Top 7 Trends Shaping the Future of Supply Chain Management
It is said that ‘Every crisis is an opportunity.’ Covid-19 pandemic is no different. It disrupted the supply chain management industry and hastened the business transformation process. Currently, the supply-chain industry is looking at greater technology integration, effective cross-regional collaboration, optimized pre-fulfilment speed and stronger supply-chain talent to transcend the current crises, galvanize industry 4.0 implementation initiatives and pave way for industry 5.0
7 Trends Shaping the Future of Supply Chain Management
1. Greater emphasis on regional hubs
Global uncertainties like the situation unfolding in Afghanistan, recent US-China tariff wars, natural calamities in various parts of the world etc. have a direct impact on the supply chain management. To surmount such challenges, companies will reduce their dependency on one country or region and look for flexible, multi-level sourcing. Apart from cost, the key differentiator will be optimized lead times and regional supply hubs to have greater control over the process.
2. Technology-led supply chain dashboards
Suppliers and end-users will demand and integrate technology-led supply chain dashboards to get a comprehensive view of the entire supply chain process. Such dashboards will also help optimize supply chain management. Data visualization of inventory will offer a macro and micro level view, for supply-chain teams to take full advantage of their inventory and storage assets.
3. Customization will be a differentiator
Statistical data models optimize the process, time and cost; however, they provide little margins for unpredictable events like a pandemic, wars, natural calamities etc. Existing minimum flexibility, high volume models are of no use in such situations. As businesses move towards flexible and more variable demand, supply chains will also need to be more adaptive in volumes and be better prepared for any major catastrophic events unfolding in various parts of the world.
4. Smart warehouses will be an ally to human intelligence
The warehouses will become smarter, but will not replace human intervention. Technologies like AMR, WMS are already leading the way in adoption. Similarly, IOT led optimizations, temperature control systems and data collection will be a necessity soon. According to a Gartner report through 2023 demand for robotic goods to person systems will quadruple to maintain social distancing within the organization. Such smart integrations will minimize the processing time, but it does not mean that the humans will be rendered jobless. On the contrary, greater technology penetration will make stronger supply-chain talent a necessity.
5. Human intelligence-driven inferences
In future, the chief supply chain officer will lead a diverse team of technologists, subject matter experts and logistical experts. With growing technology penetration, a technology leader will be essential in the supply chain management matrix. He will be required to work closely with the industry and logistics experts to understand the needs of the organization and come up with solutions that are customized to the industry. Businesses and end-users will require technology-driven hyper customized solutions. Over the past few years manufacturing companies have been implementing ‘China plus one’ policy. Places like Hong Kong, Vietnam, Philippines, India are poised to take advantage of this multi country, similar geography strategy. The manufacturing companies will look for tech savvy, supply chain experts who understand the region as well as have the network that will help businesses work with agility and speed.
6. Risk Assessment for supply chain
Stress test analysis of the logistics industry will be the new normal in the coming years. Businesses will review the delivery locations, regional hubs and distributors to review geographical and geopolitical risks. Conducting such tests at regular intervals will help forecast potential hotspots that might affect the last-mile delivery. Regional free trade agreements will be an added advantage to the ASPAC regions supply chain prowess.
7. Last Mile delivery collaborations
Instead of trying to own the entire system, the supply chain management is looking towards collaborations to accommodate the uncertain volumes. Online auction systems to match demand and supply of truck space, optimize space utilization with shared warehousing, systems to crowdsource last-mile delivery etc. are some of the things that the logistics industry is experimenting with. The pandemic and the current geopolitical uncertainties have heralded a new era for the supply chain management. It is an exciting time for the industry, with new business models and service offerings being discussed and experimented with. The challenge for the logistics industry will be to identify a valuable offering and implement it effectively to reap greater benefits.