Macroeconomic changes and shifts in trade patterns have their impact on global supply chains, providing both opportunities and challenges, according to Han Nabben, global head of marketing and communications at Damco.
In a recent blog post, Nabben said companies need to prepare for “the new normal” in supply chain management, in which the one thing constant is change. Staying up-to-date on changes in trade patterns—in GDP growth or in customer behavior—to pinpoint growth opportunities in logistics “is more important than ever,” he added.
He identifies several trends in logistics that are directly or indirectly caused by changes in these trade patterns.
One is that “growth patterns” will become harder to pin down. “Growth in the logistics industry is no longer driven by exports from Asia to North America and from Asia to Europe. It will come from elsewhere, and will be more fragmented, more unpredictable and more volatile. Economic and population growth will be increasingly centered in cities. Infrastructure is becoming a major determinant for growth,” he said.
Another is the growing demand for “flexibility” of the logistics industry to adapt easily to unexpected changes and circumstances. This means it must be able to “meet consumer’s requirements at multiple locations with multiple transport modes at different times.”
The third trend is “globalization,” where “international, mature and emerging markets have become a part of the overall business growth strategy for many companies.”
Other trends include “near shoring,” where increasing amounts of manufacturing are being brought closer to the end-user; and “multichannel sourcing,” in which end-consumers increasingly source via multiple channels, ranging from brick and mortar shops to e-commerce.
“The logistics industry needs to support multichannel strategies of their customers,” said Nabben.
Other factors contributing to the shifting trading landscape:
- Information technology:The growing complexity and dynamism of supply chains requires increasingly advanced IT solutions.
- Continuity: To secure speed to market and reduce risk of delays, alternative transport modes and routes are required to support the continuing trend of outsourcing of logistics services.
- Sustainability: Customers increasingly prefer products that are made and sourced with the least impact on the environment and society.
- Compliance: Anti-bribery and corruption legislation is having an increasing impact on supply chains.
- Partnerships: Manufacturers continuously search for supply chain innovations and gains through partnerships with logistic service providers.
- End-to-end visibility: Complete visibility of the entire supply chain aspires to achieve true demand-driven planning, allowing efficient response to changes in sourcing, supply, capacity, and demand.
- Complexity: Supply chains are becoming increasingly complex and dynamic, with sourcing locations being changed increasingly quickly and purchase orders becoming smaller and more frequent.
Photo: Jerzy Durczak
