Research recently published by Scottsdale, Ariz.-based Blue Yonder (formerly JDA), a provider of AI-driven and end-to-end supply chain management services, takes a long look at the mindsets of top-level logistics executives, regarding how they address e-commerce- and labor shortage-related disruptions, and fulfillment options, among others, as the recovery from the COVID-19 pandemic begins in earnest.
Entitled, “The New Normal of Logistics,” the research was based on feedback from more than 150 C-level and senior executives across many verticals that are responsible for U.S.-based logistics and manufacturing operations, including: manufacturing, retail, third-party logistics, transportation and warehousing. This research was conducted in March and April.
Fab Brasca, Blue Yonder GVP, Global Solutions, told LM that the driver for this research was to try to get a pulse of what is going on in mind of logistics executives, and also to create some thought leadership and good mindshare for its customers and beyond.
“It is also for our own learnings and to ensure the theses we are operating under are valid and that we are not missing anything top of mind,” he said. “It is very pertinent in these times we have been going through with the pandemic having changed lots of perspectives, and we have seen lots of things emerge that we would not have expected.”
The research is replete with takeaways focused on various trends and themes within logistics, most notably technology, training and “lenient” hiring to help quell the ongoing labor shortage, sustainability efforts that paused during the pandemic, and the roles logistics technology can play in meeting demand and reducing costs.
On the sustainability front, the research found that 57% of logistics intend to invest in more sustainable upstream operations—materials sourcing, suppliers, and manufacturing—in order to maximize supply chain sustainability.
Brasca explained that this reflects how certain things, like consumer sentiment, are viewed as levers that can drive executive behavior outside of margins and profitability.
“Consumer sentiment is a big driving force, particularly as the consumer gets younger,” he said. “They want to have a voice and are willing to make decisions. In logistics, when you look at the metrics for things like warehouse efficiency, reduction of empty miles and assets off the road, these are natural things that drive lower costs of service and increase efficiency for supply chains but coincidentally also drive sustainability measures. If you have less trucks driving less miles on the road, you have a solid carbon footprint. Will I as a shipper start to select carriers that are maybe a little more expensive? I am doing so because I know they have newer fleets or are more sustainable or whatever the rationale has to be.”
Regarding fulfillment options, 38% of respondents indicated that maintaining and optimizing convenient fulfillment options—including curbside pickup, buy online pickup in store (BOPIS), and at-home delivery—came in at the top of the list for enhancing customer experiences in the wake of the pandemic.
With e-commerce informing decisions and many consumers making purchases online, Brasca said that that he is seeing fewer consumers that like to do things in person,
“There are lots of options as well as the notion of convenience,” he said. “And the interesting thing about that is the other side of the equation, for retailers or manufacturers, or anyone that has consumer-facing commerce, there is an increased importance in not necessarily the options but having visibility into the costs to serve up those options. Retailers are looking at ways to shift consumer behavior, too, through efforts like ‘if you are select this timeframe for delivery, it is free.’ Having intelligence in those choices so you can guide the consumer to paths that are efficient for your networks.”
On the hiring front, 40% of respondents indicated they are being more lenient on specific job and industry experience requirements in order to attract and retain labor and talent in a very tight labor market.
Brasca observed that it is important to remember that this comes with the caveat that this pertains to logistics-related positions like warehouse workers, drivers, and other positions.
“Those shortages are mounting and have been for the last five-to-seven years, particularly around driver capacity, warehouse labor and they are challenges that are definitely not new,” he said. “We have seen an effort for organizations to do multiple things, with one being to attract and retain talent. So with retention and to be able to track and retain talent, it really is a significant challenge and focus
And that also is true from a technology, standpoint, with a big focus on efficiency of using, scheduling, and leveraging that workforce, he noted.
“If you are capacity-constrained, you have to use what you have but also from a design standpoint you need to have cutting edge and up to date IT tools to retain and engage staff,” he said. “And with resources like that being more transient you don’t have the timeframe to go through rigorous training; these capabilities have to be intuitive. You see a lot of investment into those approaches. It is not a user interface anymore, it is a user experience, and things like constant notifications and communications and those are things that make it interesting. Those are all factors.”
Technology investment also received strong feedback, with 48% of the survey’s respondents indicating they plan to implement or also enhance their warehouse management systems (WMS) and cloud infrastructure over the next 12 months.
What’s more, 42% said that they are planning to implement or also enhance plans through artificial intelligence (AI) and/or machine learning (ML) and another 42% pointed to sales and operations planning (S&OP) and/or sales and operations execution (S&OE), with 41% citing transportation management systems (TMS).
Brasca said that he was pleasantly surprised around the findings for AI and ML.
“It is a space that a lot of folks don’t necessarily understand,” he said. “It is a tough thing to get your head around so I am glad people are recognizing it is viable and available and not just sci-fi anymore. It is interesting in that it has this convergence of abundant computing power, especially in these public clouds and the availability of data in a way we have never seen before. This is especially true, when compared to daily EDI transactions that were sketchy at best, and now GPS is ubiquitous. You put those things together and you have fertile ground for AI/ML techniques to be applied.
But he also offered up a note of caution, advising those out there that are looking to invest and engage in those strategies: don’t let people whitewash them with no use case, make sure people know what AI and ML do, and be sure to have the use case and the supporting relative data to learn, understand, and grow from that.
To read the complete Blue Yonder research, please click here.