The “My Way” Highway: Disruption in last-mile logistics

This is an excerpt of the original article. It was written for the September-October 2021 edition of Supply Chain Management Review. The full article is available to current subscribers.

September-October 2021

This time every year, we publish Gartner’s Top 25 supply chains, the annual list of the supply chains that have made it to the top, a list that now also includes 5 Masters, or companies that have consistently outperformed year after year. You can read the article in this issue, along with the web exclusive material we publish on scmr.com, to find out what it takes to become a supply chain leader.

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Andrew Grove’s quote is nearly a quarter century old, but it could have been written today. The COVID-19 pandemic was one of those strategic inflection points for e-commerce supply chains. Fundamental changes occurred in supplier offerings and consumer preferences during this challenging time. Such structural changes cannot be addressed by continuing to do what we did before, but trying to do it better, faster and cheaper. Instead, they shift the boundaries that decisions are based on, and make new things not only possible but necessary. Whether these changes are a threat or an opportunity depends on the actions taken by supply chain leaders and challengers.

We have identified five trends that are driving the e-commerce supply chain inflection point.

1. (Accelerating) rise of e-commerce
2. Rise of the retailer logistician
3. Rise of same-day/next-day delivery
4. Rise of the data scientist
5. Rise of robotics, automation and autonomy

They’re not new: Most companies doing e-business were already grappling with them before the spring of 2020. But the trends accelerated the change; what might normally have taken five years to unfold, happened in five months during the pandemic.

When new trends in the market are small, they can be ignored. When those trends move from niche to mainstream, ignoring them becomes a death sentence.

While the five trends mentioned above don’t necessarily signal the end of traditional supply chain networks, and they do have an effect on all aspects of supply chain management, our analysis speaks directly to the growth of e-commerce supply chains. Let’s look at each in more detail.

Trend#1: Rapid rise of e-commerce

While consumer demands have been skyrocketing since the mid-’90s, the COVID-19 pandemic put these demands on steroids. Millions of consumers purchased groceries online, used curbside pickup and shopped for holiday gifts online. This growth shows no signs of abating. In fact, FTI Consulting predicts that U.S. e-commerce retail sales will reach $1 trillion by 2023, and total e-commerce market share is projected to reach 27% by 2025 and 33% by 2030.

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