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Driven in part by recent disruptions, companies are reinventing their business strategies and substantially redesigning supply chain management in the process. Now, “34% of supply chain leaders say that adapting to new technology is the most important strategic change supply chain organizations will face five years from now,” Gartner reported in March 2022. In addition to strategic trends in supply chain management, technologies are key to unlocking the potential for supply chains to play a more important business role.
In this blog, we explore 10 of the most critical trends in supply chain management. In addition to defining new technologies, we highlight transformative new strategies and demonstrate how supply chain officers and their colleagues can leverage them to drive business growth.
Supply chain leaders, business leaders and others have realized the importance of supply chain resilience in our everyday lives. In doing so, these leaders are not only repairing supply chain issues, but also transforming supply chains to drive business improvements.
As Gartner describes in preparation for their 2022 Supply Chain Symposium, supply chain logistics and planning must increasingly align with business strategy to “improve the customer experience (CX),” “enable the company to meet sales and service objectives” and “enable the company to be more competitive in a dynamic environment,” among other objectives.
Despite these opportunities, questions remain as to how supply chain leaders can put this transformation into effect. Here we discuss the top 10 trends in supply chain management that make this transformation possible.
E-commerce and the overlapping of B2B and B2C buying behaviors are two major drivers of this trend. Online orders now make up a significant portion of total product sales, which means that supply chains must account for the needs of both digital and physical buyers.
Leading distributors and retailers will build a complete virtual model of their supply chain in the coming years to assist in forecasting, modeling and effective planning in these areas. Doing so improves their ability to manage complex supply chains and meet evolving customer expectations.
Today, all points of the supply chain must be tightly interconnected across partners and digital ecosystems. Cloud-connected supply chains will overtake on-premise supply chain platforms as a result. The advantages of the cloud are many: It is more secure, provides real-time visibility and facilitates collaboration, among other benefits.
Comprehensive solutions for cloud-based supply chain management (SCM) that were once only available as piecemeal tools are now emerging. In addition to the comprehensive benefits, these solutions are often less expensive and require less IT support than on-premise software.
Supply chains that can adapt quickly to rapid, multifaceted challenges will be critical as customer demands become more complex. Enabling this agility throughout the entire supply chain is critical to providing each customer with a personalized experience.
The concept of “omnichannel everywhere” is a major driver of this trend in supply chain management. By definition, it means that customers can purchase goods and services from any channel they choose — be it in-store, online or through a mobile app — and receive a consistent level of service quality. E-commerce and other providers must work more closely with manufacturers and distributors, enabling their users to do more in those digital environments in response to customer needs.
A digital twin is a virtual model of a physical object or system that can be used to simulate real-world conditions. “Supply chain twins … enable collaboration across planning, scheduling, operation, and distribution and ensure [every partner] has the same understanding,” VentureBeat reports.
Digital twins are becoming increasingly important to warehouse management as companies strive to operate more efficiently and effectively. In particular, they can help to improve forecasting accuracy, optimize inventory levels and reduce downtime.
The growing adoption of automation is a major trend in supply chain management across industries. “Since the start of the pandemic … 67% of companies have accelerated automation and AI and 36% of companies have digitized their supply chain,” McKinsey reports.
For supply chain leaders, the benefits of automation are exceptional. Automation can help improve accuracy and efficiency, but it can also free up employees to focus on higher-level tasks.
“Hyperautomation,” which “goes beyond this initial focus on AI and ML and integrates other technologies and tools of the technology portfolio,” can help supply chain leaders orchestrate multiple technologies to automate countless supply chain and business processes, as Gartner described in March 2022.
Cybersecurity is a major concern for all businesses, but its transformation in supply chains is particularly important. “The [transportation & logistics] industry suffers from lagging cyber regulations and standards, inadequate cybersecurity awareness and a shortage of cyber-defense talent,” BCG describes.
Fortunately, cybersecurity leaders are increasing their focus on data security, authentication and authorization. Frameworks that enforce governance, but also support collaboration across partners are emerging that ensure even the most vulnerable partners won’t put supply chains — and by extension their supply chain partners — at risk.
Analytics tools featuring built-in, real-time analytics dashboards that provide visibility across entire supply chains are becoming an increasingly popular trend in supply chain management. Their strategic use of UI and governance enables more users within partner organizations to access these dashboards and leverage insights from analytics in each of their roles as well. At scale, these capabilities can vastly improve agility among supply chain partners.
Next-generation robotics technologies include collaborative robots, which can work safely alongside humans; mobile robots, which can move autonomously to various locations within a facility; and cloud-connected robots, which can be monitored and controlled remotely.
These AI-driven tools can reduce labor costs, improve safety and compliance, and increase accuracy and efficiency in physical environments. As the use of robots in supply chains becomes more widespread, their capabilities are sure to increase as well.
Most consumers now acknowledge the impacts of modern supply chains on the environment. Companies are being held accountable as a result. Fortunately, technologies including electric vehicles to solar-powered warehouses can help make supply chains more sustainable. These technologies are improving exponentially over time as well. As one of the most visible trends in supply chain management, sustainability will have a broad impact on business in general.
In addition to labor shortages and rising costs, it will be especially important for companies to focus on how they manage their people. Automation will play a significant role; according to PwC, up to 30% of all jobs could be automatable by the mid-2030s.
This shift will present an opportunity for companies to focus on employee development and upskilling. As employees are increasingly asked to work with new technologies, it will be important for companies to provide new types of training and create more opportunities for employees to add value. Future employees will contribute to a more agile and innovative workforce.
In this new environment, building a successful supply chain is about so much more than speed and cost. Companies are under pressure to improve sustainability, increase visibility, reduce risk and more; but each of these necessities adds new and unique benefits, contributing to all partners’ business success. Supply chain leaders need only work with their partners and stakeholders to find the right place to start.
With Tecsys at your side, you can readily seize upon these new opportunities. We provide the innovative supply chain technologies, services and expertise you need to support your business goals—no matter how complex your challenges become.
To learn more about how we can help you act on the latest trends in supply chain management, contact us today.