Change is accelerating as the web proliferates as a marketing, buying and measurement tool.
Technology that is currently in the pipeline could make the rapid change we have seen so far pale in comparison:
a. Enhanced use of robotics will save time and money in factories, warehouses and residences
b. Driverless vehicles will reduce labor, reduce accidents and operate 24 x 7 x 365
c. Headway on reduction of petrol based fuels will decrease exhaust
d. Longer battery life — will use less expensive power further increasing mobility
e. Internet speeds at 100x faster than average broadband will be available in Austin this summer, with Google and AT&T competing head to head
f. Growth of advertising on the web means less revenue for tv and print
While there is no doubt that innovation is happening, most of the supply chain will be only modified in increments.
What is required for an order of magnitude type revolution in the supply chain is a frictionless energy like we saw on Star Trek. That is not on the near or mid-term horizon.
I do not believe Amazon’s claim of “Octocoper Drones” delivering in residential neighborhoods will ever occur on a real scale basis. Further, AMZN’s staggering P/E ratio of over 1400 is enough to keep me from buying their stock (look at FDX or GE as a comparative). Amazon is growing rapidly and investing heavily in R&D and advertising. It is also igniting discussion on how to compete in the retail and logistics marketplace.
Our last article What on Earth Is Going on in Retail? created a tremendous level of conversation, emails, letters and comments. Volumes right before Christmas Day accelerated rapidly and weather got rougher. By far the most complaints were aimed at UPS, who admitted that its network was overwhelmed. I suspect that carriers are considering a peak season pricing algorithm that charges more for high demand periods. We certainly have seen this done by airlines, hotels and sporting events.
There is a genuine need for retailers to utilize the inventory they have in stores for shipments vs. only selling to people who walk in the store and shipping only from central distribution centers. The costs are less, speed is faster and demand is high. One retailer has said it has $10 billion in inventory in stores, but all online
orders go through distribution centers.
Same day package delivery has its cool aspects and appears to be growing in demand, but it makes up a very small (less than one percent) piece of the whole delivery matrix of multiple overnight choices, second day and ground. Giving more expensive same day away cannot last for a significant period of time and the density, costs and fuel usage levels for residential are excessive.
Listening to customer demand, offering value for the long term, superior customer service, smart use of technology, faster speed and strong human relations, in addition to managing by measurement of tactical results will all be as critical to success in 2025 as they are right now.
Rob Shirley is CEO of ExpresShip, a strategic consultancy in the global supply chain, to contact him: rsxpship@gmail.com or www.xpship.com
Technology that is currently in the pipeline could make the rapid change we have seen so far pale in comparison:
a. Enhanced use of robotics will save time and money in factories, warehouses and residences
b. Driverless vehicles will reduce labor, reduce accidents and operate 24 x 7 x 365
c. Headway on reduction of petrol based fuels will decrease exhaust
d. Longer battery life — will use less expensive power further increasing mobility
e. Internet speeds at 100x faster than average broadband will be available in Austin this summer, with Google and AT&T competing head to head
f. Growth of advertising on the web means less revenue for tv and print
While there is no doubt that innovation is happening, most of the supply chain will be only modified in increments.
What is required for an order of magnitude type revolution in the supply chain is a frictionless energy like we saw on Star Trek. That is not on the near or mid-term horizon.
I do not believe Amazon’s claim of “Octocoper Drones” delivering in residential neighborhoods will ever occur on a real scale basis. Further, AMZN’s staggering P/E ratio of over 1400 is enough to keep me from buying their stock (look at FDX or GE as a comparative). Amazon is growing rapidly and investing heavily in R&D and advertising. It is also igniting discussion on how to compete in the retail and logistics marketplace.
Our last article What on Earth Is Going on in Retail? created a tremendous level of conversation, emails, letters and comments. Volumes right before Christmas Day accelerated rapidly and weather got rougher. By far the most complaints were aimed at UPS, who admitted that its network was overwhelmed. I suspect that carriers are considering a peak season pricing algorithm that charges more for high demand periods. We certainly have seen this done by airlines, hotels and sporting events.
There is a genuine need for retailers to utilize the inventory they have in stores for shipments vs. only selling to people who walk in the store and shipping only from central distribution centers. The costs are less, speed is faster and demand is high. One retailer has said it has $10 billion in inventory in stores, but all online
orders go through distribution centers.
Same day package delivery has its cool aspects and appears to be growing in demand, but it makes up a very small (less than one percent) piece of the whole delivery matrix of multiple overnight choices, second day and ground. Giving more expensive same day away cannot last for a significant period of time and the density, costs and fuel usage levels for residential are excessive.
Listening to customer demand, offering value for the long term, superior customer service, smart use of technology, faster speed and strong human relations, in addition to managing by measurement of tactical results will all be as critical to success in 2025 as they are right now.
Rob Shirley is CEO of ExpresShip, a strategic consultancy in the global supply chain, to contact him: rsxpship@gmail.com or www.xpship.com
