2021: A Transformative Year in Logistics

Published on in Digitalization, Food Retail, Logistics of the future, Retail, Trends
6 minutes reading time

The only constant is change

Shutdowns. Lockdowns. Travel bans. That was 2020, right? Well, here we are at the end of 2021 and it’s deja vu all over again. A new COVID variant brings new threats to grocers and retailers and new stress to global supply chains.

McKinsey Global Institute says, “Changes in the environment and in the global economy are increasing the frequency and magnitude of shocks. And in recent years, the economic toll caused by the most extreme events has been escalating.”

In the Digital Vortex 2021 report, IMD and the Global Center for Digital Business Transformation say every industry moved closer to the center of the Digital Vortex between 2019 and 2021.
In the Digital Vortex 2021 report, IMD and the Global Center for Digital Business Transformation say every industry moved closer to the center of the Digital Vortex between 2019 and 2021. Retail jumped up two spots to second place, largely because of the rapid growth of eCommerce.

Image source: Digital Vortex 2021

Extreme events are not the only things disrupting supply chains. The digitization of supply chains is also disruptive. “The Amazon Effect” has had an enormous impact on the industry, bringing new business models and new technologies that have evolved from “nice to have” to “need to have” if you want to survive and thrive in a digital economy.

The pandemic is accelerating digital transformation. A biennial global business leaders study on digital disruption found that throughout the pandemic, digitally-mature supply chains were better able to pivot; first to survive and then to minimize costs and take advantage of new opportunities created by COVID-19.

Empowered consumers are further fueling disruption with radical shifts in buying behavior. By some estimates, a decade of eCommerce adoption was compressed into less than three months in 2020. In 2021, eCommerce is still going strong. Research from Nielsen and the Food Marketing Institute (FMI) found that, “By 2022, consumers could be spending $100 billion dollars a year on online grocery. That’s equal to every U.S. household annually spending $850 online for food and beverage.” Bottom line? Digital is do or die. And the digital clock is ticking.

Logistics operator holds a smartphone for analyzing logistics KPIs with the KiSoft Analytics software. Various dashboards and data can be seen. KiSoft Analytics helps him keep track of the processes so he can make the right decisions for the warehouse and supply chain.
KiSoft Analytics links logistic processes with real-time data, so you can make better decisions faster, which is essential in a data-driven world.

Fulfillment of online orders is an increasingly important part of the new value chain. Customer experience — in the form of convenience, flexibility, and delivering on the ASAP promise — is now an essential part of maintaining consumer loyalty. Keeping consumers satisfied requires reliable, flexible, digital value chains.

The best advice of the year

For once, industry analysts and supply chain specialists seem to all be on the same page.

  • Joe Terino, N.A. Supply Chain Lead, Bain & Company says, “The consolidated supply chain of 10 years ago can no longer meet today’s business needs. Supply chains need to be more flexible and responsive.”
  • Supply chain specialist Gary Newbury says you should, “Automate with an agile mindset. Build flexibility now to be able to move quickly when disruptions occur.”
  • Financial Times says, “Just-in-time planning has to give way to just-in-case” supply chains.
  • McKinsey Insights says, “At a time when cost control is critical, a reimagination of supply chains can deliver the resilience and efficiency business needs to minimize costly disruptions before they occur.
  • Deloitte says, “In an era of unprecedented disruption, supply chains need to do more than react. They have to predict and adapt and maintain momentum to meet the needs of an ever-changing world.”

Agility. Adaptability. Flexibility. Resiliency. Whatever you call it, modern supply chains need it. Now. However, the definition of resilience is evolving. Today, resilience isn’t just about business continuity. It’s about coming back stronger. Supply chain leaders now view resilience as delivering cost minimization, innovation and growth.

OSR Shuttle EVO automatic storage systems
The OSR Shuttle EVO system has elemental customizability, configurability and expandability.

Automate with an agile mindset

Looking back at 2021, we are in awe of our customers. These industry leaders are boldly embracing change, leveraging disruption to build competitive advantage. They’re building modern, software-driven value chains that overcome the limitations of space, speed, capacity and handling.

Two Open Shuttles are transporting different-sized containers in a warehouse. Open Shuttles are autonomous mobile robots (AMR), which can be used for different tasks in distribution warehouses and production facilities. AMRs do not need any guides or landmarks and can find their way around the warehouse independently.
Autonomous mobile robots (AMRs) can be flexibly used for a variety of applications and easily programmed for redeployment.

Modern software-driven distribution and fulfillment centers are flexible by design, because they have:

  • Structural agility — modular digitalization solutions deliver elemental configurability and expandability
    – Invest in what you need now
    – Expand when you need to
    – Evolve for what’s next
  • Process agility — dynamic buffering, process decoupling, cycle doubling and pervasive connectivity make it possible to consistently ensure fast fulfillment and delivery by enabling higher levels of automation that:
    – Accelerate processing time
    – Reduce touches
    – Minimize labor
    – Achieve low variable cost per order
    – Increase profitability and availability
  • Orchestration agility — integrated intelligence enables simultaneous action across the facility, ensuring people, processes, information and technology are in lock step
    – Highly automated distribution and fulfillment drive operational success
    – Self-optimizing robotics help address endemic labor issues
    – Predictive analytics provide a more complete picture of the value chain with real-time data down to the machine controls level
A logistics manager uses the KiSoft logistics software suite for warehouse management on a laptop. He is working on a laptop. Here you can see a range of different dashboards and KPIs for the logistics system. The KiSoft logistics software helps the warehouse manager keep track of the logistics processes.
With the right software, intelligence is integrated everywhere to improve performance and transparency across everything in the value chain— from machine controls to higher level enterprise systems and from product manufacturing and distribution to the end customer.

The foundation for operational success

Intelligent software and advanced digitalization solutions are the building blocks of modern value chains. We integrate intelligence vertically— from machine control to warehouse control and management and higher-level enterprise systems. We also integrate intelligence horizontally— from product manufacturing to distribution to POS and even to the end customer. This extensive integration is unprecedented in the industry. And it’s delivering new levels of flexibility and investment protection for a new world with new challenges.

6 minutes reading time
Kathleen Spalding
Marketing Manager, KNAPP North America
In today’s on-demand world, shoppers want their purchases yesterday. How do you optimize your logistics operation to meet their expectations—and stay ahead of the competition? Check out her latest technology innovations blog for insights and approaches that keep you at the top of your customers’ shopping lists.

Share