How Supply Chains Must Evolve to Meet 2024 Expectations

How Supply Chains Must Evolve to Meet 2024 Expectations

By: Mike McClure, Caitlin Vorlicek & Dorothy Shapiro

Our Supply Chain & Logistics team was busy at events across the country last quarter, with multiple team members attending both Manifest and MODEX 2024. Coming out of two of the industry’s biggest conferences, our team couldn’t help but reflect upon a few key interrelated takeaways: the staying power of ecommerce, the growing importance of data utilization, and the resulting rise of intelligent warehouse technology.

The Sustained Era of Ecommerce

Post-pandemic consumers have continued to shop online, despite the resurgence in brick & mortar retail. Consumers now expect a seamless integration between their online and offline experiences. Expectations of supply chains have understandably evolved alongside this shift; convenience, same-day delivery, in store pick-up options, and accurate tracking have all become baseline expectations, not perks. Shoppers now expect advertised goods to be in stock and available, orders to be fulfilled efficiently, and returns to be processed easily.

DTC-native brands have an advantage in delivering (no pun intended!) on this elevated expectation – their supply chains were established in the era of ecommerce. However, large retailers and brands with incumbent supply chains have a long way to go. From market supply and demand analysis to efficient warehousing, inventory management, and pick-and-packing at the parcel level, every stage of the supply chain must be optimized to ensure seamless order fulfillment and customer satisfaction. Technology will play an important role in helping companies achieve this transformation, and more and more vendors are playing into this tailwind with solutions tailored to ecommerce environments. Whether it’s warehouse optimization (Logiwa, Takt), logistics tech focused on faster deliveries (SmartKargo, ShipERP), or reverse logistics enablement (ReverseLogix), we couldn’t turn around without running into a technology solution designed to help large retailers and brands adapt. And from our conversations with enterprises, we believe supply chains will increasingly leverage purpose-built technology to thrive in the rapidly evolving and expanding ecommerce marketplace.

Data Utilization > Data Visibility

Data visibility has been a growing theme in supply chains for years, and many large companies – FourKites, Project44, MacroPoint, Tive, etc. – have thrived by enabling expanded access to data. Coming out of Manifest though, our team felt a growing emphasis not just on enabling data visibility, but also on ensuring the accuracy and actionability of that underlying data.

Successful supply chain leaders must be sure their data is airtight. Many adopt automated data entry and reconciliation solutions to reduce human error, and tools like automated data capture, trend analysis, and data validation algorithms to bolster the accuracy of a company’s internal supply chain data. Just as important, though, is vetting the accuracy of the data being inputted into supply chain operations from external vendors. Time and again, we have heard from supply chain leaders and entrepreneurs that data that is “almost right” might as well be missing entirely. With many vendors offering different approaches to tracking their supply chain, customers are no longer sure which data source(s) to trust. Today’s supply chain leaders are laser-focused not only on the aggregation of data, but also on the precision of that data. We believe software and data vendors will have to react accordingly, and new capabilities will emerge to cleans and de-duplicate data as sources continue to proliferate.

Supply chain leaders are also increasingly focused on the actionability of their data. While data itself is in many ways the bedrock of successful supply chain operations, the business intelligence (“BI”) tools that provide a lens into this data are becoming commoditized. Where solutions can deliver a more durable ROI is by making one’s data immediately actionable. In other words, supply chain stakeholders not only want to see their data, they also want to be able to use it in real-time. For this reason, we are seeing solutions like Gnosis Freight and Vizion emerge, allowing customers to act on their data directly in their own platform or through integrations with other solutions.

The Intelligent Warehouse

The combination of evolving data expectations and capabilities, alongside lasting consumer appetite for ecommerce, has in turn presented an opportunity for warehouses and fulfillment centers to leverage modern technology to streamline operations. In addition to heightening consumer expectations, labor shortages and rising turnover rates are pressuring warehouses to operate with maximum efficiency and accuracy – further emphasizing the need for intelligent warehousing technology. For many, the phrase “smart warehouse” might conjure images of massive robots, automated storing and retrieval systems (“AS/RS”), and autonomous forklifts. While these hardware solutions do play a role in warehouse optimization, there are a growing number of software solutions leveraging artificial intelligence (“AI”) to modernize warehouse processes as well.

For instance, AI can be used for more accurate demand planning. Companies like Impact Analytics, where Sageview led a $40m growth financing round earlier this year, enable warehouses to optimize inventory levels, minimize stockouts, and ensure timely replenishment. Human-centric automation solutions – such as Autoscheduler and Ox – can be used to enhance frontline operations and drive increased value from lower labor supply. Similarly, AI-driven systems can be used to enhance worker safety by detecting safety hazards and predicting potential accidents in real time, such as Protex AI and Voxel. As supply chain leaders increasingly expect warehouses to accomplish more with less, these and other AI-powered intelligent solutions will become increasingly valuable tools for maximizing warehouse efficiency.

Conclusion

Our team is coming out of Q1 and these major industry conferences with an enthusiastic and optimistic outlook for supply chain and logistics technology. Even as the initial frenzy of COVID-era disruptions fades, tailwinds for innovation remain robust. Evolving consumer expectations, changing regulatory requirements, and continued instability are just a few forces that continue to push supply chains to innovate. Our team loves nothing more than to be a part of this transformation through our current investments in supply chain-focused companies (Drivewyze, Specright, and Impact Analytics), and we look forward to partnering with additional ambitious teams leading high-growth companies in the supply chain and logistics ecosystem!