A supply chain is an extensive network of people, businesses, information, and resources that work together to provide products to customers all over the world. In this article, we’ll uncover five upcoming trends in supply chain management that can help your business run more profitably and productively in 2022.
Why study up on supply chain trends? When the global supply chain runs optimally, most small business owners don’t think about it too much. They simply place their orders, receive their inventory, then sell or use their stock as needed.
But thanks to the global supply chain crisis brought on by COVID-19, there’s more attention on the supply chain than ever before. And by learning what the most agile businesses are doing to keep their supply chains humming along, your business can reap the benefits, too.
Here are some of those game-changing supply chain trends:
- Developing more circular supply chains
- Opting for more efficient supply chain customization
- Increasing automation
- Working around continued human resource shortages
- Creating a greener supply chain
Now, let’s dive into the details of these trends…
1. Developing more circular supply chains
A linear supply chain is traditional: Suppliers send products to manufacturers, then onto distributions, and then to consumers. But with circular supply chains, products don’t move in a straight line.
Instead, a circular supply chain encourages manufacturers to “remake” discarded materials into products suitable for sale. Here’s an example: many recycled goods—like aluminum cans, coffee sleeves, construction paper, cat litter, and building insulation—come from post-consumer products.
A more circular supply chain can help manufacturers skirt the high cost of raw materials—and how difficult they can be to acquire these days. Instead, some businesses can simply break down old, undesirable products and turn them back into raw materials.
A circular supply chain also insulates businesses from price volatility, especially in today’s unpredictable market. And as the local, state, and federal agencies push new, climate-focused legislation, a circular supply chain can help just about every business get greener sooner.
Finally, consumers who value earth-friendly policies may prefer to buy from businesses committed to reducing, reusing, and recycling.
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2. Opting for more efficient supply chain customization
Supply chains aren’t one-size-fits-all or even one-size-fits-some. Even small businesses are gravitating toward more efficient supply chains by customizing their network of partners to meet their needs. After all, companies need to fine-tune and localize their logistics to fulfill their customers’ orders right away.
Traditional supply chains are full of inefficiencies that small business owners can no longer afford. This will mean sourcing from a wider variety of suppliers, including suppliers who are closer by.
And while a more customized, faster supply chain may require some extra work up front, it’ll be well worth the investment when both you and your customers get what you need, lighting fast.
3. Increasing automation
Whether through robots, artificial intelligence, augmented reality, or virtual reality, automation is changing how businesses manage their supply chains.
Robots are a significant trend in supply chain management. Whether drones, robot-driven vehicles, or something else entirely, companies are asking robots to pick up the slack in massive warehouses, hard-to-reach shelves, and more.
Often, robots take on tasks that are easy but repetitive, making warehouses more efficient immediately. This frees up human resources to handle more nuanced tasks, like resolving inventory discrepancies or carefully inspecting a high-value delivery.
In the future, some businesses expect to make deliveries to consumers via drone or robot, too.
Artificial intelligence, commonly referred to as AI, is also making supply chain management easier for businesses. Using data from your supply chain processes, AI can automate those processes, making them more efficient and less prone to human error.
AI can also help with demand forecasting, provided businesses are willing to invest in the technology that enables it.
Augmented reality and virtual reality
Next up, augmented reality (AR) and virtual reality (VR) are being used by some companies to help employees do more things at once. And while this might sound like a recipe for disaster, it’s actually quite helpful.
Shipping giant DHL uses AR goggles so that workers can get all the information they need while immersed in a task. For example, if a warehouse employee is packing a box, the goggles can tell them what to pick, where it’s located, what kind of box to put it in, and more—all without so much as looking down at a sheet of paper.
Or AR might be used so that remote users can see what the wearer sees. This allows everyone from supply chain consultants to equipment manufacturers to give real-time advice to boots on the ground for a fraction of the cost.
4. Working around continued human resource shortages
It’s no secret that the coronavirus pandemic wreaked havoc on the global supply chain. And, unfortunately, experts believe that shortages in resources, materials, and labor will continue far into 2022 and beyond.
At the beginning of the pandemic, factories shuttered to stop the spread of the virus. As a result, transportation providers cut their schedules, forecasting reduced demand. But demand for some products surged—cars, medical supplies, fitness equipment, home improvement supplies. A logjam of shipping containers piled up at the wrong ports, fees for transporting products skyrocketed, and just about every industry experienced a labor shortage.
Is there a bright side to the supply chain crisis? Only that the businesses that figure out how to work around these challenges are sure to succeed. Your business can start by forecasting demand for the future now, using every tool at your disposal—and weighing the inefficiencies of your own supply chain while forecasting.
5. Creating a greener supply chain
The final trend in supply chain management? A greener, more sustainable supply chain. There is mounting pressure on businesses to adopt more sustainable, eco-friendly practices—both from government agencies and customers.
One way to do this is the first trend we mentioned, a circular supply chain. But there are other ways, too. Your business could look for a more eco-friendly warehouse that uses utilities more efficiently. Or you could partner with a transportation provider that relies on an electric fleet of vehicles to deliver goods.
Plus, customers are becoming increasingly interested in buying from companies that show a real commitment to fighting climate change—whether through recycling materials, choosing more sustainable packaging, or purchasing carbon offsets.
Another benefit? Many businesses believe that green government mandates are inevitable—and that by making more sustainable adjustments ahead of regulatory changes, they’re insulating their supply chain from chaos down the road.
How to implement these trends today
Your business can try any or all of these five trends on for size. And no, you don’t have to change everything, either. Maybe augmented reality goggles for your warehouse workers just aren’t practical for your small operation. That’s okay—start small.
For example, you could choose one finished, unsellable product you have on hand that you could repurpose into something else. Or you could find a way to localize your supply chain. Or maybe find one simple way to automate your supply chain, even if that’s just with a simple inventory app.