“Today’s leading real-world retailer, Wal-Mart, uses software to power its logistics and distribution capabilities, which it has used to crush its competition.” Mark Andreesen, co-founder of Netscape and entrepreneur.
About this Guide:
Five years ago, the two-day shipping popularized by Amazon Prime was considered fast. Today, two-hour shipping is commonplace across America. Customers are demanding speed, and a 2017 report from market research firm L2inc found that “a quarter of shoppers would abandon a cart online if same-day shipping wasn’t available.”
Consumers receiving their near-instant deliveries are shut out from the increasingly complex supply chain system. Behind the scenes, retailers and distributors are sprinting to keep up with consumer preference – acquiring robotics companies and partnering with gig-economy delivery platforms to get merchandise to the consumer’s doorstep quickly. All of these advancements don’t come cheap: Amazon, for example, suffered a $7 billion loss in 2016 due to shipping issues, according to GeekWire analysis.
Customer preference is not only driving the need for supply chain efficiencies, the customer experience is increasingly becoming integrated into supply chain operations. Amazon, for example, has long used data from customer page views and buys histories to predict future purchase decisions. This information allows Amazon to control the stock at regional distribution centers so that there is a fast response when the customer makes the purchasing decision. Combined with a seamless integration with customer relationship management systems, Amazon optimizes the entire customer experience – from online cart to doorstep (and potentially back again).
This level of cross-channel supply chain optimization isn’t obtained overnight. It is a product of careful management along each step in the process, aided by an ever-increasing array of technologies focused on helping products get from point A to point B. But despite recent changes, the major impacts are still to come. New technologies are on the cusp of further dismantling traditional supply chain operations. Virtual reality, the Internet of Things (IoT), autonomous vehicles and ships for transportation, and other smart systems promise to increase the efficiency of the supply chain.
Optimizing at the margins matters.
This series of articles on supply chain technologies, trends, and the impact on the industry will emphasize both the value of optimizing at the margins and the value of instituting larger technological changes.
How Supply Chain Leaders Like Amazon Drive Efficiency
This series is composed of three articles. The first article visits the warehouse floor where modern-day operations and deliveries are adjusting to new technologies, such as automation, robotics, worker tracking systems, and AR-based vision picking.
How AI and Data Analytics Are Transforming the Supply Chain
The second article looks at the end-to-end supply chain process from the perspective of data capture and optimization. This article examines the latest trends in procurement, digital management systems, collaboration, and the role of emerging technologies in these overarching process management areas.
Technology Trends in Distribution and The Last Mile
The third and final article discusses the trends influencing the supply chain between the manufacturer and the consumer, such as smart truck routing systems and autonomous transportation, the gig economy, worker conditions, and the risks associated with new digital systems.
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