Following turbulent times in 2020/21, the global supply chain is still facing disruption and uncertainty. In Europe, the rise of e-commerce is pressuring retailers, manufacturers, transport, warehouse and logistics companies to fulfil and deliver fast, in full, and meet high expectations for order status visibility, service and returns.
Customer demands (both B2B and B2C) now extend to much greater transparency into the end-to-end supply chain. When customers demand visibility into their orders, every stakeholder in the chain must have the same visibility in order to mitigate disruption and monitor new ways to find process improvements. Physical and digital workflows must be fully synchronised.
Let’s explore five supply chain trends that are likely to dominate 2022.
1. Adopting collaborative technology to mitigate labour shortage
Whilst warehouses are expanding and fulfilment volumes are increasing, the talent pool is shrinking. Europe faces an estimated 400,000 shortage of lorry drivers and a research study1 on warehouse modernisation strategies revealed that 83% of respondents are increasing or plan to increase the number of employees by 2024. However, the solution is not to simply recruit; warehouse work and driving must be made more desirable to retain and engage staff. Younger workers expect a digital employee experience, ergonomic tools and job satisfaction. In 2022 and beyond, technology investment to augment workers will be key, such as robotics (AMRs), multi-modal technology, vision and camera-based technology, wearables and electronic proof of delivery (ePOD). This will optimise productivity, accuracy and engage workers, from picking, to loading, to final mile, and dealing efficiently with returns/inventory.
2. Digital transformation
Recent disruption has exposed the vulnerability of manual and legacy processes and supply chain blind spots. Digital transformation is the only way to achieve visibility, control and insight. Smart, sustainable supply chains are using cloud-based technologies, IoT, AI and machine learning to automate processes, share data and make informed decisions. Rather than a costly overhaul of systems, companies will be seeking trusted technology partners to audit processes and implement a software ‘layer’ to integrate with ERP, WMS and TMS for faster payback. The key to digital transformation is to think big, start small, scale fast. This means implementing a vision of a connected, collaborative supply chain, broken down into manageable steps. Prioritise effort for quick gains, and once these are evident, scale fast by identifying the next priority area(s).
The focus now is on people (retaining talent and delighting consumers) and scalable cloud-based technologies to enable visibility, traceability and collaboration, including collaboration between humans and augmenting technologies.
3. Collaboration will be key in 2022 and beyond
Material and labour shortages, port congestion and delays continue to threaten supply chain performance. KMPG reports that 67% of CEOs are investing in disruption detention and innovative processes in order to mobilise the flow of goods cost-effectively and mitigate risk. However, an integrated approach to supply chain optimisation is critical – you’re only as strong as your weakest link. Collaboration is therefore high on the agenda in 2022, requiring technology investment, a change in mindset and revaluation of partnerships, shifting focus from purely cost to value. De-risking the supply chain through collaboration improves capacity management, forecasting, planning, visibility and reduces waste, errors and delays. Since collaboration strengthens business relationships as well as performance, the ‘win-win’ benefits should be emphasised for successful onboarding of all stakeholders.
4. Traceability for compliance and consumer engagement
Proof of product/raw material provenance, authenticity and compliance are increasingly in demand from regulatory bodies as well as consumers. Traceability (visibility up and downstream from origin to end user) is achieved through digitisation and harmonised data. Whilst traceability is essential for sectors such as tobacco and food & beverage, it benefits all supply chain parties, including manufacturers through quality control (including anticounterfeit), cost reduction, consumer engagement and enabling JIT manufacturing. Consumers may be willing to pay 2% to 10% more for products from companies that provide greater supply chain transparency2. Investing in information capture technologies such as IoT sensors, scanners and cameras is key to achieve optimum traceability.
5. Automation and advanced analytics
Whilst automation will drive resilient and agile supply chains, a recent study3 found that 73% of decision-makers believe the most optimal balance in warehousing includes human interaction. Augmenting human capability, rather than replacing people, will be a key trend in 2022. Next-generation collaborative automation (such as robotics combined with voice-picking technology) enables workers to focus on value-added tasks. Furthermore, the vast data generated through automating supply chain processes will facilitate a unified network, end-to-end visibility, carrier collaboration and traceability – the ingredients for supply chain success. Implementation of AI that incorporates predictive analytics and machine learning will inform decision-making at speed, and in turn drive resilience, agility and innovation for continual improvement.
De-risking the supply chain and optimising performance will be trending long-term. The focus now is on people (retaining talent and delighting consumers) and scalable cloud-based technologies to enable visibility, traceability and collaboration, including collaboration between humans and augmenting technologies. At the heart of the resilient, connected supply chain is harmonised data, produced and collated through digitisation and enhanced by AI as we move into 2022 and beyond.
1 Zebra Technologies: Warehousing Vision Study
2 Harvard Business Review: What Supply Chain Transparency Really Means (2019)
3 Zebra Technologies: Warehousing Vision Study