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Top 10 Trends of 2021: Tough Transformation in Supply Chain

Forklift truck in storage warehouse. Fork lift lifting pallet with cardboard boxes. 3d illustration

Analysing the top 10 trends of 2021 across supply chain, through slightly less rose-tinted glasses. Here’s a more realistic response.

In 2019, we expected 2020 to herald a new era─decade, at least─of transformation for the global supply chain networks. In some ways, that has proven to be the case, but you’d be amiss to claim, as many do, that this year has been packed full of significant development and innovations. Sure, we’ve had a mass migration to virtual norms, and companies all over the world have been forced to adopt new, technological advancements for the sake of supply chain resiliency. As a species, we’ve been wonderfully evasive of impending doom, you could probably say.

In reality, though, for all the feats of this year, we have a drastic problem ─ the majority of it has been forced. It wasn’t a case of transformation for the obvious benefits; it was a transformation for the sake of evasion.

Perhaps, regardless of the reasoning behind certain moves, organisations will continue to innovate new solutions because they’ve seen the light. That would be great. Or, as I suspect, many will choose to stagnate as they were happily doing before the COVID-19 pandemic knocked at the door. With that in mind, let’s go through the realistic trends of 2021, based on the historical norms of the supply chain.

10. Sustainability Above All Else

Sustainability is an initiative that almost every organisation is striving to meet in the modern-day. Increased carbon emissions are threatening the survival of our planet as we know it and, unfortunately, supply chain norms of the last century have contributed to that issue. Fortunately, everybody knows what’s at stake, and the majority are looking to develop more eco-friendly, sustainable supply chains, whilst innovating new solutions for old problems, for a greener, healthier environment.

In 2021, we should witness an increase in circular supply chain systems, local sustainability programmes, new innovative recycling capabilities and systems, and global commitments to eco-friendly vehicle adoption and a myriad of other new sustainable supply chain norms.

9. The New C-Suite Member: CSCO

A lot of companies feature fragmented C-Suites; they have random variations of the C-level executive, to suit the needs of the organisational structure. One particular role that has become particularly prominent during the COVID-19 era, which is often neglected, is the Chief Supply Chain Officer (CSCO). The position is usually overlooked because leaders tend to think that supply chains are just about logistics and moving products from A to B. Finally, they’ve received a wake-up call, and they’re smelling the roses.

For the CSCO’s already in the field, they face a year and, more realistically, a decade of struggle and uncertainty. I believe that 2021, specifically, is going to be a year where CSCO’s will face rising tides of cyberattacks, the ripple effect of COVID-19’s assault on global supply chains, and fierce competition to obtain the very best data available.

The Chief Supply Chain Officer job role will be in higher demand, and it’ll come with a lot of work; a lot of stress, and weighty responsibilities.

8. The Right Professionals

Are quite often impossible to come by*, that should say. Not because they aren’t out there but because there are too many people sending CV’s and résumés these days. Finding and retaining the right people is imperative to your organisational success ─ the best and biggest companies have cultures of employee-development, inclusivity and innovation. In supply chain-orientated positions, businesses will thrive if they can find analytical professionals who can work with datasets that allow them to explore and identify solutions.

It’s all about getting the best people for the job. Also, courtesy of our recent pandemic, cleanliness of the workplace has become a top priority – organisations must ensure that premises are right for their people too.

7. Love Thy Neighbour

Regardless of the tech development of the day, there is one crucial element that will always be vital to a successful supply chain: people. Beyond system interfaces, AI-enhancement, and sustainability, human interaction, and the subsequent partnerships that come from affiliation and friendships are essential across supply chain networks. Without them, there would be no foundation on which a system can be built.

In essence, relationships are the glue that holds together the supply chain network, and it’s imperative that in a world excited by technological advancement and enhancement, we do not forget the human aspect that made it all possible, to begin with.

6. Dirty Data

Well, we can’t talk about AI and machine learning systems without talking about the data that they both thrive on. It’s a well-known fact that these systems learn from the data that they’re fed, and unfortunately, there’s a lot of dirty data out there. I don’t mean something dodgy that you find online; I mean rogue data that is inaccurate, incomplete or inconsistent.

If you feed sophisticated AI-enhanced systems dodgy datasets, it’s a recipe for disaster. Companies need to ensure that the quality of data that they feed to their systems is the very best available. That is the only way to maximise the potential of any machine learning-based system. Unfortunately, as more people acquire Internet accessibility, more data-harvesting companies will creep out from the abyss, and there’ll be an influx of dirty data on the infamous data marketplaces, which will hinder ongoing development.

We also need to rid ourselves of this notion that digital transformation is an off-the-shelf purchase, quickly installed, and easily accessible through ERP systems. In reality, true transformation will involve investment in your people as well as the data analytic capabilities ─ great data is only insightful if you’ve got staff who understand its potential.

6. Dirty Data

Well, we can’t talk about AI and machine learning systems without talking about the data that they both thrive on. It’s a well-known fact that these systems learn from the data that they’re fed, and unfortunately, there’s a lot of dirty data out there. I don’t mean something dodgy that you find online; I mean rogue data that is inaccurate, incomplete or inconsistent.

If you feed sophisticated AI-enhanced systems dodgy datasets, it’s a recipe for disaster. Companies need to ensure that the quality of data that they feed to their systems is the very best available. That is the only way to maximise the potential of any machine learning-based system. Unfortunately, as more people acquire Internet accessibility, more data-harvesting companies will creep out from the abyss, and there’ll be an influx of dirty data on the infamous data marketplaces, which will hinder ongoing development.

We also need to rid ourselves of this notion that digital transformation is an off-the-shelf purchase, quickly installed, and easily accessible through ERP systems. In reality, true transformation will involve investment in your people as well as the data analytic capabilities ─ great data is only insightful if you’ve got staff who understand its potential.

4. Trade Tariffs

While we’re on the subject of politics, we should address tariffs. Unfortunately, since humankind, trading partnerships have always involved some sort of tariff ─ I say “unfortunately”, very loosely, as any good agreement should be sanctioned with some degree of protectionism. The problem is, just as our environment and ecosystem are volatile, so too is our politics. When political tensions are high, tariffs tend to be used as a weapon to protect the interests of domestic industries.

It’s a necessary evil but one that will likely put immense strain on the global supply chain network, as organisations attempt to negotiate the best deals in sometimes limited and restricted circumstances.

3. Political Motives: Globalisation vs Localisation

Unless you’ve had your head buried in the sand this year ─ for which, you’ll be forgiven ─, you will know that political tensions have been ridiculously high. 2020 is setting a new bar for ‘cataclysmic fallout’ between world leaders. Unfortunately, when politics goes sour, so too do supply chain norms and values.

Chinese manufacturers, in particular, have been under fire this year for their inability to supply the goods and services that they usually do, in a timely fashion, during the pandemic. As the self-titled “manufacturing hub of the world”, even in times of crises, everybody expects them to continue with business as usual. Usually, that would be classed as “unfair”, but unfortunately, in a globalised market economy, it’s an inevitability.

In an effort to avoid any future disruptions through overreliance on one nation, organisations in the Western world are looking to diversify their supply chains portfolios, with both nearshoring and onshoring as top priorities. Diversification is an opportunity for domestic manufacturers to compete again, as the business world shifts to a mindset of quality over quantity. This norm has been sadly lacking in recent years, for the sake of cutting costs.

2. Eco-Friendly Initiatives Hinder Logistics

Given that autonomous vehicles might not be “just around the corner”, as many news outlets and manufacturers would like you to think, there’s another issue looming over the supply chain networks that allow our societies to thrive: carbon emissions. During the COVID-19 pandemic, there has been exponential growth in ecommerce sales. Why? Because society was locked down and shopping online is a handy way to avoid nipping to the shop. If you look at the easily accessible graphs surrounding ecommerce sales, you’ll see that there is a huge spike in 2020, versus year-on-year statistics.

Naturally, with more sales, there are more deliveries, and with more deliveries, there are more CO2-spewing delivery vehicles on the road. The problem I’m about to highlight if you haven’t guessed it already is the newfound trend of banning delivery lorries from entering urban centres during “peak hours”. The trend has been sweeping European countries across the last five years or so, and I’d wager that it’s only going to continue.

As a result, companies will be forced to invest in eco-friendly alternatives ─ go electric, essentially. This could prove difficult, incredibly costly, and might even push industry-leading commerce platforms to adopt a new strategy that removes daytime deliveries.

It’s completely necessary but wholly disruptive, and not necessarily in a good way.

1. Automated Vehicles

You’ve probably seen the news about automated vehicles. Companies like Tesla, ZF, and others have been pioneering them with relative haste across the past couple of years. The narrative is this: the driver of the future isn’t a driver, but a passenger of an electric-powered, AI-controlled, futuristic-looking set of wheels. It’s a pretty picture, and I reckon we’d all like to have a go. The same claim is made of supply chain logistical networks ─ we’ll have thousands of autonomous delivery lorries and freight-hauliers bombing it up the motorways without a human in sight.

While the concept is idyllic and the prospect revolutionary, there is a major problem that needs to be addressed before it becomes a reality. They’re not wholly legal ─ not yet, anyway. Countries across the world are introducing new legislative bills to address the issue, with growing pressure from lobbying automotive manufacturers who are trying to redirect the industry, but we aren’t there yet. And, with the concerns over safety and the potential unpredictability of artificial intelligence, it could be a long time until we see fleets of autonomous vehicles traversing the global supply chains.

On the bright side, electric vehicles are here. That’s step one.

SCDigital

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