The supply chain is far from a static model. It is constantly evolving and innovating to meet the challenges of new market trends. At Kenco, our supply chain leaders aim to keep an ear to the ground at all times, predicting these emerging trends and proactively finding solutions for our customers. Below are five supply chain trends in 2022 and how we’re tackling them with innovation.
1. Purpose-driven logistics
We’ve seen increasing market recognition and support for brands that strive for a higher purpose, whether it’s social, health, or environmental sustainability related. Consumers want to see values like these in the brands they choose to buy from, and that trickles down into those brands’ supply chains. As a result, many companies are prioritizing delivering value to all stakeholders in the supply chain: customers, employees, suppliers, and communities.
At Kenco, there are countless examples of how we’re creating a more purpose-driven supply chain, but here are some key investments:
- Autonomous Avidbots sweepers and scrubbers that support people- and heath-first innovation by improving sanitation while also removing mundane, routine work for associates
- All-electric truck fleets that slash emissions in transportation
- Several innovations in warehouse safety to prevent injury and high-potential events
- Vecna robotic tuggers that reduce what could be four to eight trips across a facility by a lift truck down to one by the tugger, thus supporting green initiatives
We’ve had customers indicate that even if the ROI of these technologies were merely breakeven, the positive impact on warehouse employees would be reason enough to invest. It’s important for shippers to work towards purpose-driven logistics to positively impact people and drive transparency and lean operations.
2. Proactive, data-driven logistics
The advent of big data, artificial intelligence (AI,) and machine learning means, in the long term, supply chains will become leaner, greener, and more predictive. According to the MHI 2021 Industry Report, 31% of respondents say predictive analytics are already in use, and 48% say it will be in use in the next five years. These technologies provide decision support with prescriptive action to respond before an issue arises, addressing issues such as labor shortages, inventory balancing, demand forecasting, dynamic slotting, and transportation failures and prevention.
DaVinci AI, Kenco’s proprietary tool that marries open-source AI/ML tools with a myriad of data sources, helps drive data-driven logistics for our customers. The technology provides dynamic, autonomous volume and labor predictions, pick path optimization, and a digital control tower to increase visibility across trading partners, transport modes, product flows, and inventory. Our customers have seen hundreds of thousands of dollars in savings in single facilities as a result of leveraging DaVinci AI.
3. Labor and space constraints
With an ongoing labor shortage and real estate capacity at historic lows, the need for automation and dense storage solutions are greater than ever. To reduce the impact of these trends, Kenco has invested in solutions like AutoStore’s Robotics Shuttle system, an automated storage and retrieval system that packs individual SKUs at a high density and uses robots to retrieve them.
The system saves space not only with high-density storage, but its automation eliminates the need for the majority of handling equipment, freeing up even more space and reducing costs. In our distribution center where AutoStore’s system is deployed, we expect to see $9 million in savings over a five-year period. Along with other innovative solutions to combat labor and space shortages, Kenco is also committed to maximizing our current workforce and investing in employee engagement to retain labor.
4. Agile, resilient global supply chains
As disruptions and shifts in consumer customization demands accelerate, companies need dynamic supply chains that can pivot quickly with fewer capital obligations. To meet this trend head-on, third-party logistics companies need to provide agility, flexibility, and resiliency while serving efficiently.
At Kenco, we have long prided ourselves on innovation as a service (InaaS). In 2015, we strategically invested in our Innovation Lab, a working test lab to pilot emerging technologies for customers and allow them to be agile through us while we test the market and deliver viable solutions. With customer-specific pipelines, we provide the full breadth of innovation lifecycle management, from testing to implementation to continuous improvement.
In the search for resiliency, customers are often overwhelmed by the market offerings around emerging technologies and automation and fear making the wrong investment. We remove the fear with our proven pilot programs and ROI-driven proof of concepts.
5. The shift to direct-to-consumer in consumer packaged goods and grocery spaces
The covid-19 pandemic has pushed more retail and grocery shoppers online, creating sustained demand for flexible and food-grade e-fulfillment solutions. As a result, big CPG brands want to skip the middleman and have direct contact with customers, much like Amazon or Walmart. In the battle for consumer attention, retailers and grocers need expertise and flexibility to help them succeed. Kenco has implemented several e-fulfillment innovations, including a physical layout in pods, a comprehensive technology stack that integrates with Shopify, PayPal, etc., and autonomous robots.
Additionally, we utilize Logistiview’s augmented reality glasses, which, when worn by an associate, clearly highlight the right and wrong locations and products to pick, ensuring both picking, packaging and shipping accuracy for our shippers. Kenco is also working with a camera vision AI/ML startup that can audit the packaging process while the associate is performing the tasks. The technology can place the correct quantity of items in the optimum configuration, monitor the correct usage and placement of dunnage and protective materials, ensure the proper closure and sealing of the package, and validate label placement. This provides customers with high shipping accuracy and assurance of undamaged product arrival in the hands of their consumers.
The Bottom Line
To stay ahead of the competition in this quickly changing market, businesses need a supply chain partner with insight into what’s next and the expertise and boldness to challenge the status quo. Kenco is charting a new path for 3PL services, creating cutting-edge solutions that help businesses transform their circular supply chain strategies and drive success. To learn more, visit our Supply Chain Innovation page.