Now more than ever, it’s important for businesses to keep a close eye on the changing supply chain landscape. 2020 was a year of multiple supply chain disruptions across countless industries, creating the need for companies to look for better insight and control over their own supply chains’ various components.
The number one goal? To ensure that they can continually provide on-time products and services to their customers and clients.
If you want to be on top of your game this year, it’s helpful to look at industry trends and predictions. This article outlines five of the top trends that we expect to substantially impact supply chain management in 2021.
Sustainability
No longer the sole province of advocacy groups, environmental responsibility is now a primary goal for consumers and governments alike. The impact of this push has already been felt in the transportation industry, with green logistics gaining a significant and growing foothold in recent years. And these efforts will only gain momentum over the coming months.
Recognizing the contribution that traditional, fossil fuel-powered transportation makes to greenhouse gas emissions, many companies are turning to electric and solar-powered vehicles to help reduce their carbon footprint. But that’s just the beginning — climate-smart planning is making its way through all facets of the supply chain. For example, eco-friendly warehouses use an increasingly advanced array of energy management systems to monitor electricity, heat, water, and gas usage to prevent any unnecessary waste of resources.
Further motivating many businesses to take action is that a company’s sustainability efforts factor into consumers’ perceptions, behavior, and loyalty. In fact, over 60% of consumers say that they’re willing to pay a premium for products that have been sustainably sourced. This steady rise in “green” consumerism will only lead more companies to adopt eco-friendly supply chain management procedures in the future.
Circular Supply Chains
Linked to this push for sustainability is the rise of circular supply chains.
Unlike the traditional linear supply chain, a circular model sees manufacturers refurbishing their discarded products for reuse and resale. In part, to deal with the rising cost and uncertain availability of raw materials, and to reduce waste and limit their impact on the environment, companies are breaking down their used products and returning them to their raw material form.
This “looped” approach provides several advantages — the chief being the ability to save on raw materials. It also allows companies to more easily adapt to increasingly strict regulations regarding recycling and waste disposal. The possibility of governmental incentives is another factor nudging some businesses toward a more circular supply chain — as is the prevailing mood of consumers, who in larger and larger numbers are expressing their commitment to environmentally friendly products.
Robotic Automation
The rise in robotics is already playing a significant role in the evolution of supply chain management. In the first half of 2019 alone, companies in the US paid out close to a billion dollars on automation — spending $869 million on 16,400 robots.
More and more companies are looking to such technologies as drones and driverless vehicles to streamline their operations. “Smart” warehouses employ a range of technologies to improve both efficiency and productivity — whether speeding up labor-intensive tasks or enhancing safety. Advancements in computer vision, artificial intelligence, and motion-sensing technologies have created a new generation of collaborative robotics, or “co-bots,” to work side-by-side with a human workforce. And while fears exist that a growing reliance on robots might render that human workforce redundant, studies show otherwise. A human-machine study conducted by MIT researchers at a BMW factory found that teams made of both humans and robots are more productive than teams made of either humans or robots alone, reducing the human idle time by 85%. This productivity translates into immediate value — in part by allowing human workers to focus on higher-value tasks that directly affect business growth.
Blockchain
Security and transparency are top concerns for any company’s supply chain. And their importance only continues to grow. That’s why more and more are looking at blockchain to maximize both.
With blockchain, all components of a supply chain can be integrated into a single platform. That means everyone involved, from carriers to logistics providers, uses the same platform to monitor and report every stage of a product’s journey, including invoicing and payments. This integration level provides many advantages, not the least of which is clear visibility for all parties throughout the supply chain. It streamlines the process, minimizes disruptions, improves service, and helps teams identify problems before they occur.
IoT
Much like both robotics and blockchain, the Internet of Things will continue to grow in 2021.
The New Eclipse Foundation’s IoT Commercial Adoption Survey found that roughly 40 percent of industry leaders report that their organizations are using IoT solutions today — and 22 percent more plan to deploy IoT in the next two years. Additionally, the survey revealed that IoT investment would continue to increase, with 40 percent of organizations planning to spend more on IoT solutions from 2020 to 2021.
Across industries, companies are improving their visibility through IoT devices; transportation providers employ sensors to provide live tracking updates, and warehouses and retail outlets use devices to monitor everything from production to inventory management to predictive maintenance.
This type of real-time information is invaluable for businesses. Whether providing greater visibility, minimizing downtime, or improving customer service allows them to optimize both their assets and ROI, enhancing the entire supply chain’s efficiency. By incorporating this technology with business intelligence software, these companies have further access to analytics that allow them to base their supply chain strategies on data-driven decisions.
Change is inevitable. And increasingly rapid.
While supply chains must continuously adapt and change, recent technological advancements have caused some changes to accelerate. The good news is these same advancements provide business owners with better ways of optimizing their supply chain plans.
At Gorgo Group, we’ve adopted sustainable solutions and implemented robotic automations in our warehouses. Additionally, we keep a pulse on emerging trends to provide our clients with the best and most cost-effective solutions — for themselves, for their customers, and for their future. If you’d like help preparing your business for 2021, our experts can help. Reach out today and speak to a member of our experienced team.