How Disruption is Reshaping Distribution and Logistics Industry Globally

Sep 07, 2022
Infor | 4 min READ
The pandemic has profoundly impacted businesses globally. The ever-evolving situation has forced companies, especially logistics and distribution enterprises, to adapt and change their operations. As a result, changes in the workforce, mobility, increased value-chain control, and sustainability conditions will be the new normal.
Bhushan Pandit
Bhushan Pandit

Associate Program Director - Infor


The impact
The economic impact of this disruption is immense and far-reaching. For instance, the rise of e-commerce and other technology-based distribution systems has made it easier to access products and services.
The spike in use of technology is one of the most visible changes. Companies have had to invest in technology to help employees working from home manage their operations. This has led to increased use of cloud-based software and apps, allowing real-time inventory and shipment tracking.
However, this same technology allows smaller companies and individuals to compete with larger corporations by providing a similar product or service at significantly lower prices.
According to Statista, the logistics industry prioritizes business continuity planning, having a 20.2% global priority. And 16.2% of the professionals are set on investing in technology/automation and ensuring financial viability.
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Increased online competition
The increased competition among suppliers has reduced shipping costs for companies significantly. However, it also makes it harder for manufacturers and retailers to maintain their pricing structure across multiple channels since they must now account for distinct shipping costs on each channel.
In addition to the economic impact, there have also been social impacts. For example, the disruption has made many people more aware of the need to care for their community and environment, evident in initiatives such as recycling programs or better public transportation options.
Tighter regulations and guidelines
Increased burden in the logistics and distribution industries with stricter regulations and guidelines that have been put in place to keep workers safe. This has led to changes in how many businesses operate, including shift patterns, increased cleaning and sanitization, and personal protective equipment (PPE).
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Technological advancement
Another significant change that we've seen is an increase in the use of robotics and automation. With social distancing guidelines, many companies are turning to robots to help with tasks like picking and packing orders. This helps keep employees safe while ensuring prompt fulfillment of orders.
Our lives have been changed for ever by the pandemic. And it's not been any different in the world of business. One of the most affected industries is distribution and logistics. The world's largest ecosystem, e-commerce, is feeling the effects of this disruption.
Increased complexity of supply chain
For years, the e-commerce ecosystem has been growing at an exponential rate. This growth has been driven byfactors including the penetration of smartphones and the increasing number of people who are comfortable shopping online. The pandemic has accelerated this growth even further.
A recent report states that e-commerce sales are expected to grow by 21% in 2022. This is a massive increase from the 14% growth projected before the pandemic. And it's not just small businesses that feel the effects of this disruption.
Even the world’s largest e-commerce platforms, such as Amazon and Alibaba, are feeling the strain. They're having to deal with a considerable increase in demand while at the same time dealing with disruptions to their supply chains. This disruption is reshaping the distribution and logistics landscape. And it’s not just the big platforms that are affected. Small businesses that rely on distribution and logistics are also feeling the pinch.
The good news is that this disruption is also creating opportunities. There is a massive opportunity for businesses that can adapt to gain market share.
Here are some tips to help you get ahead and plan for success in logistics and distribution:
  • Understand your customer needs: What are you shipping, and where do they need it to go? Remember that customer needs may change on short notice, so flexibility is essential.
  • Make use of technology: Many excellent logistics and distribution software programs are available to help you plan and coordinate your operation.
  • Stay organized: This is especially important when large volumes of shipments are concerned. Keep track of your inventory and ensure your team knows the location of every item and consignment.
  • Have a contingency plan: Things will go wrong occasionally. Have a backup plan to reschedule or reroute a shipment whenever you foresee a delay.
  • Communicate with your team: Open communication is essential for a successful logistics and distribution operation. Make sure everyone is on the same page and knows their role.
It is now imperative for the industry leaders and organizations must pivot and create strategies for the evolved market. Agile implementation with technological drivers led by intelligent engineering will ensure a place in the ecosystem.
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