The typical role of an industry analyst is to look ahead, at the trends that are shaping and reshaping the supply chain and logistics landscape. On a recent episode of Talking Logistics, however, I decided to look back and reflect on the biggest changes I’ve seen in the industry over the past 15 years.
As you can imagine, with everything that has changed since 1998, condensing the list down to a few items was not an easy task. Nonetheless, below is my shortlist of the biggest technology, 3PL, and industry trends that I’ve seen over the past 15 years. While it’s not a comprehensive list, I hope it gets a conversation started.
The move away from proprietary, client/server solutions to standards-based, cloud architectures. Simply put, today’s software applications are easier to configure, easier to integrate, and easier/faster to update than yesterday’s applications. In this current age of cloud and software-as-a-service solutions, we’re moving away from “upgrades” (which historically have been as time-consuming and expensive as new implementations) to “updates,” which are ongoing, quick, and occur with minimal disruption to operations.
Customers are focusing beyond features and functions. The “ERP vs. Best-of-Breed” debate is much less relevant today than it was in the past, as time and acquisitions have blurred the distinction between the two. Generally speaking, there is much more feature-function parity between applications today, so companies are placing more emphasis on other important factors when evaluating solutions and vendors: time-to-benefit; how often new functionality is released (innovation cycle) and how quick and easy those innovations are to deploy; and ease of use (see “Will Software Vendors Start Competing on Design?”) It is these factors that are fueling the growth in cloud and SaaS applications.
The evolution from providing services to providing solutions. As manufacturers and retailers have taken a more integrated and holistic perspective of their supply chains, 3PLs have expanded the scope of their services (both organically and via acquisitions) and integrated them to provide customers with more “end-to-end” supply chain solutions. At the same time, they’ve also migrated toward offering more flexible, customized solutions — i.e., aligning the scope of their offering to a client’s needs versus the “outsource all or nothing” approach of the past.
The continued merging of operations, technology, and consulting. As I’ve said in the past, a successful 3PL is an operations manager, a consultant, and a technology provider all rolled into one. If a 3PL is not regularly providing customers with new ideas and recommendations as a valued consultant, and also providing them with up-to-date technology to help them make smarter decisions faster, then they’re sitting on a wobbly, one-legged stool. And although 3PLs have historically received a bad rap for being behind the technology curve, the reality is that some 3PLs actually have more IT people and spend more in R&D than many software companies!
Watch the short video clip here for my comments on the following trends:
- Supply Chain gets a seat at the executive suite table
- More women and minorities in supply chain executive positions (for related commentary, see “What’s Not in my Bio”).
- Companies take a more holistic view of supply chains
- Risk management becoming more important (for related commentary, see “Rethinking Supply Chain Risk Management”)
- The pace of change continues to accelerate
I encourage you to watch the full episode for all of my thoughts on these technology, 3PL, and industry trends. Then take a look back yourself and reflect on the biggest changes you’ve seen in the industry over the past 10-15 years and post a comment to share your perspective.