2016 to be year of “transformation” in logistics

Logistics managers seeking yet one more forecast as the year gets underway, may wish to check in with Rodger Howell, PwC’s Strategy & Principal, specializing in strategy and operations.

He sees a few key areas that should be central to corporate efforts during 2016.

• Cash-rich companies, particularly in the tech sector, will continue to invest aggressively in R&D. Success will be driven by finding ways to use R&D to provide genuine customer value as well as to innovate.

• Digital technology will become increasingly integral to companies. Organizations in every facet of the economy will need to realign their operations to compete in a digital world.

• Companies need to maximize the efficiency and reliability of corporate operations, both supply chain and otherwise, to meet today’s multifaceted challenges.

Overall, there is a broad based push within organizations to more deeply align operations with business strategy and more closely integrate various functional divisions of the organization in pursuit of common goals. 2016 is sure to be a year of transformation, and Howell sees significant opportunity for managers to position themselves for success through proactive renovation of the operational processes.

Operational excellence, particularly in the areas of technological adoption and cost realignment, will be central to the goal of executing through disruption, in his view.

In an interview with LM, Howell said that logistics managers will be expected to learn new tech skills to adapt to digitized economy.

“There is a need for everyone to adapt to the ‘new normal,’” he said. “Many logistics managers deal with global distribution, which causes complex logistics flows, tax and duty compliance obligations. It is important that those in logistics consider a model that ensures efficient paths to market, while complying with the appropriate regulations and tax regimes.”

Embracing digitization is the best way to handle complexity and speed in operations, Howell noted.

“In addition, they need to be able to connect digitally to partners and customers in order to align cost with business strategy and cycle time out of those transactions.”