Change can be scary, but once you understand how those changes can be beneficial to your future, it might not seem so bad. That was the overarching theme of a recent webinar hosted by Manufacturing.net, where industry experts discussed the future of fleet management and what company leaders should expect from the tides of change.
How exactly will technology impact the future of supply chains, logistics and fulfillment companies? It might not be as bad as some business owners originally think. Jim Barnes, managing director of ISM Services, Robert Nathan, CEO and Co-Founder of Load Delivered Logistic, and Michael Dennis Principal of Capgemini talked through that issue at a recent webinar with Manufacturing.net.
According to the trio of experts, technology is going to have a major effect on companies in the supply chain, logistics and fulfillment sectors. However, the future is bright. Re-shoring is expected to bring more opportunities back to U.S.-based companies, the robotics trend will not necessarily eliminate all manufacturing positions, and keeping pace with changing consumer needs can keep companies.
Re-shoring and Robots
Jim Barnes was adamant that the future is bright for supply management and logistics firms. He highlighted that consumer spending is stabilizing, there is a stronger business investment taking place, there is a debt ceiling agreement, and there is renewed growth in Europe and Japan.
Furthermore, manufacturing is beginning to return to the United States, Barnes said. The managing director cited statistics that said over the past decade, the cost of labor in Chinese factories rose 187 percent, while U.S. labor costs rose 27 percent in the same period.
Additionally, China’s currency has risen more than 30 percent, which means that it’s relatively cheaper to do business in U.S. now than it was five to 10 years ago.
Another common trend Barns mentioned was the growth of robotics. While some manufacturing business owners might fear that the rise of the machines means less jobs for humans, Barnes said that is not the case.
“There are certain administrative and manual jobs that can be done through a robot,” Barnes said. “I think there will be less people in sites. But it won’t eliminate the need for humans.”
Barnes added that there are all kinds of opportunities to leverage robots into situations where we’re still using the higher educated and more expensive resources of people in the U.S. to actually do the work.
Integrate Technology, Do Not Fight It
Combination of multiple elements is key, according to Robert Nathan. The same way that robotics can be melded with actual human workers, Nathan thinks that technology will not disrupt the supply chain. Instead, he said it will evolve the supply chain.
According to Nathan, the larger companies will likely grow, while the smaller supply chain firms will likely decline. The ability to interface with technologies is going to be paramount in the future, he said. If freight brokers are able to expand their services, and ensure that they can offer their customers numerous options – such as dry van truckload, reefer truckload, and flatbed/heavy haul – it will be better in the long run.
Many companies want to make one phone call for everything, Nathan said, which is why it’s important for companies in the manufacturing and fleet sectors to understand who their partners are and how strong or robust their technology is so they know what they offer.
Nathan also underlined the importance of following consumer behavior. When people evolve in their online purchasing needs, and start buying larger items like refrigerators and washing machines, that will affect shipping and logistics, he said.
“[Research and development] is a huge differentiator for companies,” Nathan said. “Innovation will spur creativity and help these companies grow.”
When organizations know what they can add to customers’ value chain or supply chain – through some type of specialization – that is how they will be able to continuously thrive, Nathan said.
“To compete with the Amazons of the world, smaller competitors must optimize their transportation solutions,” he said. “[They need to] aggregate and build this in trust with other organizations to battle the whale.”
Just last week PYMNTS.com highlighted another fleet-centered webinar, where WEX’s Michael Lingman discussed everything from Level III Data to fleet owners finding the right electronic system so they can better calculate total ownership cost. As long as executives understand the ins and outs of their organization and are willing to make the necessary changes to keep it profitable, Lingman said that fleet companies could find new ways to thrive.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
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