As economic uncertainty becomes part of the way we do business, it’s impossible to even speculate what the next few months will bring, let alone the next year or two. But it is possible to look inward — to streamline our operations so that they’re not totally blindsided by unforeseen events. So, with some trepidation, and many caveats and disclaimers, we present our top picks among trends to monitor in 2004:
- Radio frequency identification
This has been billed as the Next Big Thing in logistics, and while that may or may not be true, it’s certainly something your distribution facility should be equipped to handle. With item-level tags likely to slash warehouse and fulfillment center operating costs by 15% to 50%, the technology is too important to ignore.
- Third-party fulfillment
Experts say that the 3PF business will nearly double between 2000 and 2004, from $4.8 billion to $8.8 billion, and that the total third-party logistics market will post double-digit growth. Now’s the time to evaluate whether you should use external contractors to manage part or all of your fulfillment activities.
- Supply chain collaboration
These vague buzzwords do stand for something concrete: connections among businesses that enable total visibility of product movement at all points in the journey from manufacturer to customer. Whether it involves changes in people, technology, or processes, real-time information linkage is de rigueur in distribution facilities.
- Small-shipment growth
Even if your primary shipments are caseloads going to business establishments, you should prepare your DC to handle individual parcels. As online retail resurges and customers order directly from manufacturers, the small-parcel sector is projected to boom in 2004.
- Offshore outsourcing
This controversial tactic may be politically incorrect, but it isn’t going away. Hundreds of thousands of American jobs have moved abroad permanently because of the huge cost savings — up to 40% in the IT sector alone — and other efficiencies that can result. And no longer is it just the grunt work that’s going offshore: Experts say companies will soon move R&D and top-level operational functions overseas.