Ten Supply Chain and Technological Trends To Keep an Eye On in 2023

In Indonesia, the logistics industry is expected to see significant growth in the coming years, with the government implementing measures to improve infrastructure and promote the sector’s development. Adopting advanced technologies such as AI and blockchain will also enhance efficiency and address the region’s long-standing challenges. It is because traditional logistics methods have proven inadequate in addressing unprecedented supply chain disruptions, rising logistics costs, inefficient processes, and rapidly changing customer expectations. As we move forward, let’s examine some supply chain and technology trends that will gain traction in 2023.

Automation of Last-mile Processes

Imagine being able to seamlessly orchestrate deliveries between your own fleet and 3PLs (third-party logistics providers). That’s what smart logistics management tools can exactly do for your business. These tools use predefined allocation logic to automate the carrier selection process, considering cost, delivery time, payment type, proximity to the customer, and other parameters. Not only does this saves a business person-hours, but it also ensures the deliveries are on time.

More Use of Predictive Intelligence

The COVID-19 pandemic showed us just how important it is to have a resilient supply chain. And one way to make your supply chain and logistics operations more resilient is by using analytics to predict outcomes. This can help businesses better manage delays, risks, emergencies, and other unexpected situations. In fact, according to Gartner, by 2024, 75% of organizations will invest in data and analytics to avoid business failure.

Artificial Intelligence and Machine Learning for Enhanced Efficiency

According to a Gartner report, it is predicted that by 2025, AI will have the greatest impact on global supply chains. Furthermore, 28% of respondents indicated they are on the brink of utilizing AI in their logistics operations to improve process efficiencies. Using AI and ML allows companies to create self-governed supply chains while reducing costs.

Greater Adoption of Blockchain

Blockchain will gradually become crucial in addressing trust, transparency, reliability, and traceability issues within the logistics and supply chain industry. This technology benefits supply chain processes that require efficiency and enables smart contract-based payment processes, which are vital in cross-border eCommerce. Ensuring trust, promoting financial transparency, and making ledgers tamper-proof will be the key factors in the deployment of Blockchain in logistics, which will increase over time. In Indonesia, specifically, this technology is the answer to improve transparency and traceability in the supply chain ecosystem, in context to its Sharia Economy Masterplan (SEM).

Consolidation through Platformization

The root cause of most of the sector’s challenges is operational silos. To combat this, companies are increasingly turning to a platform approach. Platformization ensures smooth collaboration with freight forwarders and internal teams, combines all container movements, shares real-time updates, and actively tracks additional charges using a single platform.

Greater Collaboration Among Cross-Border Logistics Players

Cross-border eCommerce is booming and is projected to reach a staggering 2,248.57 Bn by 2026. Despite this growth, the lack of operational visibility in the industry can lead to costly inefficiencies, missed delivery deadlines, and damaged reputations. To tackle these challenges and foster greater collaboration, logistics stakeholders such as manufacturers, retailers, freight forwarders, shipping lines, and logistics service providers will turn to advanced logistics management platforms.

Increased Dependence on Multiple Logistics Service Providers

It’s no secret that many Fortune 500 companies rely on third-party logistics (3PL) providers to handle logistics and supply chain needs. In fact, nearly 90% of these companies turn to 3PLs for assistance. Following the growth of eCommerce, logistics service providers have evolved to offer more services and features. Partnering with multiple logistics service providers can improve delivery reliability, expand service offerings, speed up delivery times, and cost-effectively manage fluctuating demand. According to industry experts at Gartner, logistics providers with comprehensive service portfolios worldwide are better equipped to solve complex challenges, bring innovation to businesses, and maximize cost and service benefits. Expect a continued trend of companies relying on multiple logistics providers in the coming year, along with a surge in demand for 3PL orchestration solutions that streamline the management of any number of logistics providers through a single window.

Emphasis on the Economic Advantages of Sustainability

Sustainability has become increasingly important. Approximately 23% of companies agree that investor pressure to enhance supply chain sustainability has increased. The Indonesian government has taken concrete steps to support efforts to tackle the effects of climate change, including by increasing the country’s emissions-reduction target from 29% to 31.89% on its own and 43.2% with international support by 2030. The government has also implemented policies to promote the use of electric vehicles in logistics, recognizing the potential for cost savings. Companies worldwide are seeing significant cost savings by reducing miles traveled through intelligent route planning, dynamic order batching, advanced territory optimization, and route optimization, and prioritizing more environmentally-friendly delivery methods such as electric vehicles and bicycles for last-mile deliveries. More companies will opt for the eco-friendly route to improve delivery profitability in the future and reduce carbon emissions.

The Need To Mitigate Bottom-Line Disruptions

Having complete visibility across the whole delivery process will soon be the norm. Operational costs from freight rates, transportation risks, and last-mile deliveries are the most disruptive to the bottom line. This is why having visibility, the ability to automate, and options for intelligent route planning and optimization is crucial to modern logistics operations. This effectively comes down to data and the ability to track logistics processes in real time.

Increased Focus On End-Customer Experience

Customers have always been the drivers of competition. Whether the business is a retailer, manufacturer, logistics service provider, or eCommerce provider, investing in technologies that enhance the customer experience is now a must. This entails scaling on-time deliveries, boosting transparency, or simply shortening delivery turnaround time. It also provides business benefits. Smart last-mile logistics management tools allow customers to request rescheduling deliveries. In such a way, delivery stakeholders are aware and able to pivot in time, avoiding additional spending on reattempts.

With the right tools, businesses can optimize logistics operations, improve customer satisfaction, and drive growth. AI, ML, automation, and predictive intelligence-powered smart logistics management tools empower businesses to go from a reactive to a proactive mode and better position themselves to take advantage of these trends.

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