Happy New Year! On to 2021…bold predictions for a better or simply a “normal” year!

Happy first week of 2021! I hope you all had a safe, happy and most importantly healthy holiday season. While the latest trip around the sun has challenged us many ways, there is a light at the end of the tunnel and hopefully better times ahead. Better, simply meaning more normal times! But let’s look at some BOLD predictions for what 2021 might hold in store for us.

Blanket prediction, with multiple Covid 19 vaccines having been approved and now getting into arms, the globe will move towards controlling the virus and allowing the world to put this pandemic behind us. Let’s hope this comes to fruition sooner rather than later. But what else can we expect?

• Stores are not dead…they’re continuing to evolve. Okay I might sound like a broken record, and yes this trend is not unique to 2021. But what is going to be different is the impact Covid 19 had on retail as a whole and stores in particular. It has been well documented of how the lock downs adversely impacted physical stores, restaurants, bars and a plethora of service business that could not be done over Zoom, Teams or Google meet. From a retailer perspective, 2020 accelerated a number of store shuttering, by some accounts doubling the closures from 2019. While brands like GNC, Pier 1 and Chico’s are closing stores, you still see other players such as Amazon, Warby Parker, Bonobos, Indochino and Peleton opening physical locations. We are not seeing the end of the store, we are seeing the accelerated evolution of how the physical store is being leveraged. Yes it will continue to be used to attract and drive traffic to come in and acquire inventory. But will take on an ever growing role – service center (think Apple genius bar), a return center (look at Kohl’s and what they have done with Amazon) or a micro fulfillment node (look for grocers to push this usage). As we emerge from the lockdowns, savvy brands and retailers will continue to rethink and retool how stores fit into their overall strategy. They will not be blindly shuttering those assets.
• Sustainability and the circular economy drives consumer behavior. There is no doubt that what we saw in 2020 was a massive acceleration when it came to ecommerce. And with those mountains of online ordering creating a tsunami of goods being delivered to our front doors, this will invariably lead to a return tidal wave of coming the other way. The amount of returns and how retailers and brands will handle this volume is potentially more than a headache for the industry. Forward thinking retailers will see this as part of a larger theme – sustainability. Returns are a part of the circular economy that has been growing. It is not only the amount of product coming back into the supply chain, but also how retailers will strategically address this as their overall go to market. How do retailers and brands ensure that sustainability is not an afterthought but is integrated throughout the business? Consumers’ sustainability awareness, are deciding factors in how they spend their money. Retailers and brands need to keep this in mind with regards to how they approach all aspects of their businesses – from sourcing to returns.
• Automation gets closer to the consumer. Yes I know, the robots have been here for a while now. But we will automation start getting closer to the end consumer. Granted robotics have already made their way into our homes – see the Roomba. When it comes to our supply chains, automation has been a presence for decades. Starting on the manufacturing floor and now pushing into the sourcing, warehousing and distribution parts of the supply chain. Look for automation to push into consumer spaces in 2021. From sanitization robots keeping public spaces hygienic, robots focusing on security and automation that will function amongst the public to complete order picking or store replenishment. We will also see more usage of automation in the last mile fulfillment, from Kroger to DHL, companies will seek to leverage autonomous robots and drones, to get our stuff to us when and where we want it. Look for automation to become a greater part of our lives, from our homes, to how we get products delivered to our doors and when we are out in public. Hopefully this is not the start of Skynet…
• Not your parents’ point of sale. My first prediction is the store is not going away it is changing…same can be said about point of sale (POS). The days of static, fixed cash registers has long been eclipsed by mobile and cloud based POS. But even this is evolving. POS will become untethered. Only requiring an internet connection and digital interface, modern POS will occur almost anywhere these two tools are present. You might say, so what, we already knew this…but this will expand into social media. We are already seeing a surge into Facebook, Instagram and TikTok to allow for transactions to occur on these platforms. We are finally seeing it come to content via your television (I remember working on a report in 1998 while at Forrester talking about this possibility). We are not far from science fiction shopping where QR codes and other scannable objects will be sprinkled through out our physical world allowing us to interact and shop almost anywhere. Advertisement on a billboard, scan the QR code to purchase. Walking through a park and there is a nice flower arrangement in a planter, take a picture via the PictureThis app and connect with local florists that can sell you the arrangement or individual plants. Our “limitations” to participate in commerce will continue to crumble, as POS becomes omni present. Retailers and brands need to be prepared to service demand anywhere and anytime…in locations not imaginable a few years ago.

Let’s hope that 2021 proves to be all that we hope for. Especially with regards to a wide spread vaccine. Captain obvious comment – but the ability to spread the vaccine globally will be a massive driver to getting the Covid 19 nightmare behind us. Fingers crossed this continues to march towards reality in the first half of 2021. What we did learn from 2020 was the major shock to our system accelerated the thinning of the herd. It also will reveal with brands, retailers and supply chains are best prepared for 2021 and beyond.

Happy New Year to everyone. Here is to a boring and normal 2021.

Happy New Year 2016! Looking forward to a sweet 16 year for Supply Chains

Happy New Year to all, I hope that your 2016 is already off to a great start. Looking forward to this year there are some exiting changes as well and continued progress in other areas. Here are some trends we are focusing on for 2016:

• Retailers will continue to seek new solutions and services to empower their stores: in 2015 we started seeing greater efforts and emphasis on the role of brick and mortar stores. Written off as irrelevant, even a burden a few years ago, retailers’ views of their real estate assets has taken a turn. Brick and mortar stores’ role in the retail supply chain will continue to grow in importance. This momentum is due to the evolution of how stores are being leveraged by retailers. Embracing show rooming, leveraging stores as distribution centers, creating contextual experiences within the store to drive traffic to name a few trends, are all making stores matter again. Most significantly the redefinition of the store’s role allows traditional retail to tackle the pure eCommerce players. 2016 will continue to see this evolution of the store. Gaining improved inventory visibility, empowering store associates with greater information, enhanced operational data to allow more business processes to be tested and adopted are all areas where retailers will be seeking appropriate solutions. Look for retailers to lean on their solution and service providers to bring them the necessary technology and business processes that can allow retailers to continue to transform their physical assets. Solution and service providers must work with their retail clients to not only provide technology or business process solutions, but to also offer strategic insights and ideas. Technology is not the panacea but the enabler for new ideas and processes.
• Logistics continues to feel the strain: Your supply chain is only as strong as your ability to minimize the friction associated with moving inventory and products throughout your supply chain. This burden falls on logistics – rail, ocean, air, trucks even bicycles and donkeys are all part of our logistical network. This past holiday season witnessed another situation where the strain on the logistics network can rear its ugly head. eCommerce retailer Jet.com had to apologize to some of their clients for falling short on being able to deliver products in time for Christmas. Logistic giants FedEx and UPS had to jump through some hoops to meet the delivery crush. Coincidentally, over the holidays,  eCommerce giant Amazon announced it is exploring adding an air cargo arm to their distribution assets. While eCommerce is growing at a steady 1o-15% year over year since 2012, the strain it is placing on logistics is disproportionate – due in large part to seasonal aspect of certain package delivery. The strain is also starting to pop up in places such as college campus mail rooms where they are being overwhelmed by services such as Amazon Prime. This trend is not going to disappear once the calendar flips to 2016. Transportation and warehousing will continue to feel the strain of keeping up with the accelerated evolution of supply chain in 2016. Look for continued efforts from service and solution providers to work with their customers to continue to find innovate manners to handle the crush of logistics.
• Explosion of disruptive technologies continue to grow: Whether it is IoT (internet of things), robotics, drones, 3d printing or virtual reality to name a few, these disruptive technologies will continue to grow in importance within supply chains. IoT is already well entrenched within manufacturing and logistics, in 2016 look for this technology to grow in importance with regards to the retail supply chain. Robotics are also well know within manufacturing, but look for this technology to play a greater role in places such as customer service and inventory management in retail. Drones are getting much attention, somewhat negative, post holidays as those who unwrapped them as gifts are wondering if they need to register with the FAA, there was even a near disaster during a World Cup skiing race when a drone literally fell from the sky, click here for video. Reality is drones have a role to play in our supply chains – the genie is out of the bottle and properly leveraged they can reduce friction from our supply chains. As technology giants Amazon and Google continue to push on how to leverage these machines to address last mile delivery. Additive manufacturing will continue to play a role in the manufacturing process, but will also create new business models. Companies such as Lowes are already experimenting with 3D printers in their stores, allowing customers to have custom products manufactured on site.  3D printing is already playing a significant role with manufacturers such as Airbus and Boeing, but we are only at the cusp of how this disruptive technology will play in our supply chains. Finally virtual reality will continue to play a role in places such as retail – allowing customers to experience product as well as in supply chain design and CAD software. As mentioned above, we see warehousing and other logistics being strained as more companies look to add more of these assets, leveraging virtual reality allows for better testing and understanding of how these capex projects will turn out. Imagine being able to test and try out a full scaled model of a plant or warehouse via virtual reality. Look for these technologies and others continue to grow in importance within our supply chains.

Every year at this time it is always interesting to look back and see what the prior year held for us and more fun to look forward to the coming year. As I have become more of an optimist as I have grown older (is that normal?) I am looking forward to 2016 and some of continued evolution of these technologies and trends.

Happy New Year to you and your loved ones!

Hardware is back! Impacts on supply chain from an old friend.

Hardware has been pushed to the back pages a lot of times – what is cool is the software that sits on the hardware. We don’t want to be bothered with thinking of servers, smartphones, computers, tablets, touch screens, televisions, appliances etc etc…we just want our apps! But hardware is making a come back, at least in the cool category. There are some changes coming to your supply chain…that being powered by changing hardware.

• Robotics – okay okay, I know that automated factories is nothing new…but we are seeing a new surge in how robots are being leveraged within the factory and warehouse.  It is nothing new to see robots on assembly lines. However companies like Kiva Systems have pushed robotics deeper into the supply
  

  Coming to a supply chain near you.

  chain. Their orange robots gained fame by being integral in Zappos’ warehousing. The robots did the majority of pick and pack for the online shoe company. The joke was if you saw a light in the Zappos distribution center it was bad – a human was most likely fixing a robot! The horror…otherwise the robots did not need light…or a lunch break. But the robot influence is not limited at the warehouse or factory floor, companies like iRobot – best known for their Roomba robotic vacuum – offer a number of robotics for areas such as telemedicine and video collaboration. Think about the possibilities of this platform for such areas as after sales servicing. A technician could also have a telepresence robot that is tied back a veteran technician who could be located in one place but bring their expertise to numerous robots at once. Robots will also help do the 3D jobs – Dirty, Dangerous and Dull. Being able to off load these jobs to robots will free up the human for more valuable roles within the supply chain.

• Drones – one could argue that drones are a subsection of robots…and you would have grounds for an argument, but I think they deserve to be discussed separately. What makes them unique is that the drones I am speaking of are the robots that fly. Drones became a part of our vocabulary through their usage by the US military. From a commercial usage we got our first taste of the possibilities when Jeff Bezos of Amazon went on 60 Minutes a year ago and suggested that some day in the near future we might be getting our Amazon packages delivered by drones. While Bezos has since tempered his Amazon
  

  Don’t expect this to deliver your packages…but its little brother and sister.

  deliver via drone, we are starting to see actual usage of the technology to solve some logistics’ issues. DHL has started employing delivery drones to make deliveries to remote areas in Germany. Our supply chains have really only scratched the surface when it comes to using drones. We will continue to see them being leveraged for logistics but also to assist with tasks otherwise challenging to address.  Companies are looking to use drones to go “look” at potential maintenance issues in places that are difficult for humans to reach – for example, drones could inspect parts of oil facilities or factories that are difficult to access. Drones will play a greater role in our society and our supply chains. This time next year Santa Claus might very well be using drones to help him deliver his presents.

• 3d Printers – Last week I took my son to a 3d printer store, and it was great to see how a 7 year old reacted to seeing the printers making a wide array of “things.” Dinosaurs, building models, snow men and other shapes. What I saw was the ability to change how we manufacture, how we deal with spare parts inventory and even impact logistics. Bringing 3d printers to the manufacturing floor will offer new methods but can also expand the factory floor. Manufacturers could place 3d printers closer to the final customer for products that might require some customization or assembly. One can imagine mobile 3d printing capabilities – allowing for true delaying of production and JIT (just in time). Companies like Nike are already experimenting with using 3d printers to make their sneakers. A customer could walk into a Nike retailer, customize a shoe and have it printed on site. True customization. With regards to spare parts, companies such as Airbus are looking to leverage 3d printers to keep certain plane models in service longer. Their vision is to leverage 3d printers to produce specific spare parts that would otherwise not be cost effective to continue to manufacture. When it comes to logistics – we are always trying to solve our last mile issue with regards to delivery. What if your local Staples or OfficeMax had a 3d printer and you could have some of our deliveries sent to the store and printed? Between drones and 3d printers we might have competing hardware solutions for the last mile delivery challenge!
• Wearables – Mobility has had a deep impact on our supply chains already. This should come as no surprise as the BYOD (bring your own device) wave has swept over businesses in general. But I am not just speaking of greater usage of smartphones and tablets in our supply chains. Wearables are the next evolution – dedicated, connected items that we wear. The most common wearable is Google glass. While the jury remains out as to whether or not it will catch on, the genie is out of the bottle when it comes to growing usage of wearables. We are seeing the usage of Google glass in the factory, companies like Plex Systems are demonstrating how they are integrating the hardware with their solutions to add efficiencies on the factory floor.

  Other solution providers like Unvired are leveraging Google glass into their warehouse solutions – bringing greater efficiencies to the pick – pack process. Warehouse workers, using the Google glass hardware coupled with the Unvired solution have hands free access to vital data that makes their job more efficient. Look for wearables to impact a growing number of other parts of our supply chains such as logistics, maintenance and service, POS (point of sale) to name a few. Wearables offer greater mobile intelligence, think of them as adding this enhanced connectivity at the edges of the supply chain network. Look for this added capability to open new business models and capabilities.

• Sensors – The internet of things (IoT) has permeated many of today’s headlines. Pundits speak of all the wonderful things that will come from being able to connect an every growing part of our infrastructure and supply chain. But what is one of the underlying technologies to make this possible? That’s right, the inexpensive and smart sensors – the hardware – needed to make this connectivity possible. Companies like GE are working to infuse a greater number of sensors into their products from locomotives to wind turbines to airplane engines. The sensors throw off a wide array of data allowing for better monitoring of the assets, usage and network optimization. As these sensors continue to drop in price – look for their usability to be expanded to a greater number of assets and products.  Sensors and IoT hold tremendous potential for driving greater network optimization for supply chains – providing the necessary solutions and hardware to achieve greater network visibility. And much like wearables – pushing control and intelligence to the edges of the network.

These hardware evolutions have and will continue to drive innovations in our supply chains. Of course these are all tied into software and intelligence that make the hardware “smart” and useful. Reality is the line between hardware and software has blurred over the past few years and will continue to do so. But companies need to think about reinvesting in hardware to take advantage of these new innovative tools.