Technology’s changing role in the supply chain

Alessandro Renzo, Operations Director, Supply Chain – Italy | April 8, 2021

The industry is four to five years ahead of where it had planned to be when it comes to digitalization of the supply chain. You only need to look at the seismic growth of e-commerce across Europe in response to the pandemic to see how technology’s role has rapidly evolved. In the DIY sector alone, we have seen up to +50% growth in traditionally less e-commerce-oriented countries like Italy and Spain. While we hope the pandemic is temporary, technological disruption and innovation need to be ongoing: e-commerce growth will accelerate again after the pandemic ends. The pandemic has also shown that additional drivers for innovation are sustainability and agility. Before 2020, supply chain players would consider efficiency, service level increases and ROI as key factors when evaluating technology. Now, technology’s role in reducing a company’s environmental impact has shifted from ‘nice to have’ to ‘must’ and it’s essential that technology helps companies scale their operations to adapt to fluctuations in demand and supply disruptions.

E-commerce a major driver of logistics in Italy

Before the pandemic, Italy had one of the lowest rates of e-commerce penetration in Europe. That of course changed almost overnight as online shopping surged, most of which was driven by the grocery sector. As ongoing restrictions limited Italians’ ability to buy goods in physical shops, a similar shift to e-commerce occurred across almost every industry. Businesses of all sizes have moved their retail operations online for the first time, which for most was a tough challenge. Due to the growing demand for logistics space from companies running sales platforms and retailers adopting omnichannel strategies, e-commerce is now a major driver of Italy’s logistics sector.

How customers can stay ahead of the e-commerce evolution

The pandemic has made digitalization more urgent than ever, and technology plays a key role in transitioning to an omnichannel business model. Fortunately, there are many mature technologies available to support all aspects of the supply chain, from inbound and storage to picking, packing and shipment. However, having the right people in place is most important. While hardware, digital tools and processes are key to being flexible and planning for contingencies, having the right people with the necessary skills, training and mindset is essential. Leadership and teamwork are just as important as technical and digital skills, which is why XPO continually invests in its people as well its technology.

Get our point of view and industry insights via our e-commerce and DIY page. Read our factsheet, infographic, webinar poll results and watch the DIY webinar replay to stay ahead of the e-commerce evolution.