Three Ways To Future-Proof Your Supply Chain Management
Just a few weeks in and 2023 has already given a glimpse into just how uncertain supply chains have become. The tragic earthquakes in Turkey and Syria left logistics leaders scrambling to understand rippling supply chain impacts. Meanwhile, renewed tensions between the U.S. and China over alleged spy balloons are starting to influence several organizations’ supply chain practices.
This isn’t just a 2023 problem; unfortunately, natural disasters and geopolitical events aren’t limited to a moment in time. The industry has already adjusted to a laundry list of global disruptions over the last three years, causing more than half of logistics managers to not expect normalcy in their supply chain until at least 2024. And 29% said it might not happen until after 2025—if ever again.
This volatility is transforming the role of supply chain management. Rather than solving issues as they come up, I believe it is imperative for organizations to anticipate problems before they even happen. Playing catch-up once something happens is no longer sufficient; anyone who can’t adapt risks being left behind.
Is there a blueprint for a supply chain that can be agile and resilient enough to deal with future unknown challenges? Based on my experience in the logistics industry, here are three attributes that can help stabilize supply chain management for years to come.
1. Diverse Product Sourcing And Nearshoring
Today’s supply chain has taught us that being able to pivot on the fly is key. That requires a bigger emphasis on the diversification of product sourcing and route offerings. Spreading the risk helps freight keep flowing and diminishes the potential for backlogged cargo.
Furthermore, organizations have found success nearshoring and using other semi-local outsourcing tactics. Not only does it help them quickly react to global setbacks, because operations are in a country closer to the import destination, but they can still secure cost savings associated with offshore production. Mexico is of particular interest for nearshoring because it offers tariff stability and more logistical options for moving goods to the United States.
Both strategies mark the continued shift to supply chain globalization. Consider expanding your organization’s footprint to drive growth and reduce the risk of being impacted by unexpected disruptions.
2. Modern Technology To Account For Modern Risks
Technology can connect supply chains and give organizations real-time visibility to see, understand and take action on issues. However, a Deloitte survey found that just 13% of respondents can map their entire supply chain network. With cargo thefts spiking in 2022, supply chain managers need to harness the power of technology to gain that much-needed visibility.
Emerging digital tools like digital freight matching are becoming more widely available. Tracking packages should become more accurate, too, with the ability to pick up weather delays and traffic patterns. More organizations will have access to data analytics to gain detailed insights and make more informed decisions, while smart contracts and blockchain technology can help drive greater transparency. Supply chains will also need to consider how the continued evolution of artificial intelligence (AI), machine learning (ML) and the Internet of Things (IoT) can improve efficiencies.
Technology doesn’t stop with efficiency; it’s also about keeping your organization well-protected. The 2023 BSI Supply Chain Risk Insights Report (registration needed) found that organizations see cyber vulnerability and ransomware as the most important issue “in the short, medium and long term.” Organizations can prepare by investing in their IT department and digital skills across the business. Assurance over the digital supply chain is a key issue that cannot be left unmanaged.
3. Flexibility To Meet Rising Customer Expectations
Amazon has had a paramount influence on customer expectations, particularly for faster, more convenient delivery options: 41% surveyed by Statista expect orders in 24 hours. Supply chain organizations should consider shifting to a more consumer-logistics fulfillment strategy, and providing innovative solutions for a speedy delivery can help you retain and grow your clientele.
Last-mile delivery is also here to stay. Consider software that allows for crowdsourced delivery to keep up with consumer demands. Drone and autonomous vehicle delivery could also be in play in the coming years. Meanwhile, consumers are more conscious of environmental issues than ever before. One way to answer these calls for more environmentally-friendly operations is to examine a closed-loop supply chain.
While we don’t know what the next supply chain disruption will be, it does seem likely that another is just around the corner. I advise supply chain organizations to enable their practices to transform significantly in anticipation of those challenges. The ability to be nimble and open to change should empower the next wave of leaders in the industry.
Source : forbes.com
