2020 Supply Chain Management Trends
- Intro to 2020 Supply Chain Management Trends
- “Greening” the Supply Chain
- Artificial Intelligence (AI and Machine Learning
- Cloud-based Technology
- Emphasis on Security
Intro to 2020 Supply Chain Management Trends
The new year is upon us, and with the end of 2019 we reach the end of the decade – and the beginning of 2020. Throughout the last decade, the main trends were digitization and globalization. Supply chains have lengthened and extended across borders, bringing a whole new host of opportunities and challenges. 2020 supply chain management trends will further these shifts.
“Greening” the Supply Chain
The push for environmental sustainability is putting new pressure on supply chain managers. Green supply chain management practices can be included in every link of the supply chain from material sourcing and selection, product design, manufacturing processes, product delivery, and even product disposal after the product’s useful life. Some ‘green’ practices are simple – like energy efficient lighting in the warehouse and planning delivery routes to minimize mileage & fuel consumption. But developing a truly green supply chain requires complete methodological shifts to most companies’ current supply chain practices.
One green practice expected to grow in 2020 is the circular supply chain. The supply chain is typically linear, with a product designed and created then distributed to the end user – only to be disposed of by the end user. With the circular supply chain, the product is eventually recycled back to the beginning of the supply chain to be reused for manufacturing. Green practices like this are great ways to incorporate environmental sustainability into the supply chain.
Green supply chains are the key to 2020 as consumers continue to call for environmental practices and global governments seek to add environmental legislation. Plus, green supply chain practices lead to overall savings for companies once they are implemented.
Artificial Intelligence (AI) and Machine Learning
AI has been a buzzword for a few years now, but it’s still only just beginning to infiltrate supply chain management. At it’s heart, artificial intelligence is algorithms that enable computers to act more like humans; that is, to solve more complex problems. Machine learning takes AI one step further and allows the computer to improve its algorithms based on further collected data for better results.
Enterprise corporations have already leapt on AI. One notable example is Amazon, who uses AI to track customers’ purchasing habits and to use that information to make recommendations for other products. This is an obvious place for AI and machine learning on the eCommerce B2C end of the supply chain. But the opportunity for AI can be found throughout the supply chain.
AI can be used in supply chain planning to analyze huge datasets and provide an analysis of supply and demand trends for better procurement. AI can even be used in conjunction with hardware and, while self-driving cars still need some improvement, AI could help companies stay one step ahead. One example is using machine learning in the aftermarket industry where, with the help of sensors on machines, it can detect patterns and determine in advance when a part will break. With machine learning monitoring hardware and sending signals that a spare is needed before the part breaks, the machine will be able to continue working without unnecessary interruption.
We have not reached the end of globalization. In fact, as we enter 2020, we’ll see new avenues open up for globalization. Historically, the global stage has been dominated by enterprise-sized businesses, and small- and mid-sized businesses (SMBs) have faced challenges in competing globally such as accessing distribution networks that serve enterprise companies.
But technology is making global markets more accessible to SMBs than ever. For example, governments are opening access to export tools and guidance. Technology has also increased visibility into shipping and customs requirements with software that tracks these regulations and ensure companies are meeting the requirements. Plus eCommerce companies are now helping SMBs extend their customer base across borders with integrated marketing and sales solutions.
The world is continuing to grow smaller. And while trade relations and tariffs between countries may be changing, now companies have ways to enter new markets to compete globally.
Automation can come in a few different forms, but overall automation is using technology to manage a workflow and improve processes. People usually think of robots in the warehouse or self-driving trucks when they hear automation within the supply chain. Hardware is one prime example; we don’t have drones delivering packages yet, but robots can be found in warehouses such as Amazon. Amazon has introduced these robots into a small number of fulfillment centers. They transport pallets of inventory from one location to the another, creating a more efficient supply chain.
But automation is penetrating other areas of the supply chain as well – as software. Now, most supply chains – even for SMBs – are ‘going paperless’; that is, they’re digitizing. This is apparent with companies using Enterprise Resource Planning (ERP) software and Warehouse Management Systems (WMS) to manage the overall business, supply chain and warehouse. While these tools still require some manual labor, now there are a multitude of software add-ons that will automate any number of tasks – from inventory optimization to credit card processing to shipping solutions – to minimize mistakes and increase productivity.
On the heels of automation and globalization comes cloud-based technology. With supply chains expanding across borders and managed by software comes an uptick in the need for cloud computing. Cloud computing is on-demand computer system resources, like data storage, servers and computer power, delivered over the internet. Cloud-based services help you lower your operating costs and easily scale your business as it grows. Cloud-based technology especially benefits SMBs as they no longer need to invest in extensive and expensive technology infrastructure.
Of course, cloud-based technology has the added benefit of being accessible from almost anywhere. Since it’s delivered over the internet, information and data can be easily shared throughout the supply chain with suppliers and customers, keeping avenues of communication open and ensuring that information is accessible to everyone who needs it. The Cloud is helping businesses stay connected to their supply chain while cutting costs, making businesses more competitive than ever.
Emphasis on Security
With the rise of cloud-based technology also comes new concerns around security. It seems like you can’t go a month without hearing of some massive breach of a company’s system that compromises user data. As company’s shift to the cloud, so do security attacks. These cyber security attacks can come in a range of forms and can lead to a range of losses as well such as intellectual property or customer data.
There are plenty of cloud security solutions on offer that help protect unauthorized access and data breaches along with other threats. As supply chains grow longer and include more information-sharing, risks increase – but so do the options for storing data more securely in the cloud.
Overall the 2020 supply chain management trends focus on technology bringing new opportunities to supply chain management and bringing discrete areas of the supply chain closer together. Opportunities that have been available to enterprise-sized companies are opening up for SMBs to explore. So which of the new trends will you be embracing in the new year?
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