Evolving Trends in Supply Chain Management – Creating Resilience in an Interconnected World

Over the past 3 years there have been transformational changes brought about by supply chain management as businesses face increased volatility and strain caused by new risk factors like pandemics and travel bans.

Organizations need to build resilience if they are to manage risks effectively, but it needs more agility than ever before and unfortunately its cost might be higher than expected.

Robotics & Automation

Robotics refers to the use of programmable machines which can take over from humans in industrial processes, this includes both traditional industrial robots and collaborative robots.

These systems are flexible because they can be programmed for other functions apart from their main tasks. For instance evention uses RPA and AI to automate cash management at hotels and casinos – tracking transactions, reconciling with point of sale systems, verifying drops and payments tracking.

Rather than focus on global efficiency as an end in itself we should aim at building resilience instead. In line with this GRD has highlighted a number of inspirational projects that exemplify resilience rather than efficiency thinking for our global society.

3D Printing

Supply chains that are resilient must be able to rapidly detect change and respond accordingly; therefore data driven supply chain networks need to be dynamically resilient at low costs while remaining agile enough to enable quick adjustment of production capacity with demand fluctuations.

A good example is 3D printing which has revolutionized manufacturing by enabling localized production closer to its point of use thus significantly reducing inventory levels along with shipping costs and carbon emissions also lowering carbon footprints simultaneously.

Printing consumes far less material compared to subtractive manufacturing methods resulting into much lower reject material volumes being produced.

Artificial Intelligence (AI)

Many companies find it difficult dealing with massive amounts of data generated within their supply chains. This process can be automated by AI systems thereby eliminating manual entry processes as well as reducing error rates associated with them.

In addition these systems have ability to detect patterns on a large scale and anticipate unexpected interruptions thereby providing quick fixes that minimize downtime.

Similarly AI can quicken new product introduction (NPI) times for businesses and keep prototyping processes fast – our 2023 State of Manufacturing Report revealed that 54% of manufacturers prioritize faster NPI times.

Last-Mile Delivery

Supply chain managers are now opting for localized operations as part of their risk reduction strategy. This might be due to transport infrastructure congestion, geopolitical shifts, natural disasters, extreme weather events or raw material shortages.

Localization also helps companies mitigate political risk and withstand economic instability such as unforeseen trade war between USA and China.

One trend gaining traction among enterprises is the use of software-as-a-service (SaaS) solutions to enhance supply chain visibility. SaaS platforms enable collaboration through shared access rights besides improving efficiency in supplier-buyer communication.

Circular Economy

The current focus on risk management and resilience is paving way for building robust supply chains by reducing dependence on global suppliers while strengthening local provider networks.

Geopolitical risks, transportation costs, delays and visibility problems can be eliminated by localizing supplies which should also lead to better visibility, planning & execution synchronization, data driven decision-making processes, predictability plus agility at the same time.

Designing products with less resource requirements coupled with recovering raw materials from waste creates a more resilient business model since buffers need not be increased neither additional stockholding done incase there are disruptions.

Smart Contracts

Smart contracts are computerized arrangements programmed to execute upon meeting specified conditions, thereby cutting out intermediaries and saving time as well as money.

This kind of payment could help reduce procure-to-pay gaps by automatically transferring payments between buyers and sellers immediately they are due hence lowering accounts payable costs for both parties involved. Additionally, smart contract technology can enable supply chains track food and materials while also meeting environmental, social and governance objectives.

Companies and nations need to shift from seeing global efficiency as the only aim of world integration towards creating resilience throughout all levels of communities. This will call for more collaboration between public and private sectors in managing complex risks like geopolitical instabilities, climate changes or even proliferation of hostile cyber attacks.

Digital Twins

Digital twins refer to virtual replicas that can be used in supply chains to enhance operational efficiency through data visibility. They offer insights into demand; inventory levels; locations of shipments; simulations; what-if analysis support among other things. Furthermore digital twins might save time & money spent on physical prototypes by eliminating them altogether.

A comprehensive change management plan with emphasis on employee training should be developed when planning for implementation of a digital twin strategy critical for building resilience within an interconnected global trading environment. Moreover beyond technology alone it must take into account all facets of supply chains while considering various ways of implementing it.

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