The Supply Chain Management Trends of 2020
The supply chain is one of the most important factors to get right in the modern business environment. A global economy and the rise of communications technologies have changed the way that supply chains are designed, organized, and managed, and that makes supply chain management a critical component of modern business management.
With the growth of trade wars and a potential recession, resilience in the supply chain is no longer something that’s nice to have but a firm requirement for those businesses that hope to survive over the next decade.
In 2020, some clear trends are emerging that are changing the concept of supply chain management, and brands that want to stay agile will need to adopt these sooner rather than later.
This has been a strong trend for the last five years, but ongoing efforts to align corporate communications with supply chain management via digital technologies is going nowhere. Digitization has clear and definable goals:
- Smarter supply chains
- Improved transparency
- Eradication of siloed barriers to departmental collaboration
- Boosts response times to supply chain changes
Creating a more digital environment for a corporation is, therefore, vital. By avoiding the need to tackle manual processes while also giving a clearer understanding of business systems is now achievable and necessary for businesses of all sizes.
Due to the complexity of supply chain management in a global business environment, many brands are recruiting supply chain managers with higher levels of education. While it used to be sufficient to have nothing more than a degree in Business Management to more proactively manage a supply chain, there is a growing demand for more specialist training. This has led to a number of MA programs that are designed to focus specifically on supply chains. You can find out more here about the best supply chain management courses available, and an indication of what kind of modules to expect if you opt to target supply chain management as your core skill.
Using the Cloud
If your business is still relying on legacy infrastructure, then you’re already falling behind your competitors. On-premise supply chain software is inefficient, and there is a huge range of options for moving those systems to a cloud-based platform. There are three key areas to explore when making the shift to cloud computing:
- Software as a Service
- Infrastructure as a Service
- Platform as a Service
By adopting supply chain cloud computing, the supply chain becomes more flexible and is significantly easier to scale. The improved global reach also reduces the costs of running and maintaining in-house IT infrastructures. With integration possible for a transitional approach, cloud computing is the key to continued business growth via more streamlined supply chain management.
Consumer power has continued to challenge the traditional means of supply management. Now, customers can buy on multiple channels, and that means significant challenges to the logistics of supply chain management. This is even more challenging for those brands that have online outlets and brick and mortar stores. Omnichannel supply is one of the big challenges for businesses, and making the move to a more omnichannel supply chain will often require a shift in thinking and a more efficient and agile supply chain process.
The Importance of Sustainability
As the global population continues to demand a greener approach, brands need to ensure that their supply chains are built around a model of sustainability. The simple fact is that those organizations that make the move to sustainability will grow faster than those that fail to. What this means for supply chain managers is the necessity of ensuring that supply chain practices are designed to be more eco-friendly. This can be done by following three steps:
- Supply chain mapping: Identifying the challenges of sustainability and inventorying suppliers to identify those that will limit greener benefits.
- Communication: Ensuring that suppliers and customers are aware of your demand for greener practices with a well-planned code of conduct.
- Performance data: The supply chain team will need to ensure that the suppliers themselves are questioned regarding their sustainability and then monitored for any changes.
While shifting to a customer service approach that utilizes smaller packaging or that replaces plastic packaging for cardboard is no longer enough for a robust supply chain with sustainability at its center. Now, supply chain managers need to ensure that every stage of the supply chain and that every supplier is fully optimized for a reduction in both costs and carbon footprint.
The Agility Challenge
It doesn’t seem that long ago that supply chains were designed to be reliable, consistent, and cheap. While these are still concerns, there is now a greater demand for improved agility in the supply chain. Sales fluctuations and global events can dramatically affect the supply chain and product demand, and that means supply chain systems have to be designed so that they are as flexible and as agile as they can be. One of the most common practices to see that ensures improved agility is making a change to the suppliers themselves. Rather than using off-shore manufacturers, brands are instead opting to use near-shore or even local manufacturing suppliers. This results in reduced shipping costs and more rapid delivery times. This, in turn, cuts down the cost of inventory.
The Internet of Things
Although it has been slow to see widespread adoption, 2020 is certainly the year that the Internet of Things (IoT) is making its value known. The costs of IoT adoption have drastically dropped since 2018, and more businesses than ever are utilizing IoT technology to better manage business strategies, streamline collaboration, and reduce manual processes. The IoT is particularly valuable for supply chain management because it can quickly and easily:
- Monitor inventory levels and highlight issues
- Automate ordering systems at key times
- Track deliveries
All of these can be visible in real-time, meaning that your supply chain is significantly more transparent, without the need for laborious manual processes that slow down the workflow.
More efficiency, more agility, and a more specialized approach are the most important trends for supply chain management in 2020. Being able to design a supply chain that ticks all of the boxes for both the company and the end-user is now critical and, more importantly, achievable.