How is the logistics and supply chain management industry evolving – and what developments do we need to consider for the year to come?
We read the market reports, and identified key areas of change, and here we break these down for you with the major trends we expect to see in this industry in 2022 and beyond.
The recent pandemic has affected every part of the value chain, from raw material sourcing to end customer. It is testing the commercial, operational, financial and organizational resilience of the majority of companies across the globe. COVID-19 has highlighted risks and resiliency gaps for many organizations. CEOs are looking to get on the front foot when it comes to disruption and innovation, with 67 percent saying they will increase investment in disruption detection and innovation processes.
Elastic Supply Chains
The past year has shown more than ever that supply chains must be responsive and flexible in order to deal with market fluctuations and unforeseen outside influences. The days of reducing inventory to the furthest possible degree may be ending; instead, organizations will need to respond to growing volatility in consumer behavior with “elastic” strategies — the flexibility to expand and contract capabilities to meet demand within a given time frame.
The concept of elasticity is especially useful when companies come to recognize supply chain execution as an end-to-end process, starting with order entry and extending through procurement, manufacturing, inventory and warehouse management, and transportation and distribution; not forgetting, of course, financial aspects.
When implemented successfully, an elastic supply chain can scale up or down, even with the most unanticipated patterns of demand. It can help to reduce costs, improve service, minimize risk and enhance a company’s competitive edge.
The recent pandemic has affected every part of the value chain, from raw material sourcing to end customer.
Objectives and Key Results
Objectives and key results (OKR) can play important roles in operationalizing supply chain strategies. Measuring what matters is crucial to the success of any business, regardless of whether it’s embracing new trends and technologies. OKR allows companies to focus on measurements that matter, and eliminate those have no impact on supply chain performance. In the years ahead, expect virtually every industry to adopt OKR as the framework for global supply chain strategy execution. As the pandemic unfolds, executives and supply chain leaders must ensure that corporate goals stay aligned with autonomous and connected supply chains, through the use of execution frameworks such as OKR. Companies will need to invest in capabilities to capitalize on the dynamic insights coming from their supply chains. They should also drive corporate ethics policies that define acceptable business practices and determine operational boundaries. At the same time, talent requirements must shift to those who can understand supply chain dynamics, adapt to changing environments, and decide the best way to make use of new technologies.
Equipment and vehicles are more automated than ever before
It’s likely that in 2022 and beyond autonomous vehicles and equipment will increasingly emerge as a key trend in the logistics and supply chain sector. Equipment that we’ve seen increasingly automated includes:
Automated storage & retrieval: Robotic order picking systems and other storage or retrieval technology lets robots find, pick and move inventory around large warehouses – at a much faster rate than humans can and with less risk to safety.
Automated trucking: It’s believed that use of self-driving trucks will be widespread long before self-driving cars. In fact, investor funding for this technology has ballooned since 2017, growing from US$0.1 billion to $5.6 billion in 2021.
Automated delivery: Delivery drones are the final piece of the logistics puzzle, automating the last mile of delivery using either driving or flying robots. Starship Technologies is a company that uses small, six-wheeled drones to move goods within a small radius, and has completed 2 million deliveries as of 2021. Amazon Prime Air is leading the way in flying drones, offering 30-minute delivery to some customers thanks to this technology.
Robots such as these can offer huge benefits, including increasing safety and automating menial, repetitive tasks – and allowing human workers to focus on other value-adding activities.