The serenity of a normal sunday morning gives me time to catch-up on the business journals and blogs that have accumulated in my in-box throughout the week. As I comb through the articles, my serendipity turns into anxiety as I read article after article on the vast number of innovative ideas that are positioned by both our traditional and non-traditional competitors alike.
Regardless of whether it is real innovation or self-promotion one cannot help to feel that the world is moving quickly without them. This fast paced, new world of change in Logistics is happening because businesses and consumers are demanding better (faster) service at a lower-cost-to-serve. Today, more so than any other time in history, technology and innovation are now here to make it happen.
In the highly-fragmented field of Logistics, providers are all walking a tight-rope, balancing thin margins against the right capital expenditures for both technology and general innovation to keep up.
We all know that the primary catalyst forcing change in Logistics is e-commerce growth. E-commerce can be a blood-sport for those businesses trying to gain competitive advantage on the retail side (just ask any brick-n-mortar retailer). According to Transport Intelligence, the Retail sector is 51 percent of the 3PL market and is undergoing the most significant supply chain model shift. Transportation carrier costs are rising due to more single package deliveries to homes, warehouse complexity increases with item level picking and higher return rates, and Christmas peak volumes increasing space requirements three times in the course of two weeks. Make no mistake that these new challenges become new opportunities for those that leverage their innovation for the specific purpose of addressing these issues.
To keep pace with change, we at UPS, like many other organizations, are testing the ‘shiny new objects’ such as goods-to-person automation, robotics, drones, driverless vehicles that assist pick-and-pack operations and augmented reality glasses to support supply chain. We frequently remind ourselves however that success with the exploratory efforts themselves is not the final destination, delivering value to our customers is.
Our investments must create value, improve service, reduce costs, or provide for better sustainability. As we look to deliver value to our clients there are some common myths we’d like to clarify: