As consumers demand more, the last mile becomes an opportunity

This is an excerpt of the original article. It was written for the September-October 2018 edition of Supply Chain Management Review. The full article is available to current subscribers.

September-October 2018

If it’s September, it must be time for Gartner’sTop 25 supply chains, the lead article in this issue of Supply Chain Management Review. As I was reading this year’s contribution from Gartner, I was struck by the number of the Top 25 that have launched NextGen Supply Chain initiatives, using Big Data, artificial intelligence (AI), robotic process automation (RPA), machine learning and the like to digitize their supply chains. It made me wonder: Is the rest of the pack falling behind or are they ready to follow the leaders?

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It’s easy to think of Amazon.com as the greatest disruptor of business the world has ever seen. But if you think about it, the real disruptor is the consumer who wants limitless retail inventories, seamless web services and video on demand. Amazon’s next-day and same-day delivery service offerings are really just a response to disruptive consumers who want their stuff as soon as possible.

As we documented in our State of Logistics 2018 report, e-commerce sales grew 15.5% yearover- year in 2017 to $448 billion, while the retail industry as a whole grew by just 4.9%. With the 2017 holiday season notching a record 16.6% growth, the trend shows no sign of tapering off.

The public’s embrace of e-commerce is driven in part by the fact that the delivery window is narrowing to days—or hours—rather than weeks. Indeed, Amazon is seeking to establish same-day
free delivery as an industry-wide baseline. To meet these demands, shippers must find more efficient ways to operate in the last mile. We’ve identified a number of factors that shippers should consider to disrupt their own fulfillment operations—before Amazon does it for them.

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