Supply chain: BVL study investigates trends in value chain reorganization

“The logistics targets with the highest priority levels are as follows: Customer demands, delivery reliability (or on-schedule delivery), and logistics costs.” This is one of the core insights of 2017’s BVL study “Trends and strategies in logistics and supply chain management – opportunities in digital transformation”. This statement seems obvious enough, but we live in an era which is seeing rapid and radical changes to consumers’ needs and behavior. Against this backdrop, setting priorities for customer demands creates greater adaptive pressure along the entire value change.

“The end customer drives digitalization in the logistics sector.”BVL’s 2017 study

Today’s sought-after services are smaller in scale and more customized. The main motor driving this development is the increasing importance of online platforms and portals as sales channels. The manufacturing sector is now reacting to this development with different strategies for tailored mass production and modifying existing systems for producing batches of the smallest size. These strategies in turn exert substantial influence on IT systems, changing not just intralogistics systems but also those logistics processes which cover the supply chain from end to end.

Future supply chain management – the technological aspect

Starting with the pressure to change that arises from greater customer focus in the logistics sector, the BVL study looked at the following questions:

  • How will value chains be managed in the future?
  • What changes will happen to individual elements in value chains and to the roles of the various participating parties?
  • What strategic components can we identify from the insights into today’s measures?

“How will value chains be managed in the future? 2017 BVL study of trends and strategies in the logistics sector“

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With regard to supply chain management, the study confirmed two technological trends that are by now established facts, at least in theory:

  1. Suppliers and logistics service companies must be able to connect to end-to-end IT systems
  2. The inter-organizational transfer of data is driving analyses and structuring of value chains, including the deployment of predictive analytics

Both of these are issues which are, increasingly, becoming part of operations at DB Schenker and also involve the cooperation of customers. For more information on this issue, you can read our blog articles with Thomas Reppahn, Head of Logistics Product and Process Management at Schenker Deutschland AG.

Moving towards an agile supply chain

Predictive analytics: crystal ball or reliable planning tool?

Data can now be used to simulate potential future scenarios. Does that sound like looking into a crystal ball? It's actually pretty high-tech.

The study did not restrict its focus to technological considerations alone. It also looked at organizational and structural factors necessary for the customer-oriented supply chains of the future. Once more, the specific measures named in connection with this are already part and parcel of partnership-like customer relationships as practiced by service suppliers in contract logistics. Some of the topics mentioned:

  • Reducing warehouse stocks by means of drop shipments
  • Breaking loads down into deliveries for branches (two-stage cross-docking)
  • Prepackaging for customers

There are many examples at DB Schenker: Branch-specific pallet picking for supermarket supplies, flexible management of warehouse and transport resources, and complex value-added services such as picking, packaging, and returns management.

The results of the BVL study reveal that the long-term objective must be “establishing an agile supply chain network whose developments can be constantly monitored and which can be adapted quickly to the volatile surroundings.” It is only these agile structures that will make it possible to manage supply chains in a customer-focused way now and in the future as well.

“Strict focus on customers, real-time data analysis, and agile delivery networks will be essential for logistics services and supply chain management.”BVL’s 2017 study