and immersive VR training are applied to help employees learn new skills and be effective in dangerous work situations. Smart glasses are the best at monitoring worker safety. Data shows better information retention through immersive training, which can be delivered on demand.
Why this matters: Employees see this training as a benefit and a reason to stay. Digitised processes help with planning—e.g. warehouse layouts and the pre-experience.
Ask: How can we improve customer and employee outcomes via immersive training?
4. Shortened supply chain using nano fulfilment centres
Using automation, the evolution of dark stores provides fulfilment in urban areas, and companies are seeking new footholds to create familiarity and shorten the supply chain. US-based Kroger is one example. An Australian beverage company is using it for efficiency.
In the future, automation at the edge, e.g. continuous manufacturing at the local neighbourhood level, could disrupt smaller convenience.
Why this matters: This can solve last-mile delivery, shorten the supply chain and help with food sustainability and product recalls. Investment in robotics might lead to new partnerships.
Ask: How does this help us get closer to the customer and maximise our assets?
5. Climate Insurance (or not)
Extreme weather and climate challenges are causing business losses and a lack of transportation insurance. The top cause is extreme weather. An average of 1400 containers go overboard, and Alliance Global estimates it contributed to 25% of vessel losses in 2021.
Why this matters: The fear of being uninsurable and how the insurance industry will respond. Port infrastructure will need to be redesigned to mitigate rising sea losses. One solution is digital twins to help a ship move from A to B.
Ask: Will insurers be willing to cover its premiums? Will firms go without insurance?
6. Labour development, upheavals and shortages
Warehousing is becoming robotic and worker-friendly — better daylight, basketball courts— to encourage new types of workers and technologies.
To reduce mundane tasks, Amazon is developing co-bots to help with worker safety. Robots can monitor how humans work and mimic behaviours, potentially becoming great partners.
Technology will reduce warehouse sizes and create more grid layouts. Drones also mean the creation of new infrastructure. We might see a hub-and-spoke model with future parcel deliveries, with drones taking off from trucks. Autonomous vehicles will make long-haul deliveries, and humans will make the short haul.
Why this matters: Sophisticated warehouse design will move into fulfilment, but restricted space is challenging.
Ask: What does this mean for the human and infrastructure in place?
7. Digital twins help firms prepare for global supply challenges
Digital twins offer predictive insights to help organisations and governments better prepare for disruption and provide an end-to-end look at the supply chain. This could be paired with digital passports. BMW has several digital factories already optimising factory production.
Why this matters: Optimising transport routes, e.g. congestion and breakdowns, to deliver products faster.
Ask: How can we leverage data to maximise and extract value along the supply chain?
8. Resilience through diversification
Reglobalisation, diversification and procurement are this year’s key themes.
Supplier rationalisation and nearshoring (Bringing talent closer to home) in light of climate change and COVID will continue as countries realise their over-dependency.
Savills near shoring index puts Vietnam and Ukraine for manufacturing and tech talent as the top challenges for firms.
Why this matters: ESG and regulation are pushing firms to diversify where goods come from and the workforce. Partnering with developing countries can provide new income.
Ask: How can innovations like smart contracts help move faster?
Key questions
What information is needed to track, monitor and provide real-time end-to-end transparency?
What is the inroad to urban fulfilment?
What predictive metrics can be used via digital twins?
What training is required to recruit and nurture talent for humans and co-bots?
What changes will make the workplace better?
What level of automation and technology is needed?
How can we use our consumer base to identify which trends you should respond to first?