Millennials and predictive analysis set to change supply chains

By Rick Pendrous contact

- Last updated on GMT

Millennials will have a huge impact on supply chains
Millennials will have a huge impact on supply chains

Related tags: Supply chain

Millennials –  those aged between 18 and 34 – are expected to have a huge impact on supply chains over the next few years as they transform the way consumers shop, according to a new study.

The move towards new channels, such as online, mobile and social media, will be one of the “transformative”​ ways supply chains will be affected, said the Hot Trends Report​ from supply chain and business intelligence group EFT. Its findings were based on a survey of 300 supply chain and logistics executives carried out in October 2015.

The report found that around 69% of respondents thought millennials would change the way consumers bought products, which in turn would affect how supply chains were managed.

Adopt technology

Over 55% of respondents also felt that the ability of millennials to understand and adopt technology would drive many new innovations within supply chain organisations. This was the same across sectors: manufacturers, retailers and all logistics types asked.

EFT’s head of research and content Haley Garner reported that this could prove of significant importance for logistics companies in particular, as they sought to differentiate themselves. Similarly, manufacturers and retailers would also be able to profit from millennials being able to understand their own consumer base and innovate accordingly.

Other key takeaways from the report were that over 60% of respondents currently use, or would use predictive analytics by 2018; 48% of shippers saw mergers and acquisitions (M&A) in logistics as positive; and 39% were happy about M&A because they preferred full-service logistics providers with wider geographical reach.

“The logistics industry has gone from embracing the notion of Big Data to the importance of analytics and now to predictive analytics,”​ the report stated. Predictive analytics is the ability to make predictions on future events based on data analysis.

‘Predictive analytics’

The report added: “As machine learning becomes more and more reliable at processing unstructured data, algorithms become more complex and computer science advances, predictive analytics will be replaced by prescriptive analytics in that data analysis will be able to take advantage of the predictions it makes through recommending decisions.”

Just over 19% of respondents claimed to be using predictive analysis already, with a further 42.86% set to implement it by 2018.

Most logistics providers (46%) reported that consolidation among providers was good in that it helped to make sense of a fragmented industry. However 23% of respondents were concerned about heated M&A activity, suggesting this was going to increase competition in the logistics space.

A further 13% of respondents said they were looking to make acquisitions in light of other M&A moves. The report also said significant consolidation was taking place in the shipping industry and could expected to see further moves as logistics providers sought to take advantage of e-commerce, cross-border trade and shifting global demand.

Consolidation of providers

Manufacturers and retailers were also reported to have a positive outlook on the prospect of consolidation. The report claimed 39% of respondents indicated they saw it as a positive move, since they preferred full-service logistics providers with a wide geographical reach.

EFT suggested that as consolidation continued to pick up pace, we would see companies responding to the change through innovation, acquisitions and organic growth.

In this environment, a new set of supply chain players would emerge that were “tech-enabled, asset-light businesses”​, said the report. These firms would disrupt how logistics was conducted and begin to play a more significant role, it added.

Download EFT’s Hot Trends in Logistics and Supply Chain​ report.

Related topics: Supply Chain, Services

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