In 2020, COVID-19 placed uncertainty, disruptions, and unprecedented challenges on supply chain organizations around the world. Supply chain and logistics leaders have been forced to adapt and procure to the new environment and are likely to reflect this moving forward in the next year. Here are some of the trends that are expected to gain momentum in the industry entering 2021:
1. Increased agility and flexibility
COVID-19 created highly unprecedented disturbances in the planning and managing of supply chains that most companies were underprepared for. Moving into the new year, the relevance of implementing strategies that will allow for more responsiveness will increase. According to Industrial Times, it is likely that an increase in use of AI and machine learning will be used to predict and prepare for future events, creating agility to allow for quicker responses to change.
Increased awareness for being climate-smart, as well as improving the environmental profile of supply chains, is creating a drive for sustainable planning in SCM. In a study conducted by BCG, it was found that greener supply chains, which can be generated through efficient use of operational resources and adoption of circular-economy models, translated into long-term financial and commercial benefits for companies, such as lower operating costs, stronger branding, and improved access to resources.
3. Creating collaboration through supply networks and eliminating information lags
According to a survey by McKinsey, companies that had regular collaboration with suppliers presented higher growth, lower operating costs, and greater profitability, in comparison to companies with less collaboration. Strengthening business networks improves competitiveness and lowers costs as the syncing of information flow eliminates errors. Companies continuing installation of real-time systems and programs will help eliminate time delays and speed up the flow of information.
Through the use of blockchain, transparency is improved as data can easily be shared across a supply chain, and it is more secure than cloud sharing. For 2021, Forrester predicts that 30% of projects will make it into production, and the majority of the networks that make this transition will be running on enterprise blockchain platforms. Research also suggests that blockchain can save $31 billion by 2024 for the food and beverage industry alone.
5. Stronger automation
In the past decade, automation and artificial intelligence in the supply chain industry has become essential as it has shown to save time and reduce human errors, therefore making operations more efficient. AI has the potential to identify patterns in the supply chain which can be used for predictive methods. According to a Gartner poll, even during the pandemic, 30% of organizations planned to increase investments in artificial intelligence, while only 16% had temporarily suspended and 7% had decreased. The use of AI during the pandemic proved to be efficient, and more companies are expected to increase usage moving into 2021.
As trends in supply chain continue to evolve, it is important that organizations continue to monitor new developments and adapt accordingly. Preparation and awareness for these expected changes will help organizations continue to succeed and gain competitive advantage in the industry as we enter the new year.