Supply chain trends trucking needs to watch

After-sales category growth is shifting parts demand: Trucking plays a major role in making sure companies have the right parts when and where they need them; that way they can maximize the uptime of the products they sell. Furthermore, as durable goods orders continue to slip (new orders dropped nearly 5% as recently as November last year) manufacturers will look to optimize revenue opportunities outside of new product sales, such as after-sales service. To ensure service part inventory levels are “optimal” (not too much, and not too little) the need for solutions to ensure parts are in stock and distribution is on schedule will only grow. This “heightened insight” into inventory needs will profoundly affect forecasts of parts requirements and delivery needs, and will directly impact trucking’s role in distribution. (Photo by Sean Kilcarr for Fleet Owner)

Driverless vehicles will reshape both performance and jobs: As driverless vehicles become a bigger part of the industry [Elon Musk, for one, predicts they will be “the norm” in a decade] the role of the human operator in the supply chain will diminish. Yet driverless trucks also offer a number of serious safety benefits. It’s projected that driverless vehicles overall can reduce traffic fatalities by up to 90%, while also providing enhanced data in real time on critical functions like deliveries and vehicle functionality. This will make the industry more efficient; but the flip side is that many jobs will be on the line as the driverless trend grows. (Photo courtesy of Freightliner Trucks)

Vehicles are becoming more connected: With options like in-cabin WiFi connectivity, electronic engines and in-dash media centers, all vehicles – including trucks – are moving under the Internet of Things [IoT] umbrella. All that data will allow manufacturers and trucking companies to tap into information and optimize vehicle and fleet performance in a whole new way. Instead of reactive maintenance, organizations can be more proactive about diagnostics, predicting when and where a specific vehicle may need a repair and thus preventing service disruptions. (Photo courtesy of Peterbilt Motors Co.)

Construction market conditions will increase trucking demand both domestically and overseas: China and India – along with the U.S. – will account for 57% of all global construction growth leading up to the year 2030. This means that trucking companies will need to branch out – or ramp up existing activity – into new areas, helping manufacturers deliver machinery and replacement parts to construction teams. (Photo by Sean Kilcarr for Fleet Owner)

Manufacturers are shifting from B2B to direct B2C sales: With after-sales e-commerce opening up direct avenues to consumers, manufacturers can now sell directly to end-users. (See Buick’s success on Alibaba’s subsidiary TMall.) This “direct sales” model has ramifications for profitability and will also cause retailers to rethink and reorganize their distribution and inventory operations. More stock will be centralized for in-house shipping and distribution will be redesigned to account for more shipping to individual home addresses, as opposed to more central “hubs.” In addition, existing mass distribution centers may need to be repositioned and routes may need to change, adding a period of volatility for trucking businesses as they modify their operations in response. (Photo by Sean Kilcarr for Fleet Owner)

Advanced technology changes job descriptions for truckers: Today, trucking is often “siloed off” from “field service.” However, as advancements in 3D printing and other manufacturing technologies improve, more truckers – particularly in the consumer delivery space – could see their job descriptions change to a role that’s more focused on direct work with customers in the field. For example, what if delivery personnel could simply 3D print the product right from the back of their truck, rather than waiting for a product to be shipped across the country? Or what if they could pick up the product at a more localized facility that is 3D printing enabled? Truckers will play a more intrinsic role in how items are made moving forward. (Photo courtesy of Amazon)

One trend truckers are already familiar with is how much more critical the role replacement part support has become in terms of maximizing equipment uptime – and how that uptime affects revenue and profits. “Most failed product repairs – upwards of 50% – are attributed to poor part availability,” Brooks said. “That’s why world’s most successful companies are investing in service parts planning technologies to improve their often sub-optimized service supply chains to ensure part availability levels are consistently higher than 95%.” (Photo by Sean Kilcarr for Fleet Owner)

Brooks noted that having the right parts in the right place at the right time is critical to a company’s ability to maximize uptime of the product they sell. “Think planes, trains, heavy medical equipment, construction equipment, etc.,” he pointed out. “Maximizing uptime of these revenue generating assets is what customers care about most, and if the equipment is down, the manufacturer is losing money and pushing customers away. If equipment is down on a regular basis due to poor part availability, the customer will go off brand when they make their next purchase, killing the manufacturer’s high service margins.” (Photo by Sean Kilcarr for Fleet Owner)

Those are just some of the reasons why the trucking industry should continue to experience serious change, largely as evolving technology, as well as new industry needs and demands, Brooks (pictured above) stressed. “Paying attention to the supply chain – and understanding how it fits into the equation – will help trucking companies gain a competitive edge,” he added. (Photo courtesy of Syncron)