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  First Thoughts

    Dan Gilmore


    Supply Chain Digest

Feb. 8, 2018

The Gurus Are Back! 2019 Supply Chain Predictions Part 2

Marc Wulfraat, Mike Watson, David Schneider and Rich Sherman Offer their Prognostications, with Analyst Predictions Next Week


We're back as we have done for many years running with predictions for the year 2019 in supply from a virtual panel of supply chain gurus.

In fact, most of our prognosticators are back from 2018, selected again for this great honor - well, something of an honor - because in the past they have made insightful predictions and (very importantly) are able to get them emailed in before the deadline.

As I say every year, given how difficult it is to make predictions in this crazy world of supply chain, these prognostications are part prediction, part a discussion of trends, part some things to look out for - but it is all good, and I much enjoy these pieces every year.

Gilmore Says....

Next week: 2019 supply chain predictions from the analysts.

What do you say?

Click here to send us your comments

Last week, I summarized predictions from my friends Mike Regan, Gene Tyndall, and Chris Gopal.

Another group of prognosticators this week.


Marc Wulfraat of MWPVL International knows a lot about a lot - and is widely recognized for his knowledge of the Walmart and Amazon distribution networks.


He starts by noting that "Whether we realize it or not, we are living in a unique period of history that is profoundly impacting our world in several important ways" due to the growth of ecommerce."

Simply put: Today's busy consumer no longer has time to shop. That in turn las led to an "unprecedented rate of change taking place in the retail landscape."

For his first of six predictions, Wulfratt notes that few people realize that in 2018, Amazon surpassed Walmart in terms of US distribution footprint. At year-end 2018, MWPVL estimates that Amazon operated 141 million square feet of distribution and logistics infrastructure in the US versus Walmart's 132 million square feet.


With that threat from Amazon, Wulfraat notes that last year, Walmart sold off its Asda chain in the UK to Sainsbury's, leading Wulfraat to predict that "Walmart will likely continue to spin off under-performing rest of world assets to better defend its core North American business against rival Amazon. In particular, Walmart will focus significant resources on strengthening its on-line grocery business to better compete against Kroger and other regional supermarket chains."


Among other really great predictions, Wulfraat adds that the combination of the need for rapid delivery and a DC labor shortage will mean that "there will be an explosive increase in the demand for distribution automation technology over the forthcoming decade," adding that "The time to pursue automation is now and not when everyone else is jumping on the bandwagon as we quickly approach 2030."


Our friend and columnist Mike Watson of Opex Analytics is insightful as always. Watson says a combination of trends means "that 2019 will see a big rise in the development of custom supply chain apps" to supplement packaged software.

Then he adds that "My second prediction will find a lot of doubters and may generate some hate mail: I predict that in 2019 the hype will drain out of the use of Blockchain in the supply chain."


A Blockchain skeptic?

"I can see the value of Blockchain in Bitcoin where trust is a huge issue," Watkins explains. But "When it comes to the supply chain, I find it hard to believe that any outside entity has the right incentives to verify that a supplier shipped 20 cases of tomatoes to your local grocery store. So, we will still need the buyer and seller needing to go back and change the ledger to correct the cases of tomatoes shipped."


He adds "Going even further, I don't see that trust is the big issue in most supply chains.  That is, Walmart already trusts that its vendors will ship pretty much what they order and have systems for checking this."


I am fully supportive of Watson's views.


David Schneider of David K. Schneider & Associates sent in a number of good observations and predictions. Let's start with "Surface transportation in the US continues to have capacity constraints in lanes and modes that support energy and infrastructure improvements, even if the broad economy cools off." Tightness exists for flatbed trucks in many markets, he says, and "Temperature control carriers continue to see robust rates and solid demand for moving protein and produce, enough demand to drive up rates for non-food products and beer."


He also observes that "Lean inventories of technical and complex products continue as companies struggle with the just-in-time supply chains they built over the past decade," noting that "Technology does not overcome the challenge of managing these complex networks, as more of the problem is a lack of understanding and mental ability of the humans behind the networks. Because of a lack of adequate knowledge and ability in the human arts of relationship management and communications, most companies will see component inventories grow as customers increasingly demand on-time/as promised delivery."


The supply chain is still about tradeoffs, and always will be.


My friend Rich Sherman of Tata Consultancy Service and long-time supply chain industry observer sent his predictions in early. Among my favorites: "In 2019, the pace of maturity among digital technologies continues to grow. The distance between leaders and laggards also grows."


I sense the same thing, but still think we need more clarification of what digitization really is in supply chain. I am working on that.


With regard to Omnichannel, no longer  is it just about retail, Sherman says, adding that "Companies that are prepared for the ecosystem impact will thrive, while traditional brand stalwarts fall to the wayside."


Analytics also have become differentiators in terms of supply chain performance, Sherman adds, saying that "In 2019, Control Tower community ecosystem platforms will emerge from "under the radar” and companies will begin considering these supply network operating platforms for analytics- based and operational competitive leverage."


He concludes by noting that "The power is with the customer, e.g. "showrooming," price comparisons, reviews/reputation management, search engine optimization, and, most important, selection and convenience. The imperative: Being easy to do business with on steroids."


There is so much more, but I am out of space. All good stuff. Don't miss the full text of these guru predictions soon in our OnTarget newsletter.


Next week: 2019 supply chain predictions from the analysts.


Any reaction to the guru predictions? What resonates with you? What are some of your 2019 supply chain predictions? Let us know your thought at the Feedback section below.

Your Comments/Feedback




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