The evidence is undeniable: We’re living in the age of the technology-enabled supply chain. While the last 10 years have focused on physical assets and infrastructure, businesses are now shifting their attention – and dollars – to IT investments in logistics. These technologies are transforming the outdated and paper-driven logistics industry, as shippers leverage new tools to improve visibility, planning and responsiveness across their supply chains.
In a recent research initiative with Logistics Trends & Insights, AGL set out to uncover emerging trends in the supply chain technology market and which innovations have the greatest potential to drive value for businesses in the coming years. Our research revealed:
- Supply chain tech investments will jump nearly 20 percent.
Based on CSCMP market data, businesses spent an estimated $75 billion on supply chain technology in 2017, a figure that will rise 17 percent to an estimated $87.8 billion by 2022. The takeaway? For organizations with complex logistics requirements and processes, a technology-enabled supply chain is quickly becoming table stakes for survival. Businesses that put the right tools in place now can improve automation and visibility, allowing them to work more efficiently and react quickly when issues inevitably arise. Meanwhile, businesses that continue to use manual processes will struggle to meet increasingly complex fulfillment requirements and customer delivery expectations.
- Venture capital is fueling significant growth in emerging technologies.
Recognizing the vast potential in the supply chain market, investors are pouring money into tech startups that promise to usher the industry into the modern age. Between 2012 and 2017, supply chain and logistics tech firms received more than $8.4 billion in investments, many of them in tools that didn’t exist in previous investment cycles. For most organizations, emerging technologies like AI and machine learning are just entering the radar: One study found that 95 percent of companies aren’t fully capitalizing on digital technologies in their supply chains yet. Those that can unlock the power of disruptive technology will have a serious edge, however. For example, 74 percent of businesses that have adopted IoT in their supply chains report a related boost in revenue.
- Organizations have a vast array of new technologies at their fingertips.
Planning and execution tools. Customs support. Platforms redesigned to be more UX-friendly. The technologies coming onto the market today are as varied as the organizations that use them. While some may be swayed by flashy dashboards and packaging, tools that enable seamless data sharing and communication have the greatest potential to deliver ROI. A trusted supply chain partner with deep knowledge of the space can help businesses separate the real from the hype to build a high-functioning technology stack.
Advanced technologies are enjoying a long-overdue renaissance in the world of supply chains, giving businesses a choice to either embrace the new or get left behind. While plenty of tech companies are vying for shippers’ attention, those that combine a holistic platform with dedicated logistics knowledge and support offer the best chance at supply chain optimization.
Download a free copy of AGL’s “Supply Chain Investment Report” to get an inside look at the technologies poised to transform your operations for years to come.