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Top 3 Supply Chain Trends for 2018

Written by Robert Brice
January 24, 2018

2018 will see a continuation of overarching trends with a few surprises thrown in.

2018 will see a continuation of overarching trends — with a few surprises thrown in.

Last year saw yet more growth for the warehouse supply chain industry and a growing dependence on e-commerce signals increasing pressure on the supply chain.

Digital Commerce 360, citing recent Forrester data, believed that, by 2022, e-commerce will account for around 17-percent of all U.S. retail sales. This number is a sharp increase from the less than 13-percent stated in the 2017 edition of the report. Given this significantly revised estimate, it is not unreasonable to assume Forrester may be providing a conservative estimate, downplaying the potential of e-commerce yet again.

In addition to growing demand on the supply chain, technology is also advancing at a rapid pace and companies are struggling to stay cutting edge. The increasing performance advantages from current and emerging technologies will continue to fuel technological adaptation across the industry.

It is vital that, in their dash to compete, companies remember that while new hardware offers many opportunities, each has downsides as well, which can be dangerous if not properly handled.

1. Hiring Smart to Stay Ahead

Warehouses have an employee problem that needs to be addressed before it goes critical. According to the Bureau of Labor Statistics, the median age of workers in the transportation and warehousing industry is over 45. Warehousing and storage aren’t much better, at 38. In both cases, the smallest age bracket was also the youngest, the 16-19 year range.

On one level, this is not a problem as many companies need tenured, experienced employees in addition to smarter, more educated employees fresh from college with degrees and experience on newer mechanics. However, these numbers were also small – in some cases rivaling the number of employees 65 and older.

More troubling is the news regarding employee retention. Other data from BLS indicated that warehouse employees are leaving at a troubling rate. These tend to be the younger staff who see opportunities for better pay and hours elsewhere.

Companies wishing to avoid an aging workforce need to spend more on employee hiring, training, and retention. This will help prevent a worker shortage before it happens.

Investing in employee hiring, training and retention will be crucial to preventing a worker shortage in the warehouse.
Investing in employee hiring, training and retention will be crucial to preventing a worker shortage in the warehouse.

2. Preparing for the 24-Hour Continuous Workforce

New technology is enabling a more productive generation of workers: robots and smart tech. These machines do not need to sleep, eat, or even take a sick day. Currently, robots in the warehouse are limited to devices that sort and stack shelves. However, advancements in material robotics will push machines into a more central role.

Other factors to note are the rise of driverless cars and drones for delivery. While driverless vehicles are still evolving, new data suggests that the programs are already safer than human operators. A RAND Corporation study showcased that driverless car distrust is already more driven by prejudice than data. Driverless cars do not need to be perfect to present an improvement.

While their implementation would radically enhance shipping, drones are poised to reduce delivery time even further. Amazon Prime Air is already boasting delivery times of 30 minutes or less using its aerial technology. As drones become more prevalent, it is unknown just how dramatic this speed increase will be.

Arguably the largest problem facing both initiatives now is state legislatures, which have uneven laws in place to regulate the technology.

Supply chain trends include drone technology
Amazon Prime Air utilizes aerial drone technology to dramatically reduce delivery times.

3. Securing Big Data

The industrial internet of things is empowering a new level of data collection and reaction. Companies are getting insights instantly instead of having to wait weeks or months. Devices are wirelessly connected and increasingly used warehouse automation software lets managers correct mispicks as they occur before resources are wasted and reputation damaged.

However, this plethora of technology can be dangerous if not properly protected. Unencrypted networks with unlimited access are disasters waiting to happen. Symantec’s Internet Security Threat Report 2017 reported a worldwide increase in cyberattack frequency and ambition. Criminals know that companies are being pushed to innovate quickly and are rushing in to try to poke holes in network infrastructure. Unless warehouses want to join the hospitals and governments frequently now in the news, appropriate security measures must be taken.

Hiring a team of IT specialists — or at least one focused exclusively on cybersecurity — will help eliminate these problems. Ensure that each device that has access to the network is either company-owned or company controlled and set up security measures that only allow certain specialists to have access to the whole system.

The year 2018 will be shaped by evolving technology and societal trends. Some curves cannot be anticipated but most are reflections of longer patterns. Technology will become more mobile, more advanced, and more automated — there is no evidence of a trend shift here. An aging workforce will get older and, unless some bubble of the economy bursts, younger workers will continue to not be attracted to warehouse jobs. Cybersecurity, no longer an afterthought or sub-sector, will increase in importance as well.

Want to learn more about current technology trends impacting the warehouse and supply chain? Read about common problems in SCM and how mobile data collection can solve them, or download this free guide.