Supply chain management trends

2020 supply chain management trends

Tracey Baker, Marketing Manager

4 min read


2020 supply chain management trends

The new year is here and we’re well into 2020. Throughout the last decade, the main supply chain trends were digitalization and globalization. Supply chains lengthened and extended across borders bringing a whole host of new opportunities and challenges. So, will the forthcoming decade be any different? Here’s a summary of the supply chain management trends we think will prevail in the coming 12 months.

Green supply chains

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, including material sourcing and selection, product design, manufacturing, product delivery and product disposal after its useful life. Some environmentally-friendly practices are simple – like installing energy efficient lighting in the warehouse and planning delivery routes to minimise mileage and fuel consumption. But for most companies, developing a truly green supply chain requires a complete strategic shift in their current supply chain practices.

Green supply chainsOne green initiative that’s expected to become more common in 2020 is the ‘circular supply chain’. As we know, the supply chain is typically linear, with a product designed, produced and then distributed to the end user – only to be disposed of by the end user. In contrast, a circular supply chain involves the product eventually being recycled back to the beginning of the supply chain, to be reused again in 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 a greater focus on environmental practices and global governments add further environmental regulations and legislation. Plus, green supply chain practices can 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. Artificial intelligence uses algorithms to enable computers to act more like humans and solve complex problems. Machine learning takes AI one step further and allows the computer to learn and improve from experience (using collected data) for better results.

Large enterprise corporations have already embraced AI. One notable example is Amazon who uses AI to track customers’ purchasing habits and use this information to make recommendations for other products. Ecommerce is an obvious place for AI and machine learning, but opportunities to introduce and benefit from AI can be found throughout the supply chain.

Artificial intelligence examples across the supply chain:

AI can be used in supply chain planning to analyse huge datasets and provide an analysis of supply and demand trends for better procurement. It can also be used in conjunction with hardware for machines, such as automated guided vehicles (AGVs) that can be used to move goods around warehouses. Machine learning is also being put to good use in the aftermarket industry where, with the help of sensors, it can monitor machinery and determine in advance when it’s likely to break down. With machine learning monitoring hardware and sending signals that a spare part is needed before the machine stops working, the risk of shutdown and unnecessary interruption is vastly reduced.

Globalization

Global Supply Chain ManagementWe have not reached the end of globalization. In fact, as we enter 2020, we’ll see new avenues open up for small and mid-sized businesses (SMEs) in particular. Historically, the global stage has been dominated by enterprise-sized businesses and smaller competitors have faced challenges in competing globally, such as accessing distribution networks or having the capabilities to trade on an international scale.

But technology is making global markets much more accessible for SMEs than ever before. For example, governments are opening access to export tools and guidance. Technology has also increased visibility of shipping and customs requirements with software that tracks these regulations and ensures companies are meeting the specified requirements. Plus ecommerce companies are now helping SMEs 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

Automation is one of the top 2020 Supply Chain Management TrendsAutomation comes in many forms and simply uses technology to manage workflows and improve processes. People usually associate robots or sophisticated conveyor systems in warehouses with supply chain automation. And hardware certainly is one prime example – we don’t have drones delivering packages to our front doors yet, but robots can be found in warehouses such as Amazon. They transport pallets of inventory from one location to the another, creating a more efficient supply chain.

Automation, however, is penetrating other areas of the supply chain too and more and more businesses are ‘going paperless’ and digitalizing their supply chain. Even SMEs are investing in enterprise resource planning (ERP) software and warehouse management systems (WMS) to manage their overall business, supply chain and warehouse. There are also a growing number of ERP add-ons that will automate any number of tasks – from inventory optimisation to credit card processing and shipping solutions – all to minimise mistakes and increase productivity.

Cloud-based technology

On the heels of automation and globalization comes cloud-based technology. The Cloud can be used to host business systems, and store and transmit data over the internet. Cloud-based technology especially benefits SMEs, as they no longer need to invest in expensive technology infrastructure, instead it allows them to scale their systems as their business grows.

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 with suppliers and customers throughout your supply chain, 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 operational costs, making businesses more competitive than ever.

Emphasis on security

Cloud securityAs technology gets more advanced so do the attacks on IT systems and software. It seems like you can’t go a month without hearing about a  massive security breach, but actually systems are being threatened relentlessly. Cyber security attacks can come in a range of forms (if we list any here they will be out of date in weeks, as the technology progresses so quickly) and can disrupt services, stop production and steal intellectual property or customer data.

There are plenty of security solutions on offer that help protect unauthorised hacks and data breaches. As supply chains grow longer and include more information-sharing, risks increase – but so do the options for protecting your systems.

Conclusion

In summary, the supply chain management trends of 2020 will focus on technology bringing new opportunities to businesses and helping them with connectivity and efficiency improvements. Technological advancements that have previously only been embraced by larger enterprise-sized companies are becoming more accessible and economically viable to SMEs to explore. So, which of the new supply chain trends will you be embracing in 2020?

Thinking of adding automation to your to do list for 2020? Check out how you can save more money and time with an inventory optimisation solution.

 


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Tracey Baker, Marketing Manager

4 min read

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