Supply Chain Management in 2019: Trends To Watch Out For

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Tags: Blog

Philip Andresen

Philip Andresen   26 February 2019

Supply Chain Management Trends 2019


  1. Distributed Inventory
  2. Digital Twin
  3. Supply Chain Resiliency and Risk Management
  4. Augmented Analytics
  5. Supply Chain Disruption: Brexit
  6. Are You Ready for 2019?

What are the new supply chain management trends set to take 2019 by storm? Buzzwords like digitization and globalization are still transforming the world. Concepts like AI, IoT and ecommerce are as relevant as ever. But what are the new game-changers that small and medium-sized businesses should be looking out for?

This post covers forward-thinking trends that you may not have heard of – yet – but should be keeping an eye on as they develop. Find out which future supply chain trends could transform your inventory and logistics operations in 2019 and beyond.


Distributed Inventory

Supply chain inventory delivery manAt what point does a long delivery time become a deal-breaker for your customers? Amazon, arguably the most prolific user of distributed inventory, has found that customers placing orders

with  three- to five-day delivery schedules are disappointed if the package doesn’t arrive within a couple of days. Put simply, customers are demanding a better service than they are openly asking (or paying) for.

A distributed inventory strategy aims to reduce the lead time between a customer placing an order and their product being delivered, while simultaneously reducing shipping costs. Distributors achieve this by storing inventory in multiple distribution centres strategically positioned near to customers, so they can fulfill orders quicker.

Whilst shorter delivery lead times can lead to higher levels of customer satisfaction and sales revenue, this needs to be weighed up against the cost of additional storage facilities. Distribution centres must be managed efficiently to control costs and really reap the rewards of distributed inventory. Check out inventory control techniques that can be employed, including accurate demand forecasting, to achieve this.

Digital Twin

Digital twin is a technology many suppliers and manufacturers will need to consider in the coming years. A ‘digital twin’ is essentially a digital replica of a product, process or service. The technology acts as a bridge between the digital world and physical reality by using sophisticated sensors on physical components to gather data, such as working conditions, real-time status, or position.

A real-life example of digital twin technology can already be seen in the automotive industry. Currently most car owners take their vehicle to a garage for a regular service or when something malfunctions. But with digital twin technology this will become a thing of the past. Instead, the vehicle’s digital twin will relay performance data on all its parts, predicting and reporting breakdowns before they happen and reducing the need for servicing unless the data predicts it’s required. Car owners will therefore reduce the risk of unexpected downtime and the cost of repairs.

This predictive data will also be extremely valuable to car garages and parts suppliers, as they will know ahead of time what car parts are about to fail so they can place orders ready for when the car arrives in the garage for repair. As a consequence they will be able to optimise stock levels, reduce lead times and improve overall efficiency and service levels.

Supply Chain Resiliency and Risk Management

Effective supply chain management is becoming increasingly important to reduce the risks associated with off-shoring, outsourcing, inter-dependencies within supply chains and product versatility. Forward-thinking companies are therefore focusing on measures to improve the resilience of their supply chain to mitigate potential risks.

These include:

  • Closely monitoring the external marketplace to identify potential external risks and having a good incident response plan in place to deal with disruption.
  • Increasing the flexibility of the supply chain by collaborating with suppliers and distributors to set up alternative supply routes, in case they are needed.
  • Ensuring a transparent supply chain, utilising automation technology to highlight potential risks within the supply chain itself and making it agile enough to adapt to external factors.

Augmented Analytics

Tablet with data stored in the cloudFor those of us who are not data scientists, making sense of statistical data often requires support from an IT specialist. But with augmented analytics, soon anyone will be able to extract reports from non-user-friendly databases – here’s how.

Augmented analytics focuses on a specific area of augmented intelligence: using machine learning to automate data analysis, preparation and sharing. Through advanced data manipulation and presentation processes, data is simplified to present clear results, allowing users to confidently make day-to-day decisions.

Augmented analytics helps your average business user visualise data in a way that’s easily understandable. In other words, this phenomenon will enable employees, whose main job is not in the field of statistics or analytics, to analyse and draw conclusions from data previously incomprehensible to the untrained eye.

Supply Chain Disruption: Brexit

These emerging trends aren’t the only factors that could impact your supply chain in 2019. At the same time the global climate is continually changing and affecting worldwide trade. Globalised supply chains rely on stable trade agreements, but unfortunately this may be a challenge for some markets in 2019 and beyond.

One striking example for UK businesses is Brexit. As the deadline for the UK’s exit from the European Union (EU) draws nearer (March 29, 2019), organisations across the UK and indeed Europe wait with increasing impatience to know what the final exit strategy will be. Whilst Theresa May battles to find a solution, a ‘no-deal’ Brexit is looming. This could leave businesses trading based on World Trade Organisation (WTO) rules and see the re-introduction of customs borders between the UK and all European countries. Another viable outcome could be the establishment of a ‘free trade area’ between the UK and the EU, but again the finer details of such a deal remain sketchy at best.

One thing is certain – businesses need to be planning now for all eventualities. When focusing on supply chain management, the most prepared organisations are identifying risks such as fluctuating exchange rates, increased trade tariffs, longer lead times for goods, and a shortage of EU workers. Many are looking to effective inventory optimisation processes to help make supply chains more agile and ready to deal with any external challenges that lie ahead.

Are You Ready for 2019?

The only thing constant is change. And we can be certain that 2019 will be another turbulent year both in terms of global macro trends, politics and economics, as well as changing consumer behavior and technological developments. So what can you do to set up your supply chain for a successful year? A good place to start is focusing on efficient inventory optimisation. By optimising your stock forecasting, ordering and replenishment processes you can free up valuable resources and quickly react to market changes. Download our Inventory Health Self-Assessment and evaluate the state of your inventory to see where you can make improvements.

Guide to Inventory Health Self-Assessment