Supply Chain Resurgence
Next-Gen Supply Chain Market to Hit $75B by 2030
Supply Chain 4.0 is ramping up—including 5G—and is slated to double in 10 years
The folks from LogisticsIQ are out with a close look at what they are calling the Next-Gen Supply Chain Market from 2019 to 2030. They are forecasting an eye-popping jump from $32 billion to $75 billion over the next ten years. The report also includes a new supply chain wrinkle: SCaaS supply chain as a service, saying that it’s a new business model that needs serious consideration.
Well, let’s see. Here excerpted for your review and consideration are the report’s key findings and forecasts.
Here comes Supply Chain 4.0
The lure of low-cost data storage and cloud computing has enabled organizations to capture and process large volumes of data in a short period of time in order to find valuable business insights and thus achieve end-to-end digitization of the supply chain.
Companies have started implementing technological changes in crucial logistics functions across various internal processes covering supply chain planning, procurement, sales & operational planning and customer services. Under “Strategy 2025” Deutsche Post DHL Group will be spending around EUR 2 billion on digitalization till 2025 and the digitalization investment is expected to lead to yearly benefits of at least EUR 1.5 billion by 2025.
As per LogisticsIQ™ latest study on “Next-Gen Supply Chain Market – Global Forecast to 2030”, this market is likely to reach $75 billion by 2030, from $32 billion in 2019. Enablers of digital supply chain include Artificial Intelligence (AI), 3D Printing, Cloud Computing, Big Data and Predictive Analytics, Robotics and Automation, Data Capture, Driverless Vehicles and Drones, Digital Twin, IoT, Blockchain, Augmented and Virtual Reality, Wearable & Mobile Devices and 5G connectivity.
Major drivers of a digital supply chain include demand for greater visibility and transparency in supply chain data process, faster adoption of internet of things (IoT), increasing investment in supply chain innovation, and huge demand from e-commerce.
Companies have started to embrace the digital revolution and are beginning to see the full potential of Supply Chain 4.0 resulting in real-time product visibility, strategic sourcing and optimization, end-to-end visibility, inventory visibility and optimization, real-time manufacturing asset intelligence, micro fulfillment, efficient last mile delivery and dynamic demand & supply synchronization are some of the major benefits of a digital supply chain.
The proliferation of technologies and opportunities around the digital supply chain really means companies need to look seriously at outsourcing these functions. This is going to be a major shift toward a new business model as supply chain as a service (SCaaS).
Rise of The Digital Supply Chain Market with IoT
Organizations are looking to leverage IoT in supply chain management by installing sensors and communication devices to achieve accurate asset tracking, improve inventory management, predictive maintenance, and establish demand driven supply chain network. Logistics companies have been using smart sensors to increase automated data collection and processing and GPS to improve visibility of shipments and improve fill-rate for quite some time now.
5G to Revolutionize NextGen Supply Chain Market
Widespread 5G rollout is expected to occur starting 2020, promising mobile networks with high data speeds, improved quality, and reduced latency. With growing number of smart devices being used in supply chain, there is a challenge to handle all on network which can be addressed by 5G to track the even smallest item, V2X communication and order fulfillment through Augmented Reality in warehouses.
5G is likely to enable massive amounts of data to be collected from remote and mobile sensors analyzed in real time to drive transportation management optimization and predictive analytics. Assuming that there will be at millions of mobile robots in more than 50K warehouses globally to pick, store, sort and transport the materials and everything will be connected through WMS/TMS. It makes really important to have a fast, stable and secure connection of 4G LTE or 5G.
In June 2019, AT&T Business, Samsung Austin Semiconductor, and Samsung Electronics America unveiled the first manufacturing-focused 5G Innovation Zone in America which explores using 5G in combination with LTE and Wi-Fi to illustrate key use cases like Automated Guided Vehicles, Digital Twin etc.
See related:
Update: Warehouse Automation
The Market, Its Tech & Its $27B Future
From $13 Billion in 2018 to $27 Billion by 2025, at a CAGR of 11.7%
Staying Hot: Logistics Market in Southeast Asia
It’s like China all over again! From $36B to $55B near term, Southeast Asia’s 600 million consumers acquiring a taste for e-commerce
East-West: Future of Global Logistics
East Asia, ASEAN, India, EU & North America
Artificial Intelligence and Supply Chain 4.0 Market
AI in supply chain is being used to address key challenges such as constant change in process, shorter product lifecycle, and increased demand uncertainty by analyzing complex data and forecast future demand.
AI is already being deployed in supply chain planning and optimization, including demand forecasting, inventory management, warehouse management, and fleet management. If supply chain has to be dynamic, responsive and interconnected to the ecosystem and processes the solutions like IBM® Sterling Supply Chain Suite gives you the end-to-end visibility, real-time insights and recommended actions to turn disruptions into opportunities for customer engagement, growth and profit.
The Age of Robotic (AGV, AMR, ASRS, Picking Robots) in Logistics 4.0 Market
The rise in e-commerce has led robots to enter warehouses, sorting centers, and are evening being deployed for micro-fulfillment and last-mile delivery.
Autonomous mobile robots (AMRs) are now being used in entire logistics chain, from order intake to customer delivery resulting in faster order fulfillment, greater order accuracy, reduced damages and improved labor productivity. Robots are also being used by large retailers such as Amazon, JD and Walmart to pack and sort items for Warehouse Automation.
Automated guided vehicles (AGV) are now being deployed in warehouses as autonomous forklifts, carts and pallet movers. Recent developments like Shopify acquiring 6 River Systems for $450m and Teradyne acquiring AutoGuide Mobile Robots & Mobile Industrial Robots (MiR) for $165m & $272M respectively are the outcomes behind this disruptive technology in the warehouses and logistics. Apart this, there have been some major M&A like KUKA (Midea Group) acquiring Swisslog, KION acquiring Dematic and Egemin, Toyota acquiring Vanderlande and Bastian Solutions, and Murata Machinery acquiring AGVE AB as well.
Deploying Last-Mile Delivery Market (LMD) with Delivery Robots and Drones
Last-mile service has been identified as key differentiator amongst competitors, from renowned retailers to local businesses. Drones and unmanned ground vehicles (UGV) are showing up in last mile delivery.
Amazon has been testing its Scout delivery robots to deliver packages and has planned to expand it on larger scale. FedEx collaborated with Pizza Hut to test FedEx’s SameDay Bot for pizza delivery. We can also see some similar trends related to delivery robots which are working towards last mile delivery issue and its solution.
Driverless delivery start-up Nuro just got a $940 million in financing from Japan’s SoftBank Vision Fund and has partnered with Kroger to deliver the groceries and with Domino’s to deliver the pizzas. KiwiBot is providing similar services for the university campus. The University of California at Berkeley and the University of California, Los Angeles were two of the earliest colleges to welcome the food delivery robots, KiwiBot.
Drones as an enabler for Future of Logistics
Companies such as DHL and Amazon are testing drones for last mile delivery. DHL has already tested Parcelcopter, a Microdrones md4-1000 UAV to deliver a package. Boeing has come up with unmanned electric vertical-takeoff-and-landing cargo air vehicle (CAV) that could deliver up to 227 kg of cargo within a fifteen- to thirty-kilometer radius.
In June 2019, Amazon has unveiled the latest version of its Prime Air delivery drone to deliver packages up to five pounds in 30 minutes. Drones are expected to have a major impact on supply chain not just for deliveries but warehouses too. In future drones could be the best way to track inventory anonymously and can even be used to move items quickly.
Walmart has already tested warehouse drones to catalog and manage inventory. PINC started developing PINC Air indoor inventory technology in 2014 based on its outdoor technology used for tracking inventory in equipment and storage yards. Apart this, the DroneScan system provides two revolutionary solutions to scanning products and pallets in warehouses. Either the Hadeda system consisting of a Drone and Dronescan payload which reaches the high shelves and methodically moves down the aisles scanning pallet barcodes
The Micro-Fulfillment Market Shift
Micro-fulfillment brings a distribution center closer to the end-customer which allows businesses to operate via an online delivery model and reduce costs of last-mile delivery for retailers. Micro-fulfillment centers are small warehouses that utilize high-end automated systems, AI and analytics to deliver goods rapidly.
Companies such as Takeoff Technologies and Fabric (Commonsense Robotics) are focused on automated micro-fulfillment centers by bringing automated storage system, floor-based free roaming robots, bin racking structure, and a lift/load handling device within the racking structure.
Recently, Takeoff Technologies announced that it has placed a $150 million order with Knapp, would allow for a 50-site deployment of its robotic micro-pick centers. Even Dematic who is pioneer for warehouse automation solutions, is extending its solutions for Micro-Fulfillment with Dematic Multishuttle and Goods-to-Person picking solutions.
To see the full LogisticsIQ™ latest study on Next-Gen Supply Chain Market – Global Forecast to 2030.
