Estimating which logistics and global sourcing trends will create a difference to businesses in any given year has become notoriously difficult, given the speed at which technology, in particular, can suddenly disrupt the way things are done.
At the same time, technological developments like automated transportation, Internet of Things, and similar futuristic innovations, have been offering the promise of disruption for last few years without really delivering, though there is little doubt that they will, maybe in 2018, or maybe later.
The most significant global supply chain and logistics trends to watch are outlined below:
1. Brexit looming large
While 2018 posed much unpredictability and both the Europe Union and Great Britain traded barbs in public and behind closed doors, 2019 will undoubtedly be the year decisions are made, which will impact global trading for years to come. Taking into consideration Britain’s place in EU and its home as a hub for exporting, importing and manufacturing, the procurement and trading world will watch the complete year closely to see not only what Britain says but how the EU reacts, too.
Britain might have allowed negotiating trade agreements and with other EU countries, though no agreements were implemented during that time. Also, since Great Britain can negotiate with every country individually, it stands to reason which the unified front is shown by EU member nations thus far may start to fray at the edges, because few countries stand to gain more from different trade agreements with the British.
It isn’t only member nations, which have so much to gain or lose with the pending Brexit. England, particularly London, serves as an economic and strategic hub for Great Britain. With the impending Brexit, the number of organizations who currently call England home may pack up and find another home somewhere else in Europe to benefit from the single market it offers. Furthermore, approximately 63% of Europe companies plan to move at least some of their supply chain out of Great Britain with Brexit, as per CIPS.
2. U.S. trade policy will leave a void to be filled with China
China’s influence in the worldwide supply chain will continue to expand and rise in 2019. The amalgamation of the sheer magnitude of China’s manufacturing infrastructure, combined with its ambitious “One Belt, One Road” initiative, will continue to catapult China’s dominance in the international procurement and supply chain realm.
Additionally, to its present infrastructure plans that aim to connect China’s resources with Western and Eastern Europe, the country is making big moves to fill the vacuum that appears to be forming with the United States more protectionist policies under President Donald Trump.
3. Making goods move continuously is more stringent than it looks – and pricier
The business world is transforming from one where service supports the products, to a new paradigm in which service is the product. It is a trend which will continue to strengthen and impact supply chain organizations, both concerning the way they serve and they are being served. Business and consumers alike will increasingly expect to purchase products bundled with services. Similarly, global sourcing companies will obtain access to more services, which help them meet the challenges of the new paradigm.
Trends come and go. Some stick around longer than others, some fade into obscurity, and others crystallize into breakthroughs which disrupt entire industries. I believe the trends outlined in this article are most certainly going to be disruptors.
Stipan Omrcen is a global procurement specialist and CEO of Hexagon Global Solutions.