Supply Chain and Logistics Trends 2016

Being innovative, shaping change – this guiding theme of the LogiMAT 2016 is a rough outline of what will await us in the coming year. Logistics and supply chain managers will be tasked with actively and innovatively shaping operational change resulting from the idea of “instantness”, ongoing digitization, the industry 4.0 revolution, as well as the transition to agile management. This does not simply pose a challenge, but even more so, a great opportunity. The following offers an overview of the trends to watch within the supply chain industry in 2016.

Fast, faster, now: now-delivery

Even though it has been trending in the logistics industry for quite some time, same-day delivery might already become yesterday’s news in 2016, without ever being fully implemented. Developments may take us from same-day delivery services to now-delivery, meaning delivery of goods ordered via the internet within half an hour – that is what Amazon promises with its new delivery drone. There is not really a distinction between same-day delivery and now-delivery, because even delivery on the same day is not yet fully developed regarding its efficiency. In 2016, some pilot users will be expecting delivery drones to land on their doorsteps just shortly after clicking the ‘order‘ button.

Augmented reality in logistics

Smart glasses extend reality with digital information, thus creating an “augmented reality” for the user. In my outlook for supply chain trends in 2015 on the German blog of the German National Logistics Association (BVL), I suspected we would not just have prototypes at the end of 2015, but real world application examples on this topic. This prediction came true, since smart glasses are now being used in the picking and process optimization through “pick-by-vision” at Volkswagen. The “smart factory” or “smart warehouse” is coming closer and closer to becoming a widespread reality and we will see further examples of this in 2016.

Artificial intelligence enters the next phase

Artificial intelligence is no longer just a vision, but a trend into which huge investments are already being made. There is undeniably great potential in it. In 2015, for example, the question was still ‘whether’ we might see autonomous vehicles on the road. Now, ‘where’, ‘when’ and ‘how’ are questions for the future. We are still a long way from the so-called “highway pilot” driving a truck, but there are predictions that in 2020, about 10 million self-driving cars will already be traveling the roads. Furthermore, the manufacturing sector is driven by great innovations in the transportation industry in the sense of industry 4.0 and smart factories. However, the use of robotics alone does not result in progress, if there are no intelligent systems at a higher level which can make optimal decisions for the overall use of machines.

Agile is the new lean

In recent years, it felt like every other business consultant has mechanically recited the advantages of ‘lean management’ as the tool for lean and efficient organizational structures. Considering individualization and growing complexity, the lean concept is, however, no longer sufficient. Now and in the future, processes must rather be flexible and interactive, ensuring high quality delivery results. Agile management stands for the ability to cope with unforeseen events through the use of lightning-fast decision making. The implementation of this management approach requires more than just the commitment of those involved. An additional technological component is essential and enables people to deal with the unplannable.

Achieving agile leadership skills is actually more of a process than a trend and will accompany us through the year 2016.

Not just a silent companion

In logistics and supply chain management, these top trends will no longer be silent companions in 2016; they call for actual rethinking. The ability to accept innovations and take advantage of the synergy effects of individual movements is a core competence of future-oriented companies. Not losing sight of the essentials while filtering out what is personally important, requires our full attention and continual development. Nevertheless, we reach our limits time and again and need support, e.g. from operations research, which provides us with intelligent decision-making algorithms enabling us to keep up with today’s fast-paced operating environment.

Are you already prepared for the innovations and trends of 2016? What topics do you think will shape the upcoming year?

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This article was originally written by Ludger Schuh in German and was published on the BVL blog (National Logistics Association – Germany). It was was translated by the Inventory and Supply Chain Blog Team. The original article can be read here.