2020 came and shook things up for everyone, not least for the supply chains and logistics. Since then, the industry has had to make fast moves to adapt to the new consumer demands, and to stay prepared for similar events such as pandemics, war, or any other global crisis that would potentially strike again. The market trends within the supply chain and logistics take this into account, while also making space for other hot topics such as sustainability and automation. In this post we’ll talk about the rising supply chain trends for 2022.
Sustainability
It is time to stop seeing sustainability in supply chains as a buzzword or a fly on the wall. Recent years and events are showing that sustainability practices must be a part of every business model, especially in the supply chain.
Sustainable supply chain solutions allow businesses to be more competitive, provide products and services that meet customer needs and expectations, and most importantly – as the word itself implies, not contribute to the growing environmental crisis.
Making sure that imports and exports are taken care of in a sustainable way is obvious, but we also need to consider other factors such as how we run our warehouse and contribute to a fairer working environment for our employees. To read more about sustainable warehouse practices you can check out our blog post here .
Circular Economy
While we’re on the topic of sustainability, a circular economy is another related trend that we will see more of in 2022. A circular supply chain refers to using renewable and/or recyclable resources, minimizing waste, and designing products that are easy to recycle, repair, or reuse.
This is having a significant impact on the environment, but it also means businesses can improve their supply chain in ways that will help them sell more products in the present day, being less dependent on short-term velocity. They know that if demand slows down for the products they produce, they can still make money because they won’t be creating waste in the form of things they no longer need or no longer make sense to continue producing.
Returns Management
Another important aspect of the circular supply economy closely to how businesses handle logistics is by returns management. Yes, we know, returns are never fun. They take time and recourse for both your business and your customers.
But there are steps you can take to ensure your product has a happy, healthy return. Offering your customers free returns might feel like a higher cost, but in the long run, this will be more resource-effective while you’re also building brand loyalty. Secondly, you need to look into your transportation and returns facilities. You want to make sure they’re designed in an efficient way so that you’re getting these products back into the supply chain.
Multichannel Sourcing to cope with Volatility
To meet the demands of consumers, businesses need a flexible supply chain that can adapt to disruption and changing market conditions. Current events, such as the Suez Canal disruption, and the infamous covid-19 pandemic have highlighted the potential risks associated with relying on a single mode of transport and a single-sourcing model. Having a more flexible supply chain that can adapt and change to disruption and changing market conditions is a crucial trend for businesses in 2022.
The future of the supply chain is multichannel logistics. Having access to multiple modes of suppliers, transportation and shipping gives you flexibility, decreases your costs, and gives your company the ability to adapt to a changing market.
Outsourcing and Partnerships
Businesses like Amazon have raised the bar when it comes to customer expectations. Deliveries are expected to happen within 24 hours, and for smaller businesses, it becomes harder to compete. The solutions? Outsourcing and partnerships. Today’s marketplace is full of risks and unexpected events that can hurt your supply chain. Having connected, focused relationships with your partners will help you make the right decisions in challenging times.
Gartner Inc. Predicts that logistics leaders will increase their outsourcing budget over the next two years by 74%. By outsourcing the elements of your supply chain, you can eliminate internal resources that cut into your productivity and revenue. Your company focuses on core competencies such as business strategy and client satisfaction and lets a third company take care of everything else from manufacturing to order processing, packaging, delivery, and much more. An example of this is how Logent handles their outsourcing logistics. Read more about Logent and their work here.
Forecasting Delivery and Inventory needs
When it comes to forecasting delivery and inventory needs for peak season, the tendency is to go with your gut. We do it because we have years of experience in the business and we know our customers better than anyone else, so we feel confident in our intuition.
But running your supply chain in the dark can be risky and almost a guarantee for mistakes. In a world of increasing data visibility, supply chain management technology gives us a chance to run our supply chain better than ever before.
Many organizations still struggle to effectively control their data assets to gain insights. This is partly because there are too many separate data sources, most of which are not aligned with the business system being used for supply chain planning and execution. As a result, it can be difficult to identify valuable insights within the data, which limits the ability to anticipate or react appropriately to events or disruptions.
Artificial intelligence and machine learning are making forecasts more accurate and providing greater insights into the big picture of modern supply chains. Using logistics management software, supply chain companies can collect data and use it to inform decisions such as when to acquire more inventory or when to delay shipments.
Automation
While we’re on the topic of forecasting delivery and inventory needs we have to talk about, maybe the hottest topic of them all – robotics and automation.
Supply chain automation has many advantages. One of the biggest benefits is that it helps businesses to reduce costs, improve customer satisfaction and increase competitiveness in their market. It is also much easier to automate repetitive tasks using software, which means that your employees can focus on more creative and strategic tasks.
Access to real-time data means you can make better decisions, and easily scale up or down depending on your business needs. Automation also makes you able to respond faster to changing market demands.
Check out how our customer DB Schenker is working with automation in the video below.
