What are the new technology and emerging trends in supply chain management?

Disruptions to global supply chains have been a concern for leaders and business professionals for the past two years. Supply chains are now being considered critical to the survival of any business. As different variants of Covid-19 emerge global supply chains continue to face turmoil.

Going forward, supply chain leaders need to put more effort into reducing uncertainty and getting back on track.

This article explores 5 trends that will shape the supply chain sector in the future and how business leaders can approach them. 

1. Strive towards stronger resilience

Currently, global supply chains are facing various challenges around sea freight logistics (See Figure 1), shortage of labor, and imbalances between demand and supply caused by the pandemic and the geopolitical situation of the world. 

Figure 1. Average delays in container schedules have risen 6 times in the far East and North American regions and doubled globally.

The global pandemic was a test that showed supply chain leaders that even though being lean is important to achieve efficiency, resilience and agility are also vital for surviving in this uncertain world. Therefore one prominent trend in the future will be the increased focus of supply chain managers on resilience and agility. 

The following are some ways supply chain leaders can prepare for this trend:

Widen the supply horizon

Supply chain leaders need to focus more on increasing their horizons for manufacturing facility locations and suppliers. For the past 2 years, searching for alternative sources of supply has been and will continue to be one of the main areas of focus of organizations. They need to continue to work on different strategies of sourcing and reducing their reliance on low-cost suppliers.

Enhance collaboration for better inventory management

Improving inventory management will also be a key focus of supply chain managers to improve the supply and demand imbalance. To achieve this, supply chain leaders will work on improving their supply chain visibility and the flow of information and collaboration between suppliers, logistics service providers, and other major business partners across the vertical and horizontal supply chain.

Example:

The recent US Freight Logistics Optimization Works (FLOW) initiative aims to streamline the flow of data and information amongst businesses, warehouses, logistics service providers, ports, and more. This data-sharing partnership will work towards reducing bottlenecks and congestions in the supply chain to speed up the flow of goods.

2. Refocus on sustainability

As the world walks out of Covid and climate change continues to threaten the world, governments and organizations will start re-focusing on environmental, social, and corporate governance (ESG) development.

According to a study by Oxford Economics on global supply chain leaders, 88% had created or were working on creating a clear sustainability statement. However, only 52% were able to put words into action.

The study also stated that more than half of the respondents did not have significant visibility into their supplier’s sustainable sources, and only 21% had achieved full visibility.

Here are 7 ways to improve supply chain sustainability:

• Identify the pain points of your supply chain
• Improve transportation
• Work and collaborate with sustainable suppliers
• Improve inventory levels
• Improve waste management
• Use environmentally friendly material
• Encourage regulators and consumers

To learn more about these 7 points, check out our comprehensive article on improving supply chain sustainability. 

You can check this quick read on how technologies can help improve supply chain sustainability.

3. Digital transformation acceleration

Another trend that has been the highlight for the past few years and will continue to be in 2022 and in the future is the acceleration of digital transformation in the supply chain and logistics sector. 

As digital technologies revolutionize the world, the supply chain sector is also investing in more digital solutions, such as AI, automation, and digital twins.

Sponsored

IBM Process Mining can help supply chain firms improve their digital transformation experience by offering task mining, RPA candidates, the digital twin of an organization (DTO), and Automatic Bot Generation features. IBM clients can automatically extract and analyze processes to identify automation opportunities with the highest ROI and simulate the RPA projects to specify the impact of the implementations. The IBM users can also seamlessly create RPA scripts based on the recorded user workforce activities.

Focus on digital transformation

To successfully implement digital technologies in your supply chain, you can follow the following steps:

• Identify digital transformation objectives
• Create a digital transformation strategy
• Decide on the technology enablers
• Establish competent technology leadership

To learn more about these steps, check out our article on digital transformation roadmap.

Balance digital dexterity

To successfully implement digital technologies in a supply chain, business leaders must balance it with an integrated digital culture and trained staff. Digital dexterity can be successfully improved through the following 3 ways:

• Understanding the types of digital users in your supply chain
• Implement a digital mindset across the vertical supply chain
• Reskill and upskill the workforce

To learn more on how to improve your digital dexterity, check out our article.

You can also check out our sortable and filterable lists of:

4. Focus on Cybersecurity

As supply chain networks spread and become more digital and collaborative, cybersecurity risks also rise. According to a study, 44% of organizations have experienced a security breach in the last 12 months. 74% of those organizations state that those breaches were caused by collaborating with a third-party firm.

An increased focus on cybersecurity will be another trend that supply chain leaders will experience in the future. 

Forbes identifies 3 ways to improve cybersecurity to better prepare supply chain leaders for this trend:

• While starting to work with a new third-party vendor, make sure that the security access is minimum. 
• Improve customer trust by regularly patching vulnerabilities and updating all third-party software. Multifactor Authentication solutions can also be used to protect against unauthorized access.
• Cyberattacks risk can never be fully eliminated. Therefore, preparing your team for attack can be a beneficial investment. Conducting cyberattack training programs can be helpful in this area.

The ultimate goal of all cybersecurity efforts should be to strengthen customers’ trust.

Examples:

Google, in collaboration with Salesforce, Okta, and Slack, created minimum viable secure product which is a security checklist that can help supply chains to establish minimum security baselines with all its vendors and business partners. 

Watch how experts at the RSA conference explain the importance of supply chain cybersecurity:

5. Logistics disturbance

Disruptions in logistics create a ripple effect that impacts the whole supply chain. Logistics disruptions are another significant trend that is and will continue to be a focus in the current market. 

Connect the logistics network

Integrating the logistics network is a good way of overcoming the current logistics disruptions. For example, an American logistics service provider Ryder created a platform called Rydershare that enables network collaboration in the logistics sector:

Crowdsource for last-mile delivery

Integrating crowdsourcing with your own fleet in last-mile delivery can help improve logistics operations. However, it is important to consider that crowdsourcing might not be as reliable as your own fleet. Therefore it is important to do regular background checks of the hired team members. also performs background checks of its drivers to ensure reliability.

Leverage AI for logistics optimization

Artificial intelligence has immense implications in improving logistics operations; one of them is logistics planning. Check out our comprehensive article on AI use cases in the logistics sector to learn more.

DHL’s logistics optimization platform uses advanced analytics to optimize logistics operations:

Further reading

You can also read:

You can also check out our supply chain and logistics hub which includes lists of supply chain and logistics solutions to find the tools or services that best suits your business needs.

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