Top 5 Trends to Know to Compete with

Amazon’s Supply Chain

Aside from the new administration, Amazon’s supply chain continued push deeper into
new and existing markets will define additional trends in the supply chain throughout the
coming year. While supply chain entities struggle to stay competitive with the e-
commerce giant, more organizations will look for ways to eliminate inefficiencies and
boost operations. Fortunately, these five trends may alleviate some of the strains of
competition by giving supply chain partners an advantage in the global market.

1. Robotics Will Grow More Versatile.

Amazon’s purchase of Kiva Robots changed the landscape of robotics in the supply
chain. However, new companies are being created and developed to fill the void. The
robotics company, Starship, released a robot that delivers meals and groceries to people in
Euro metro markets. Meanwhile, Lowe’s has created the LoweBot, which boosts
customer service, explains Dan Gilmore of Supply Chain Digest.

More companies are turning to robotics to find new ways to bridge the divide between a
dwindling number of customer service representatives, including store associates, and
maintaining around-the-clock operations. Across the spectrum, robotics will become
more versatile and accessible. In other words, robots will gain new movements, capable
of picking items from shelves in warehouses and storefronts.

Per IDC Manufacturing Insights, the use of robotics will become more platform based
through robot-as-a-service, reducing costs of deployment and maintenance. Furthermore,
the speed of operation of robots will increase more than 30 percent by the end of 2017.
Clearly, robotics will become more important in 2017 than during any previous year.
2. Technology Will Reshape Procurement Practices.

Better procurement practices translate into better overall sales, but the role of
procurement in driving sales’ statistics will change throughout 2017. Today, procurement
drives up to 67 percent of sales, explains Johnathan Webb of Forbes magazine, as
procurement professionals look for innovative ways to produce effective, superior
products.

For example, Johnson & Johnson procurement professionals actively review market
trends before making purchases. Upon identifying these trends, a correct forecast of
supply demands can be generated. Thus, the role of procurement has become more
focused on being physically involved in market news and research, not just signing
purchase orders in an office.

3. More Businesses Will Create E-Commerce Platforms.

Amazon’s supply chain empowered the e-commerce market by giving everyone an

opportunity to sell their goods online, which has made competing with Amazon difficult
at best. Amazon’s supply chain expansion culminated in more companies looking to enter
e-commerce without giving shares to Amazon. Companies expanded e-commerce and
omnichannel solutions simultaneously as well, reports Steve Banker of Logistics
Viewpoints.

For example, Walmart and Kmart redesigned their mobile e-commerce interface for
consumers, making shopping and purchasing online easier and integrated with major
companies. A simple search for a product on Walmart.com reveals partnered listings with
Wayfair and third-party sellers, much like Amazon’s current vendor options. Moreover,
customers can make purchases online and have them shipped to the store or their home.
At Walmart, customers can even pick up orders without ever getting off the car now.
Ultimately, more businesses will seek out partnerships with bigger companies to stay
competitive with Amazon’s bare price points and ease of use.

4. User Preferences Will Enhance Mobile Management Systems.

Traditional warehouse management systems (WMS) lacked integration with other

systems. Procurement strategy was not always evident. Accessibility of systems depended
on in-house IT departments, and upgrading access terminals could cause extreme delays
and problems in operations. However, newer management systems, such as a
comprehensive transportation management system (TMS) that integrates warehouse
management with transportation management, are starting to offer more accessibility and
personalization options.
In other words, accessibility and personalization allows warehouse managers and staff
members to define metrics relevant to new products and current operations, test new
processes and effectively manage the flow of goods. Similarly, new mobile options,
ranging from Android tablets to compact barcode scanners will reduce inconsistencies
and errors across the supply chain, explains IRMS 360. Paired with the advancements of
predictive analytics and the Industrial Internet of Things (IIoT), more data will result in
more efficient processes, creating a positive feedback loop throughout an organization.

5. Contingency Planning Will Become a Standard Practice.

Amazon’s supply chain has proven that not planning will result in the failure of small and
medium-sized businesses. Furthermore, natural disasters reap $211 billion from the
global supply chain annually. Having a larger global footprint is how Amazon’s supply
chain has been able to maintain operations in the face of natural or manmade disasters.
This is contingency planning.

The IIoT empowers contingency planning by giving supply chain entities real-time data
from an endless number of sources, which range from online browsing data to point-of-
sale data. Consequently, supply chains can react appropriately and divert resources to
maintain operations. But, the key to utilizing this information lies in knowing what to do
and how to do it when an event occurs. In other words, more companies will diversify
distribution, supplier and storage networks throughout 2017 to prepare for what might
happen in the future.

The Big Picture.

Supply chains must accept that they cannot equal the power of Amazon’s supply chain
without embracing these new trends. New technologies are great, but chances are
Amazon has already implemented them. Rather than falling into despair, you can use
these trends to re-evaluate processes and practices in your organization, which will help
you stay competitive with Amazon and overcome the possible challenges of the new
administration.

The complexities of the global supply chain rely on your willingness to take advantage of
new trends and technologies today, as well as tomorrow, so do not squander this
opportunity.