50 Interesting Facts about the Supply Chain
The supply chain is a hugely important part of any business, government, or public organization. But what exactly is the supply chain? And what makes it so important? In this blog post, we'll take a look at 50 interesting facts about the supply chain. We'll explore what the supply chain is, what its components are, and how it's been critical to businesses and organizations throughout history. So if you're interested in learning more about this essential part of the modern world, read on!
1. Over 5 Million US Citizens Are Employed in Transportation and Warehousing
According to the Bureau of Labor Statistics (BLS), the U.S. alone is home to over five million transportation and warehousing employees.
2. Supply Chain Management Software Is Huge — and Still Growing.
A recent report showed that SCMS usage grew 9% year over year, a huge annual change for an already massive business. By 2025, the global SCMS market is expected to be over $22 billion.
3. Online Shoppers Keep Coming
As the internet continues to spread across the world, the number of global online shoppers will continue to rise. One estimate predicts that Ecommerce will make up 22% of global retail sales by 2023. To give context to this growth, 14.1% of global retail sales were ecommerce purchases in 2019. The growing number of ecommerce websites is definitely a contributing factor to this holistic number.
4. U.S. Online Retail Is Booming
The number of online shoppers in the U.S. isn’t growing as dramatically as global numbers since many Americans already shop online. However, Americans are buying more online than they ever have. Last year, the U.S. e-commerce market grew 15%, a significant growth that has correlated with the decline of brick-and-mortar shopping. Unsurprisingly, this growth has also correlated with the growth in logistics. The two go hand in hand.
5. Different Types of Logistics Exist
Most people know what logistics are, but did you know that different types of logistics exist? Party logistics, or PLs, represent the breadth and types of services offered by a logistics company. Perhaps the most common type is third-party logistics (3PL). In a 3PL relationship, the shipper, or business, maintains control of the supply chain while the 3PL provider finds ways to make the supply chain more efficient. 3PLs often take care of shipping and warehousing, among other tasks.
6. Most Fortune 500 Companies Use 3PLs
Back in 2001, only 46% of Fortune 500 Companies used 3PLs. In 2017, that number jumped to 90%. Not only are more businesses using 3PLs, but bigger businesses tend to lean on 3PLs more than anyone else. One reason big businesses use 3PLs is scalability. Scalability allows businesses to rapidly change the size and scope of their supply chain, and 3PLs provide the flexibility to scale as needed.
7. Outsourced Logistics Reduce Costs
Not only do 3PLs make supply chains more efficient, but they can lead to reduced costs. In fact, 70% of shippers say that a 3PL saved them money while improving their service. The costs saved can depend on the services a 3PL provides. Some common 3PL services include; Fulfillment, Warehousing, Kitting, Reverse logistics and Just-in-time (JIT) delivery.
8. 3PLs Improve Customer Service
Because 3PLs are often in charge of large parts of the shipping process, they’re going to impact your relationship with your customers. Fortunately, 3PLs have a positive effect. According to 83% of shippers, 3PLs improved their customer service. This could be due in part to complex actions, such as reverse logistics, that directly impact the customer but can be difficult for businesses to handle in-house.
9. Shipping Alone Is a Trillion Dollar Industry
Shipping is only part of the supply chain, yet it is a trillion dollar industry. This is due to two factors:
More people are buying online, increasing the demand for shipping.
Businesses are becoming more willing to spend to increase the efficiency and quality of their shipping.
10. Same-Day Shipping Is Becoming the New Normal
It seems not that long ago that same-day shipping was just starting to become viable. Now, an incredible 65% of retailers are expected to offer same-day shipping before the end of the year. Shoppers are starting to expect same-day shipping from retailers, and that puts pressure on supply chains — just another reason 3PLs are so popular with big businesses.
11. Trucks Are Still Dominating Shipping.
Despite all the buzz about drones and airplanes, trucks are still dominating shipping — and it isn’t close. Trucking is a $721 billion industry, and it accounts for 63.3% of all freight transportation in North America. Trucks remain an affordable, reliable, and increasingly sustainable way to ship goods. However, North America is facing a growing shortage of truckers, which could cause problems going forward.
12. But Air Shipping Is Growing
Air shipping has grown to a $44 billion industry, good for 3.8% of the entire freight market in the U.S. When looking at U.S.-Canada shipping, this number jumps to 4.7%, making it a larger industry than vessel freighting (using ships). While air is growing, costs associated with this freighting style are still higher than trucking. However, advancements in transportation technology — such as drone shipping — could continue to increase air freighting’s market share.
13. RFID Is Making Warehousing Even Better
Radio frequency identification (RFID) may not be something you’ve ever heard of, but it’s changing supply chains around the world. Implementing RFID tags could make inventory accuracy as high as 95%, meaning inventory is less likely to be lost. RFID tags will also make it easier for warehouse workers to find and keep track of goods, increasing their efficiency and decreasing the time it takes to ship goods.
14. Logistics Are Working Toward Sustainability
Like many other major industries, logistics is working toward better sustainability. Unfortunately, freighting is a leading contributor to air pollution. But things are improving. Trucks, which account for a huge amount of shipping, are becoming more environmentally friendly. Also, as supply chains become more efficient, less energy will be wasted, meaning fewer emissions. Some companies are even selectively picking supply chain companies that push for sustainability. The supply chain logistics industry still has a long way to go, but efforts for better sustainability are being made.
15. Last Mile Is Still Changing
One of the biggest hurdles for shipping is last mile, the term given to any delivery that is within one mile of its destination. In the final mile of shipping, delivery vans often have to deal with auto and pedestrian traffic, lights, stop signs, and complicated routes that take them around a city. This is the least efficient part of shipping, and logistics companies are eager to improve this. Better last mile shipping will cut costs and increase customer satisfaction.
Right now, the future of last-mile could be drones. Drones are able to avoid many of the physical barriers that delivery vans face, and they are significantly less expensive to operate. Of course, drones still aren’t viable, and it may be a while until we see them delivering our packages on a regular basis.
16. The global supply chain market size value is $15.85 billion
This is indeed a massive market size value already but this figure is expected to reach almost 31 billion U.S. dollars by 2026. The Global Supply Chain Management Market size is expected to reach $42.46 billion by 2027, rising at a market growth of 10.4% CAGR during the forecast period. This growth rate is predicted to continue into the future as more and more businesses and organizations come to rely on efficient supply chains.
17. Reducing supply chain costs from 9% to 4% can double profits.
Supply chains have a huge impact on company profits, so optimization and cost reduction is always valuable. This is especially true for Industrial Suppliers, where the average supply chain cost is 13.2%, while the best companies have managed to optimize this number to 7.9%. That’s a 40% savings.
18. 57% of companies believe that supply chain management gives them a competitive edge.
And 70% believed that supply chains are a key driver for quality customer service. That means that a majority of companies are aware of how important supply chains are.
19. Supply chains provide higher company growth through a wider selection of customized, reliable, sustainable, and delivered as rapidly as possible products.
These factors play a key role in growth, and here’s how much demand rose from each factor: wider selection (71%), customized (76%), reliable (73%), sustainable (69%), and rapid delivery (76%). A company’s supply chain is only as good as its weakest link. The supply chain includes everything from the procurement of raw materials to the delivery of finished goods to the customer. As such, it's made up of many different components, all of which must work together seamlessly in order for the supply chain to function properly. If any one of these components is not up to par, it can drag down the entire system.
20. The most common Key Performance Indicator (KPI) used for supply chain monitoring is daily performance at 40%.
Daily performance is the highest, but these KPIs also contribute to supply chain optimization: cost reduction (35%), production service rate (29%), inventory turn (28%), and production time (27%).
21. The global supply chain market is expected to experience a CAGR of 11.2% from 2020 to 2027.
That means a market value increase from $15.85 billion in 2019 to $37.41billion in 2027. And, this number has continued to hold, despite the pandemic.
22. Only 22% of companies have a proactive supply chain network.
Proactive supply chain management means that the end-user is always able to address shifts in supply or demand before they become critical. The fact that fewer than a quarter of companies operate this way was exposed as a big vulnerability during the pandemic.
23. 43% of small businesses don’t track their inventory.
And 21% report that they “don’t have inventory.” However, of those who do track inventory, the most common method is inventory through accounting software like QuickBooks, at 24% of small business owners.
24. 67.4% of supply chain managers use Excel spreadsheets as a management tool.
And this number only rises with experience, as around half of new investors use it, while over 75% of late majority managers do.
25. On average, U.S. retail operations have a supply chain accuracy of only 63%.
This can result in significant delays and re-stocking issues. For example, 34% of businesses have shipped an order late due to selling a product that wasn’t in stock.
26. Due to the COVID-19 pandemic, the estimated value for out-of-stock items in 2020 was $1.14 trillion.
Which is a stark contrast to the $626 billion of overstock items, meaning out-of-stock items were double the value. This same trend was especially prominent in grocery stores, where out-of-stock items were worth five times more than overstock items.
27. Globally, 12% of retailers reported heavy supply chain disruptions due to COVID-19.
This is a surprisingly low number, as 32% of global retailers reported that they experienced little disruption. However, maintaining stock items was a much bigger issue, as 28% of respondents underwent shortages and out-of-stocks and tried to find alternative sourcing options.
28. Supply chain disruptions can cause a massive 62% loss in finances.
And other aspects of business that can be hit hard by supply chain disruptions include logistics and reputation, which see an average 54% hit.
29. The #1 cause of global supply chain disruptions is mergers and acquisitions at 66%.
And other common causes of supply chain disruption include extreme weather (41%), factory fire (37%), and business sales (33%).
30. The four main elements of supply chain management are procurement, operations, distribution, and integration.
These elements work together to ensure no stoppage along the supply chain.
31. The major supply chain issues are transportation costs, accurate inventory counts, and timely pickup and delivery.
Since the COVID-19 pandemic, transportation costs have gone up due to backlogging, worker shortages, and high fuel prices. As a result, many businesses struggle to keep costs down in this area both for their customers’ sake and their business’.
Another ever-present supply chain issue is ensuring that companies have enough products to satisfy their customers, but not so much that they’re wasting it or tying up an unnecessary amount of money in inventory. Furthermore, 43% of small businesses don’t track their inventory, which makes it difficult, if not impossible, to accurately serve their customers.
The third major supply chain issue is timely pickup and delivery. This is especially true for the many companies that hire third-party shipping companies, as they can’t control when they fall behind or make a mistake. Products or materials not getting where they need to go on time causes a ripple effect that can disrupt the supply chain for a significant amount of time.
32. There are plenty of Supply Chain and Logistics job opportunities.
Despite many people already working in the industry, the sector’s sub-specialties and disciplines have been in high demand, particularly after the one massive and unanticipated pandemic that has heightened awareness of the sector’s worldwide importance and demonstrated that it is a desirable career path.
33. The future of the supply chain includes the digitalization of processes, the internationalization of exchanges, and a strategic vision for companies seeking to diversify and optimize their supply sources.
In order to stay competitive in the future, companies must start to digitalize their supply chain processes. This includes automating tasks, using data analytics to improve decision-making, and implementing new technologies. In addition, companies must be willing to internationalize their supply chains in order to access new markets and tap into global talent pools. Finally, a strategic vision is essential for any company that wants to optimize its supply sources. By taking a holistic view of the supply chain, companies can identify inefficiencies and find ways to improve their overall performance. By adopting these three initiatives, companies can position themselves for success in the ever-changing world of supply chain management.
34. The supply chain industry is believed to be the only sector that utilizes every form of transport possible. Well…maybe not skateboards.
The supply chain industry is believed to be the only sector that utilizes every form of transport possible from trucks and trains to planes and ships.
35. During the holiday season alone, UPS, FedEx, and other carriers deliver over 800 million packages.
This number continues to grow every year as more and more people shop online. While this is great for businesses, it can be challenging for carriers to keep up with the demand. They have to hire extra staff and rent additional vehicles to make sure all the packages are delivered on time. Fortunately, most carriers are up to the challenge and are able to deliver the vast majority of packages on time. However, there are always a few that get lost in the shuffle. If you're expecting a package this holiday season, be sure to track it so you know when it's supposed to arrive.
36. Airlines are converting passenger to cargo capacity
As air freight cargo is in high demand and passengers are down 95%, we have seen many airlines converting passenger aircraft into cargo planes.
37. 90% of the physical products are transported by sea freight across the globe.
The movement of container shipping is one of the major indicators of global economic stability.
38. Online Grocery is exploding. Pre-COVID-19, the penetration of online grocery sales in the mature market was around 3%-4%.
Previously, we have seen an explosion of online groceries, and we can expect this growth to reach a level similar to that of retail penetration. We have seen downloads from apps like Instacart and Walmart Grocery surging by 218% and 160%, respectively.
39. Companies joined a wave of solidarity. Many companies have transformed their supply chains to support the COVID-19 crisis.
Companies like Dyson, Michelin, GAP, Nike, Lego, Mattel, BMW, LVMH, L’Óreal, Bacardi, to name a few, have shifted their operation to produce medical supplies. Tesla has provided its logistics network for free to support the delivery of ventilators to hospitals. Zara has offered its supply chain network to the Spanish government to help with the crisis. Many other large organizations contributed to this movement.
40. Automation, mechanization, and innovation which will facilitate logistics activities with minimum human interaction will gain strong traction.
Solutions such as drones and robots implementation and regulations will move faster to become a reality in logistics.
41. Logistics operations deliver the equivalent of 16,000 swimming pools of milk every year.
The modern food system is a complex web of interconnected production and distribution nodes, all working together to get food from farms to our plates. And at the heart of this system are logistics operations, which ensure that perishable goods like milk are kept safe and fresh throughout the supply chain. In fact, logistics operations are so efficient that they deliver the equivalent of 16,000 swimming pools of milk every year. That's an incredible feat, and it's one that would not be possible without the hard work of the men and women who work in logistics. So the next time you pour yourself a glass of milk, take a moment to think about the amazing journey it has taken to get to your glass. And give a toast to the unsung heroes of the food system: the logistics workers who make it all possible.
42. If you joined together all the sausages that the logistics industry delivers in a year, they would reach beyond the moon.
Sausages are a popular foodstuff the world over, and the logistics industry plays an important role in delivering them to consumers. Every year, billions of sausages are transported by truck, ship and plane, covering millions of miles. If all these sausages were laid end-to-end, they would easily stretch beyond the moon. Indeed, the sausage industry would not be able to function without the logistical expertise of the transport sector. This is just one example of the vital role that logistics plays in our modern world. Without it, we would be unable to move goods around effectively, and commerce as we know it would grind to a halt.
43. Logistics operations deliver over 4 billion meals to pubs every year in the UK - that’s enough to feed two thirds of the world’s population.
This impressive feat is made possible by a complex network of suppliers, transporters, and distributors who work together to ensure that food reaches its destination on time and in good condition. The coordination required to keep this system running smoothly is immense, but it is vital to the smooth operation of the UK's hospitality industry. Without reliable logistics, pubs would be unable to provide their customers with the delicious food that they have come to expect. Thankfully, the UK's logistics sector is up to the challenge, and pub-goers can enjoy a meal without having to worry about where it came from or how it got there.
44. For every truck of goods delivered to our supermarkets, 400 cars are needed to transport the goods to our homes.
Supermarkets are a vital part of the food supply chain, providing us with the produce and goods we need to sustain ourselves. However, the way in which supermarkets obtain their goods can have a significant impact on the environment. For every truckload of goods delivered to a supermarket, an estimated 400 cars are needed to transport the goods to our homes. This means that the carbon footprint of a single supermarket is significantly higher than that of a local grocery store. In addition, the long-distance transport of goods results in a greater risk of food spoilage and waste. When we consider the environmental impact of our food choices, it is clear that we need to rethink the way in which we obtain our groceries. Local grocery stores may not have the same selection as supermarkets, but they offer a more sustainable option for those who are looking to reduce their carbon footprint.
45. Every year logistics operations deliver enough beer to fill Wembley Stadium.
Although it is often taken for granted, the logistics industry plays a vital role in our daily lives. Each year, logistics operations deliver enough beer to fill Wembley Stadium. That's a lot of beer! But beer is just one of the many products that are transported by the logistics industry. In fact, logistics operations play a vital role in the transportation of everything from food and clothing to medical supplies and electronics. Without the hard work of the logistics industry, our world would grind to a halt. So the next time you crack open a cold one, take a moment to think about the men and women who made it possible. Cheers!
46. If Wal-Mart were a country, it would be 26th largest economy in the world.
This is a staggering statistic, and it highlights the immense size and financial power of the company. The study also found that Wal-Mart has a greater economic impact than many smaller countries. This is largely due to the company's vast supply chain and its huge customer base. With over 10,500 stores and clubs under 46 banners in 24 countries and eCommerce websites, Wal-Mart truly is a global powerhouse. And its impact is only likely to increase in the years ahead.
47. Amazon's warehouses have more square footage than 700 Madison Square Gardens and could hold more water than 10,000 Olympic Pools.
That's a lot of space! And it's not just square footage that Amazon has a lot of. The company also has a huge number of employees. In fact, Amazon employs more people than any other tech company in the world. With all of those employees, they need a lot of space to house them all. And that's where their warehouses come in. Amazon has warehouses all over the world, and they're constantly expanding.
48. 12 million RFID tags – used to capture data and track movement of objects in the physical world – were sold in 2011.
In 2014, it is predicted that this number may drastically rise as the “Internet of Things” takes off. According to IDTechEx's "RFID Forecasts, Players, and Opportunities 2022-2032" report, a total of 28.4 billion passive RFID tags will be sold in 2021, up from 23.8 billion in 2020, representing a double-digit growth rate. The Alliance's last Market Research report forecast 2022 to be approximately 35 billion tag chips (20% increase over 2021). The RFID market size is expected to reach USD 35.6 billion by 2030 to grow at a CAGR of 11.9% from 2022 to 2030.
49. Amazon has around 100,000 robots in use in their distribution centers across the world.
Amazon's distribution centers are some of the most technologically advanced in the world. In addition to using cutting-edge automation and robotics, they are also constantly expanding their network of fulfillment centers to meet the needs of their growing customer base. According to estimates, Amazon has around 100,000 robots in use in their distribution centers across the world. These robots are used to help sort and package orders for shipment. In addition to increasing efficiency, the use of robots also helps to reduce costs. As Amazon continues to grow, it is likely that we will see even more innovative uses of robotics in their fulfillment centers.
50. Wal-Mart's top-selling item in 2021 was the banana.
Bananas are one of the most commonly shipped items in the world. The delicious fruit is traded and moved by the ton, making it one of the most popularly freighted objects around. Around 1.5 million metric tons of bananas are shipped each year, outdoing art, motor vehicles, and coal despite their triviality and weight. So when you see a freighter, chances are it’s filled with tons and tons of bananas. Oh, and a fun fact, bananas are technically berries, while raspberries aren’t.
There you have it – 50 interesting facts about the supply chain. From the humble beginnings of early trade and transport to the sophisticated supply chains of today, the supply chain has come a long way. Today, supply chains are essential to the global economy and play a vital role in keeping businesses running smoothly. With the right planning and management, supply chains can be a powerful tool for businesses of all sizes. You are almost at the end of this blog post! Seems like you are really interested in getting to know and learn more about the Supply Chain.
At AJG Transport, we are very honored to be part of this thriving industry. We take pride in our systems, operations and hardworking people. We are always looking for ways to improve our services for our clients, employees and for the economy. Let us gear towards keeping supply chains strong!
AJG Transport Operation Team
- Sources -
https://www.hollingsworthllc.com/facts-about-supply-chain-and-logistics-2/
https://www.emlv.fr/en/5-supply-chain-and-logistics-facts-you-probably-didnt-know/
https://www.zippia.com/advice/supply-chain-statistics/
https://www.linkedin.com/pulse/see-some-interesting-facts-supply-chain-around-world-mohammad-mamun/
https://labsnews.com/en/articles/business/supply-chain-revolution-in-times-of-covid-19-in-10-facts/