2020 Supply Chain Trends to Watch For
2019 has shown that technology adaption in supply chain is moving at a rapid pace. What is now available is
an array of technology solutions that can directly address the concerns of shippers. The key concerns for
shippers still remain cost reduction, enhancement of the customer experience and controlling market variables
that impact carrier pricing. With the adoption of technology, there has been a wider acceptance of cloud-based
technologies enabling technology platforms to be disconnected. Whether a shipper is using a cloud-based
WMS, TMS or another system, data integration can occur at multiple points within the order lifecycle creating
workflow automation. As an example, the TMS may receive a sales order from the ERP while receiving
shipment characteristics from the WMS. TMS may export carrier routing information back to the WMS for
staging or loading while also sending ship confirmation to the ERP to trigger advance ship notice or invoicing
to the customer.
2020 Supply ChainTrends
2020 is shaping up to be a year that sees companies that adopt technology pull ahead in the
field.
Digital Freight Brokerage
Just as Amazon has transformed the customer expectation, digital freight
brokerages are attempting to do the same using technology to match available capacity. Digital freight brokers
such as Uber Freight, Convoy, Loadsmart and others have invested heavily in technology that can match
available capacity to available loads. The acceptance and use of the digital freight brokers will continue.
However, the competition from traditional brokerage companies will heat up dramatically in 2020. Large
freight brokerages are leveraging their operational expertise with their engineered technology to stay ahead of
the digital freight brokers. Technology is transformative and when coupled with competitive strategies the
consumer wins. Competitive strategies like those deployed by Rockfarm’s freight brokerage solutions will
begin to transform the customer expectation and work to lower the logistics service expense for shippers.
Those differentiators include 100% acceptance and visibility to direct carrier cost all bundled up in a business
intelligence platform that can be leveraged for forecasting. 2020 will be round 1 in the battle for greater market
penetration for digital freight brokers and a real test of supremacy over the larger truckload brokerage
companies.
Recognition of the “True Cost to Serve”
Data – and not just data, but big Data -seems to have taken supply chains by storm as supply chain managers clamor to
report out ROI on new initiatives. Measuring cost and performance has become
a necessity as companies look for ways to reduce freight expenses. Whether a
shipper partner with a logistics service provider or manages their own business
intelligence (BI) platform, visibility to cost is now more accessible than ever. As
a result, identifying the true cost to serve the customer is visible and available to
be acted upon. The gap between sales contracts and actual expenses can now be
aligned, giving companies a direct line of sight to cost. Freight expense related to
raw materials or components can be aggregated with replenishment order and
outbound shipment expense to give an actual freight expense for all stages in the journey. In creating this
visibility, customer discussion can be collaborative in tone as efforts to reduce your freight expense can pay
dividends for your customer as well.
Containment of the “User” Experience in the Shipping Process
E-commerce has demonstrated that it can
automate the user experience. This experience traditionally includes routing, rating and tendering processes.
Automation in the TMS can now seamlessly eliminate user engagement in the TMS through workflow. The
routing process would typically engage a shipping coordinator which makes a decision to route on a
preselected set of carriers. Today however, the shipping process can be completely automated with business
rules that execute the routing decision with no user experience required. In addition, data trigger points
flowing to the ERP, OMS or WMS would also support back end workflow creating further automation within
the shipping process. Strategic deployment of business based rules can take effect and be managed in real time
as requirements change within the customer profile or as carrier capacity thresholds are met. The end result is
improved compliance and cost savings driven by a corporate strategy.
Machine Learning
Available technology is now leap frogging ahead to enlarge the pool of participants
available with our supply chain processes. A great example of this is within the carrier invoicing process. A
TMS provider may set up a carrier portal in an attempt to drive invoicing compliance within the TMS and
eliminate paper invoices. Today, that is not necessary. Machine Language and OCR software, paired together
through partners such as Hub Tran, orchestrates the conversion of a paper invoice into an electronic invoice
which can be imported into the TMS to trigger the freight audit & payment process to the carrier. In the
Rockfarm world, expanding our services to include a stand alone freight audit & payment service is now a
reality since paper invoices are no longer a resource burden with the automation afforded through machine
learning software. Setting a goal to eliminate the touch points found in “anything paper” opens the door to
drive complexity into your supply chain without expanding your existing resources.
Mexico Trade Lanes
With phase 1 of the China U.S. trade agreement taking a step forward there is still a great
deal of work to be completed before anyone can say we have an actual China trade agreement. As a result,
Mexico becomes an avenue to source additional products and components. Whether it is the production or
processing of parts and goods from Mexico, one thing is certain, the USMCA agreement passed in the U.S.
House of Representatives sets in motion one of the largest international trade deals ever ratified. The
movement of components south to Mexico for assembly, and produce and finished goods moving north to the
U.S. will continue to grow.
Contact Rock Farm Supply Chain Solutions for more information!
