14 Supply Chain Trends for 2022/2023
Our expert's opinion
from major corporate challenges such as a global pandemic to universal market
trends, it is not enough for supply chains to be efficient and have lean
processes. They require all-time responsiveness and flexibility towards market
In answer to that, we see more businesses adopting a more flexible logistics approach: Elastic Logistics. This way supply chains are allowed to expand or shrink easily according to current market demands. Specific technologies and tools such as AI are used to adjust with minimal disruptions.
Elastic Logistics it becomes possible for companies to take more variables into
account and react more flexibly and adjust accordingly towards potential issues
such as in shipping, manufacturing, and transportation. Ultimately more
companies will integrate elastic logistics to become a safeguard against market
fluctuations of all kinds.
- Elissa Fournel, Associate Consultant
14 Supply Chain Trends for 2022/2023
Supply chains are the lifeblood of most, if not all, businesses today. Keeping all supply chain components running as smoothly as possible ensures that your business can provide on-time delivery of products and services, especially with changing consumer demands and supply chain disruptions brought about by the COVID-19 pandemic. Aside from reading up on the latest supply chain statistics, it’s always helpful to stay updated on the latest supply chain trends.
In this article, we’ve gathered the top predictions for supply chains, supply chain management (SCM), and even inventory management for 2021 and beyond. By staying on top of supply chain management trends and issues, you can make sure that your company can readily adapt to these changes.
SCM encompasses a broad range of activities and requires excellent attention to detail. This is why most enterprise resource planning software are designed with modules and features dedicated to SCM. Through the software, managers can optimize supply chains, keep them running as smoothly as possible, and prevent disruptions that affect customer service.
However, having these software solutions at your disposal is not enough to gain an edge over your competition. With the ongoing pandemic, a large number of SCM professionals reported experiencing disruption that forced them to change their strategies (RetailNext, 2020). These included having to adapt their supply chain for ecommerce, renegotiating contracts, as well as finding alternative sourcing options. As such, keeping tabs on industry trends will allow you to be quick on your feet and make sound business decisions.
Given the importance of supply chains, it’s no surprise that many trends in supply chain management center around the improvement of the supply chain itself, with new business models gaining traction (SupplyChain247, 2018). Supply chain technology trends also heavily feature robotics, IoT, and blockchain, which are all projected to make the supply chain faster and less prone to disruptions (Supply Chain Management Review, 2018).
1. Supply chains are going green
Climate change advocacy groups and consumers’ growing efforts to be more environmentally responsible push the supply chain to become less harmful to the environment. Electricity and transportation hugely contribute to greenhouse gas emissions in the US, so green logistics are quickly gaining traction among many companies today.
Green logistics is just one of the many supply chain trends affecting warehousing. Eco-friendly warehouses, for instance, feature advanced energy management systems that use timers and gauges to monitor the usage of electricity, heat, water, and gas all over facilities (Inbound Logistics, 2018). These systems help prevent excessive waste of resources. Electric and solar-powered vehicles are also seeing more use in supply chains; these vehicles help reduce the overall carbon footprint of supply chains.
Similarly, climate-smart supply chain planning is expected to play a more significant role in SCM in the next year and beyond. Environmental changes brought by climate change affect the availability of materials and resources, posing potential disruptions to supply chains. Companies will have to consider these factors and look for other resources if necessary.
Aside from doing their share to preserve the environment, businesses that adopt sustainable efforts also stand to gain more in terms of profit and customer loyalty (Nielsen, 2018). After all, more than 60% of customers don’t mind paying a premium for sustainable products. With green consumerism on the rise, more companies are expected to implement eco-friendly supply chain processes in the coming years.
2. Circular supply chains are the future
Linear supply chains will soon be replaced by circular supply chains, where manufacturers refurbish discarded products for resale (East West, 2020). To deal with the rising costs of raw materials and their volatile availability, many companies are opting to break down their products and turn them back into their raw material form.
Looping the supply chain can help cut down costs, past the initial costs of putting new processes in place. With a circular supply chain, companies can spend less on raw materials and, in turn, enjoy a reduced risk of price volatility. Moreover, a circular supply chain creates less waste, helping companies reduce their overall impact on the environment.
Stricter government regulations on recycling and waste disposal also push companies to consider adopting the circular supply chain. Businesses with sustainable practices may also stand to gain incentives for their efforts, not only from the government but also from consumers, a majority of whom prefer environmentally friendly products.
3. More supply chain integrations
The coming years will see even more components being added into the supply chain, as companies look to make partnerships and build integrations with third parties. Partnering up with third-party services can help companies reduce costs while improving customer service.
For instance, more businesses will integrate and start to offer inland services reducing overall freight costs, and streamlining the supply chain (Supply Chain Dive, 2019). Integrations are particularly useful for shippers who often use a combination of sea and land transportation for their products. With integrated services, delivery times become shorter, and customer service improves.
The Amazon Effect also pushes companies to optimize their supply chains as much as possible. As a result, more supply chain managers will be partnering up with third-party logistics providers (3PLs) and 3PL-based technologies. 3PL providers offer inbound and outbound freight management and handle order fulfillment on any channel, and companies can take advantage of these to organize their supply chains.
Similarly, 3PL-based technologies allow supply chain managers to integrate multiple management systems via API and connect them to the cloud. These integrations will enable supply chain managers to overcome the limitations of in-house technology solutions.
Companies will also seek partnerships with other businesses that incorporate digital solutions, which deliver more accurate delivery ETA estimates and cut down administrative work.
Source & full article: Finances Online
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