Tech Disruptors and the Supply Chain

The impact of technology is typically to create efficiencies in process and systems, such that either the costs of those processes are cheaper, quicker, or offer greater utility to the user. Perhaps one of the most complex systems is the consumer supply chain and inevitably this has become a target for technologists. Technology has had a (significantly) net positive impact for industrial investors to date, but will this persist? The topic is covered in a recently released paper by my US colleagues, which considers disruption in the supply chain. There are a few points to consider. Firstly, a combination of e-commerce and urbanisation is pulling the shed closer to the consumer, whereas vehicular automation may have the opposite effect, as haulage costs reduce. In this context, location risk is an important consideration for investors. Secondly, automation will change industrial design with a requirement for larger, higher units than current stock delivers; with attendant design risk. Thirdly, technologies such as blockchain and RFID will significantly increase supply chain visibility; hence the more efficient flow of goods through logistics facilities and quicker inventory turnaround times. This will impact on the demand schedule for space. You can find a copy of the report here; and if you’re hungry for more, I’ll address the wider topic (don’t worry, only briefly), at our industrial client event next month.