SEARCH FINANCIAL SERVICES INFRASTRUCTURE SECURITY SCIENCE INTERVIEWS

 

     

CSCMP State of Logistics Report Finds Supply Chains Still Strained

June 28, 2021

The 32nd Annual State of Logistics Report finds supply chains continuing to reset from the pandemic with resilient logisticians adapting, planning and shifting to meet current and future demands. The report is produced annually for the Council of Supply Chain Management Professionals (CSCMP) by global consulting firm Kearney and presented by Penske Logistics.

This year's State of Logistics Report is titled: "Change of Plans" and it delivers a snapshot of the American economy through the lens of the logistics sector in the overall supply chain. The report is a rigorous compilation of leading logistics intelligence from around the world and shines a spotlight on industry trends, and key insights on ever-evolving industry supply chains.

A key metric the report measures is U.S. business logistics costs. (USBLC). In 2020, USBLC dropped 4% to $1.56 trillion, or 7.4% of 2020's $20.94 trillion gross domestic product (GDP). The pandemic forced many global supply chains to screech to a halt and then start back up. Again and again.

As a result of a still ongoing pandemic and other disruptions, supply chains will be forced to continuously adapt. Change is inevitable in supply chains and adjustments are ongoing as manufacturers shift their sources and consumers shift their spending habits. Change will also come from the trend of multi-shoring and emphasis on optionality at the expense of lean and optimal. Safety stock is back, so more inventory will need to be carried.

Mark Baxa, president and chief executive officer of CSCMP: "This highly anticipated report contains the data and insights that will help our members achieve successful results for their organizations and prepare them for the business demands ahead. Supply chain management professionals continue to lead efforts in adapting, innovating, and managing through this period of unprecedented disruption."

Michael Zimmerman, partner at Kearney: "Logisticians came off the ropes of a bruising 2020 with a new appreciation that while resilience from the capabilities they had built got them through the main disruptive rounds of the pandemic, 2021 is confirming that the ability to change plans and execute under adversity has risen to be the top priority."

Andy Moses, senior vice president of sales and solutions, Penske Logistics: "Resiliency, innovation, technology, and close collaboration with shippers have all been essential to weathering the rapidly changing market demands up and down the supply chain. We see this continuing as supply chains reset and adjust to a new normal as consumer preferences and expectations have reshaped the future of the supply chain during the pandemic."

Key report findings:

The K-shaped recovery of 2021 reflects changed consumer habits. Hospitality, restaurants and airlines struggled. Grocery retail, home improvement and e-commerce prospered.

E-commerce purchases (some of which was picked up in-store) grew by 33% to $792 billion, representing 14% of all retail sales.

The control tower concept is taking on an added importance. Resilience is most effective when paired with visibility. Companies need knowledge to make quick decisions, and the control tower serves as an information hub to enable better planning and reacting.

Sustainability efforts by the transportation sector are increasing. Consumers are considering environmental impacts in their purchasing decisions while governments across the globe are instituting more stringent regulations.

Moving forward, supply chains must continue to provide goods and services to the American public while dealing with tight capacity and volatile rising rates; H1 2021 has the highest rates the market has ever seen.

The U.S. economy is now expected to grow 7.7% this year with advancements related to increased vaccinations and a return to normal.

Ken Bays, Vice President of Product Development at Inmar Intelligence said, “Control towers provide essential visibility into "what is." Prescriptive analytics are useful for course correcting in order to resolve issues identified by the control tower. Predictive analytics, fueled by AI and ML, will identify "what could be" or "what's best. Winning companies will be those that embrace technology-oriented service providers - Ones that continue to build out their internal capabilities while aligning with strategic vendors that are dedicated to assembling and expanding robust eco-systems. Successful companies can no longer "go it alone."

Strategic outsourcing is also essential for large-scale companies to excel during times of rapid change and unparalleled uncertainty. Using strategic outsourced service providers improves agility and enables companies to expand and contract their operations as needed, provided they are culturally aligned. This approach empowers organizations to effectively and efficiently adapt to market dynamics - driven largely by rapid changes in shopper behaviors and emerging technologies.

Dan Gilmore, Chief Marketing Officer of Softeon added, "Logistics costs as a percent of US GDP rise and fall based on a variety of factors in any given year, as the report highlights.

But the overall trend in costs is down over the the past decade, indicating we are getting more efficient. I think technology is playing an important role in that. The report cites "control tower," and that's one example. But the advances being made in Warehouse Management and Transportation Management, for example, I think are a key factor in bending the logistics cost curve downward. At Softeon, we see companies meaningfully reduce their own logistics costs as a percent of revenue, and that filters down into the broader economy. "

Terms of Use | Copyright © 2002 - 2021 CONSTITUENTWORKS SM  CORPORATION. All rights reserved. | Privacy Statement