According to Gartner, Digital Transformation is the highest priority area for supply chain initiative funding. The residual effects of the COVID-19 pandemic have highlighted the fragility of global supply chains and elevated the importance of building responsiveness and resiliency.
For supply chains, 2021 has been the Year of Disruption. The frequency and severity of the disruptions and growing complexity pressures on supply chains have made many companies accelerate their digital transformation. To succeed in this ever-evolving environment, companies must nurture digital capabilities and adopt new strategies; they need to move away from the traditional operating model and adjust processes and technology to support resiliency, agility, and intelligent operations. This requires the ability to quickly harness and translate streams of information from across the global supply chain network. As companies (and entire industries) reshape their models, a window of opportunity has opened – one that offers the ability to gain significant competitive advantage.
With this as the backdrop, we’ve pulled together five key trends in supply chain planning we expect to see in 2022.
1. Increased Adoption of Flexible Platform Solutions
Covid-19 catapulted supply chain planning to the front-of-mind in every C-suite. Regrettably, too many companies didn’t have the right technology in place that could easily adapt to the complexity and never-ending changes supply chains continue to experience. Expect a year of accelerated technology uptake, as supply chain planning continues to shift to a competitive differentiator and revenue driver. To continue to support responsiveness and resiliency, there will be a focus on linking and connecting data across the end-to-end supply chain in a way that is more dynamic, flexible and responsive.
2. Sense, Respond, and React Faster with External Market Data
Unpredictable demand, supply shortages, transportation and labor disruptions, and supply chain pressures have impacted all industries. New consumer behaviors span all areas of life – from how we work to how we shop and entertain ourselves. In fact, many consumers have permanently changed their habits. Many product life cycles will never again be the same. To enhance decision making, organizations will need to get closer to the original source of information in real-time – from operators, machines, sensors, or devices. To consume and use this information to drive action, investment in advanced analytical techniques and AI will continue to increase helping more companies quickly sense and intelligently respond to changes in the supply chain plan.
3. Accelerated Digital Supply Chain Twin
With increased volatility and uncertainty on the supply and demand side, functional departments, manufacturing locations, distribution centers, external partners, and other stakeholders are each clamoring for greater visibility. But how connected are they? From parts suppliers in China to subassembly facilities in Mexico, from factory floors in Tennessee to distribution centers in the United Kingdom, from pallets in cargo containers on the ocean to packages sitting in delivery vans – what level of visibility is really available. The best way to knit this complex decision ecosystem together is with digital models that employ real-time data from any data system or source (IoT, telemetry, weather, point-of-sale, etc.) to simulate the real-world physical supply chain dynamics. With a more accurate representation of the physical supply chain, decisions can be made faster, more confident, and of higher quality.
4. Sustainability Drives Customer Value
Digital transformation goes beyond enhanced productivity and reduced costs. In fact, going digital delivers a more eco-conscious business. Supply chains impact every aspect of a company’s operation, a product’s lifecycle, manufacturing, transportation, returns, and how customers engage. Customers, employees, and shareholders don’t just expect more…they demand more. As we continue to go digital, companies will leverage the data models across the supply chain to align productivity goals and sustainability targets—at the same time. Companies are starting to realize this, and we see this helping push sustainability from a nice-to-have to a must have initiative. For supply chain leaders, this is a valuable opportunity to help decrease a company’s environmental footprint while positioning them for strong growth.
5. Greater Focus on Augmenting Planner Decisions
As talent becomes scarcer expect companies to pick up the pace of their digital transformation to help make critical processes less manual, high touch activities. More supply chain teams will leverage technologies such as machine learning and AI to automate non-value-added activity and augment complex decision-making. To enable the workforce of the future, organizations will seek access to technical capabilities and business domain knowledge in a way that is intuitive with easy to interpret AI that enables democratization to support multiple supply chain roles – from finance, IT, marketing, procurement, supply chain planning, sales, and beyond.
The last 18 months have accelerated the pace of change, made supply chain a household term, and exposed cracks in processes that quickly need to be repaired. The next year ahead holds potential, potential to make a difference and set forth your journey. Work with your team and discuss the five supply chain trends identified above and answer the following:
- How are your supply chain initiatives aligned to ensure 2022 is a success?
- Are you set up for success in 2022?
- Do you know where to start or do you need help to establish your first step?