KPMG predicts innovations in the supply chain of 2015
Looking ahead to 2015, KPMG predicts the New Year will be about co-operation and relationship building, understanding and utilising big data, drone and driverless deliveries and creating marketplaces to sell last mile solutions.
The company stated co-operation is likely to be a critical feature for successful supply chains in 2015. Logistics companies and retailers, both on the high street and on the web, will have to develop close relationships so that they don’t keep repeating the annual trauma of delivering the Christmas peak.
Those that haven’t developed relationships and are only after lowest cost solutions may face opportunist pricing or even find that they can’t access any additional capacity as they try to manage during peak periods. The challenge is to create robust networks that have flexible cost bases and capacity that can be enhanced to manage varying loads.
Technology will also be a key component. Reliable forecasting from e-tailers including demand planning will focus attention on big data and the power of real time data analytics. Better understanding of available information and utilising data analytics tools will increase the efficiency of parcel networks and in turn improve the capacity issues faced in the system.
Much has been made of the impact of the recent EU changes to HGV driver training but as only one percent of drivers are under the age of 25 this is clearly a problem that has been building for many years. In the long term, technology may help solve this problem too.
Whilst drones are unlikely to be part of the solution in urban areas, they will be effective in less industrialised landscapes and in areas with less developed infrastructure. We’ve already seen DHL use a ‘parcelcopter’ to deliver pharmaceuticals to a German Island to become independent from weather and ferry schedules.
Justin Zatouroff, Global Head of Post and Express, said: ““We’re also likely to see developments in driverless deliveries. In the UK, manufacturers have been given the green light by the Government for testing driverless cars as early as January 2015. Places such as Bristol, Greenwich, Coventry and Milton Keynes will all host autonomous driving projects that will run for between 18 and 36 months next year.
“It shouldn’t be too long for lorries and trucks to join the party. Self-driving vehicles will have the ability not just to transport goods but also to combine other process steps such as loading and unloading in order to increase efficiency of processes. In addition to providing efficiency gains, self-driving vehicles can also significantly increase safety in transport and loading processes.
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world.
FedEx is Reshaping Last Mile with Autonomous Vehicles
FedEx is embarking on an expanded test of autonomous, driver-less delivery vehicles to develop its last-mile logistics.
The US logistics firm piloted autonomous vehicles from Nuro in April this year, and the pair will now explore that further in a multi-year partnership. Cosimo Leipold, Nuro’s head of partnerships, said the collaboration "will enable innovative, industry-first product offerings that will better everyday life and help make communities safer and greener".
FedEx will explore a variety of on-road use cases for the autonomous fleet, including multi-stop and appointment-based deliveries, going beyond more traditional applications of the technology in single-route movement of goods from A-B. Exponential growth in ecommerce is spurring its broader experimentation in new autonomy solutions, Fed-Ex says, both in-warehouse and on-road.
“FedEx was built on innovation, and it continues to be an integral part of our culture and business strategy,” said Rebecca Yeung, Vice President, Advanced Technology and Innovation, FedEx Corporation. “We are excited to collaborate with an industry leader like Nuro as we continue to explore the use of autonomous technologies within our operations.”
The changing role of couriers
Unlike structured delivery networks, operating under long-term partnerships and contracts, agility is where couriers deliver true value - and their ability to deftly solve last-mile fulfilment has most acutely been felt during the pandemic. For the billions of people around the world forced to stay at home to protect themselves and their communities from the spreading COVID-19 virus, couriers have been a constant. They may have been the only knock at the door some people experienced for weeks or months at a time.
But the last-mile has been uprooted by a boom in ecommerce, a shift that has been most apparent in the UK, US, China and Japan, according to the Global Parcel Delivery Market Insight Report 2021 by Apex Insight. These are markets with dominant economies and populations used to running their lives with a tap of a screen or double-click of a mouse.
“Getting last mile delivery right has long been a challenge for retailers,” says Kees Jacobs, Vice President, Consumer Goods and Retail at Capgemini. “In 2019, 97% of retail organisations felt their last-mile delivery models were not sustainable for full-scale implementation across all locations. Despite increasing demand from customers, companies were struggling to make the last mile profitable and efficient.”
Jacobs says that the pandemic alleviated some of these stresses in the short term. With no other option, consumers were understanding and tolerant, if not entirely happy, with longer delivery times and less transparent tracking. “But, as extremely high delivery demand continues to be normal, customers will expect brands to contract their delivery times,” he adds.
Last mile's role in ESG
Demand and volume weren’t the only things that have changed during the pandemic - businesses looked closer to home and as a result became more sustainable. Bricks and mortar stores were transformed from mini-showrooms to quasi-fulfilment centres. Online retailers and other businesses sought local solutions to ship more faster. In densely populated London, UK alone, Accenture found that delivery van emissions dropped by 17%, while Chicago, USA and Sydney, Australia saw similar emissions savings.