2021 Supply Chain & Inventory Management Trends

4 supply chain management trends for 2021

Tracey Baker, Marketing Manager

4 min read

The global economy was hit hard in 2020 by the outbreak of Covid-19 and, right now, there’s no real end to the pandemic in sight. With tough months ahead, agility and resilience is the name of the game for supply chain management (SCM) teams. With that in mind, here’s a summary of the supply chain management trends we think will prevail in the coming 12 months:

  • Supply chain digitalisation
  • Supplier diversification
  • Focus on ecommerce
  • Cloud-based technology

Let’s look at the impact of each supply chain management trend in turn.

1. Supply chain digitalisation

For many businesses, the Coronavirus pandemic has acted as a catalyst and accelerator to digitalisation. Many CEO’s that were ‘putting off’ investment in new technologies are now embracing Trends 2021them full-on. Manufacturers, suppliers and wholesalers have been forced to adopt new ways of working, with social distancing closing offices and reducing operational capacity. In the warehouse, technologies, such as advanced robotics, are being used to automate picking and packing lines, whilst Radio-Frequency Identification (RFID) is growing in adoption to track goods in real-time. Buzzwords such as the Internet of Things (IoT), blockchain, supply chain control towers and artificial intelligence are becoming more widespread.

In 2021, supply chain management teams will be focused on dealing with erratic customer behaviour, disrupted supply chains and increasing logistics costs. With little certainty about what the future holds, many are rapidly adopting digital processes, to make their operations as agile and resilient as possible, so they’re best placed to respond to the changing economic and social landscape. 

Even small and mid-sized businesses are investing in enterprise resource planning (ERP) software and warehouse management systems (WMS) to manage their overall business, supply chains and warehouses. 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.

Supply chain digitalisation frees-up time for teams to manage customer expectations and solve disruption issues. In addition, technologies ensure data is more accurate, so decisions can be made based on facts and not ‘guess-work’.  End-to-end transparency allows for optimum efficiency and cost-savings right along the supply chain, helping businesses be more competitive during difficult economic times.

2. Supply chain diversification

Supply chain diversification is a key component for supply chain resilience. Relying on one supplier (often as a means of securing a competitive price) brings huge risk, as many procurement teams found out in 2020. Before the pandemic, the average supply chain took five weeks from start to finish, but this has since doubled to ten weeks.

Global Supply Chain ManagementWhilst supply chain diversification began in the UK when businesses started to prepare for Brexit, the onset of Covid-19 made more SCM teams review where they sourced their raw materials and inventory items and how they could reduce the risk of supply chain disruption.

Some experts believe that businesses which have spent years building global supply networks are already shifting their attention to building relationships with more local suppliers, making a trade-off with between efficiency and cost against resilience and business continuity.

2020 proved that the age-old proverb “don’t put all your eggs in one basket” has never been more true. Whilst supply chain diversification is not a foolproof answer, it can mitigate supply risk and keep sourcing options open.

3. Focus on ecommerce

ECommerceEcommerce really came to the forefront in 2020 with the pandemic “accelerating years of growth in just weeks“. Many businesses embraced this channel as a means of reaching their customers, when other channels were no longer viable. While the growth in ecommerce sales is expected to slow in 2021, it still remains a valuable route to market and will be part of many business’s omni-channel strategy for the foreseeable future.

To be successful in the ecommerce marketplace, many SCM teams are having to adapt their inventory management strategies to ensure speedy and reliable order fulfillment. This includes the ability to accurately forecast customer demand, competitively price goods (as price comparison is easier online) and ensure stock availability. Inventory management teams need complete transparency of their goods across each channel, so they can ensure supply mirros demand as closley as possible.

4. Cloud-based technology

On the heels of automation and digitalisation 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 – also key, as COVID-19 is forcing more and more people to work remotely. 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.

During 2020 we saw a strong increase in the acceptance of cloud solutions and there is a huge shift on the market, e.g. nearly all providers of ERPs try to offer solutions that are 100% cloud, replacing their on-premise offerings. In 2021 we are sure this trend towards cloud will even grow further, also because more and more people work from home in these times of a pandemic, so there is a big urge that they can access all the tools they need from home easily.

Looking ahead to 2021

The year ahead looks uncertain, which is why the biggest 2021 supply chain trends are focused around building agility and resilience, so companies can quickly adapt to sudden changes and disruptions. Looking for additional ways to safeguard your supply chain? Check out our whitepaper below:

ebook - Using inventory optimisation software to support your supply chain recovery plan


Tracey Baker, Marketing Manager

4 min read

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