The five hottest megatrends

Artificial Intelligence Cont.: AI will help evaluate and utilize downstream data to prep systems and improve quality so effectively that some parts of a factory are nearly self-sufficient. AI will direct the transportation of parts and products on driverless truck platforms that operate in an endless stream of efficiency. “Currently a lot of companies are gathering data, but struggle with knowing what to do with it,’’ said Ted Roth, General Manager at AEB Sweden. “But the software-to-support AI is getting better and more available. I believe that AI will increase performance and automation in the processes, but it will be a journey because good, skilled AI people are currently very limited.”

Megatrend No. 4: Trade Tariffs – Even a casual glance at today’s headlines will show you that government actions that impact trade are becoming more frequent and widespread. From Washington to Beijing to Seoul to Moscow to Berlin, governments have enacted – or threatened to enact – market-restraining tariffs that have a huge impact on the transport of goods and commodities across borders. While many in industry routinely adjust operations to account for a variety of barriers, they are widely believed to be capable of driving up costs, creating market uncertainty, and inviting politically motivated counter measures (better known as trade wars) that can attack a trader’s bottom line.

Trade Tariffs Cont.: Such measures are viewed by AEB experts as likely to become more frequent in the global business environment and require companies that trade across national lines to take steps to understand how and when tariffs will impact their business. Mark Brannan, International Business Development Director at AEB, said the recent steel tariffs from the US are a good example. ‘’With new US tariffs, US companies may look for domestic rather than overseas suppliers in order to keep costs down. Similarly, exporters to the US may find that their products are no longer competitive and will therefore need to seek new markets. Typically, new trade barriers result in tit-for-tat responses from other governments, so it makes the situation even more complicated for traders.’’ (Continued...)

Megatrend No. 3: Reshaping Retail – Major changes in retail began with the start of the online era and have not stopped. Driven by Amazon and other online retailers, the shopping experience now provides endless choices along with speed of delivery. Where once price reigned supreme and overnight delivery was a way to delight consumers, product choice, same-day delivery and even same-day returns now figure into everyday buying decisions. According to DigitalCommerce360, a blockbuster fourth quarter contributed to the strongest year-over-year growth for US e-commerce in six years. Citing a report from the US Commerce Department they found that consumers spent $453.46 billion on the web for retail purchases in 2017, a 16.0% increase compared with $390.99 billion in 2016. That’s the highest growth rate since 2011, when online sales grew 17.5% over 2010.

Reshaping Retail Cont.: As an example, FedEx announced it was offering a new technology to allow high-volume e-tailers the ability to quickly improve their customer experience with a return tool that allows them to track reverse logistics. On the brick-and-mortar side of retailing, smaller stores with more exclusive products are expected to increase and quick inventory turnover will push the market. And things are not just booming in the US. According to statista.com, an estimated 1.66 billion people worldwide purchased goods online last year. During the same year, global e-retail sales amounted to 2.3 trillion U.S. dollars and projections show a growth of up to 4.48 trillion U.S. dollars by 2021.

Megatrend No. 2: Blockchain – Few topics are as hot in supply chain as blockchain, a database that holds records of digital information. Blockchain is said to be able to improve everything from asset transfer recording, to purchase order tracking, to the sharing of product information, and a multitude of other positives. It’s also touted as a technology capable of transforming SCM, as it is reportedly highly flexible, can be used in many applications and scales, is extremely transparent and accessible, and because it is recorded on a block that can be widely distributed and is not controlled by any single entity. It is also said to be exceedingly secure, since all blocks link to those before and after them on the chain.

Megatrend No. 1: Drones and Mobile Robots – Despite the market being worth just $300 million in 2017, automated, guided vehicles and autonomous mobile robots used in logistics applications are forecast for massive growth in the next five years, according to a report from Interact Analysis, a UK-based firm that provides market analysis for intelligent automation. The report, which foretells ten-fold market growth to $3 billion by 2022, said the reasons behind these projections include the growth of ecommerce, omnichannel retailing, and heightened customer demands for faster and cheaper delivery. Though the report states that automation will ease market pressures on logistics providers, it also adds that a shortage of available workers, employee training.

Drones and Mobile Robots Cont.: time, and increasing wages will combine to drive a significant return on investment. In the air, drones are also certain to proliferate. In a report on the unmanned aerial vehicle (UAV) market, Interact Analysis said commercial UAV revenues are forecast to grow at an annual rate of more than 50 percent over the next five years, reaching nearly $15 billion by 2022. Nearly $50 billion in revenue will be generated between 2017 and 2022. Interestingly, the company says vendors will have to work directly with end-customers and provide them services, and predicts that as the industry grows, service providers, like Amazon, will begin using UAVs as a standard tool. For their part, it appears major retailers are getting ready. Recently, Amazon, Walmart and other retailers filed for, or received, patents on drones. The Walmart drone would help farmers, while the Amazon design is part of its plan to develop a fleet of UAVs to get packages to customers in 30 minutes or less.