While watching the news can be challenging, as we see reports of the impact of war, catastrophic weather events and other atrocities, there are things you can do to protect your supply chain and make it more resilient. This will make it easier for supply chain managers to minimise disruption and juggle price increases while keeping customers and the board happy.
According to the Association for Supply Chain Management, the number one priority for supply chain and inventory managers is supply chain digitalisation, including artificial intelligence and cyber security. Big data, analytics and sustainability are also big topics for 2024, along with building supply chain resilience and agility to adapt to changing economic circumstances.
In this blog, we provide an overview of these trends, which you can read about in more detail in our eGuide.
Replacing manual processes with digital systems and processes provides additional supply chain visibility to mitigate or eliminate issues earlier. By reviewing your business strategy, you can align opportunities with your business objectives and prioritise your supply chain digitalisation plan. These could be:
Supply chain visibility, such as tracking items from leaving your supplier to arriving in your warehouse and being delivered to your customer, is fundamental to the smooth running of your supply chain and includes advanced technology such as artificial intelligence, Internet of Things devices and robotics. Another key tool for visibility is blockchain, which we discuss in the next section on cybersecurity.
As digital supply chains operate globally, they are more vulnerable to cyberattacks. Digitally connecting with partners increases exposure to privacy breaches, identity theft, reputation damage, financial loss and worse.
As well as using firewalls and anti-hacking technologies to protect the integrity of sensitive information, you can use blockchain technology. Blockchain digital transaction ledgers create tamper-proof records of every transaction in the supply chain to provide transparency and traceability and increase trust in supply chains.
Ensuring partners safeguard their networks, devices, people, and programs enhances customer and partner trust while reducing costs and liabilities associated with cybersecurity incidents is vital.
When reviewing suppliers, communicate your security needs and any minimum requirements they must adhere to, particularly where you are connecting systems. For example, ensure any software suppliers have relevant certifications such as ISO27001 and SOC 2.
Regularly review processes to maintain security levels and new practices and security methods.
Making data-driven decisions can revolutionise a business’s inventory and supply chain management. They can refine their offerings, develop targeted marketing campaigns, and foster greater customer loyalty.
Big data combines tools, processing systems and algorithms that can interpret insights from data. It can come from many sources and be mixed, unstructured, and continually updated.
Big data, near real-time insights, advanced analytics and automation allow companies to mitigate disruption through digital, agile supply chain management. Implementing predictive and prescriptive analytics, combined with historical data, algorithms and robotics, will provide increased visibility, synchronised planning and execution, data-driven decision-making, predictability, agility and profitability.
Due to their interdependency, a problem in one part could compromise the entire global network. To ensure business continuity, it’s vital that businesses can navigate the turbulent times and come out the other side thriving.
The right systems and processes will allow you to forecast and anticipate disruptions, potentially avoiding them altogether. Evaluate your supply chain resilience by looking at previous responses to previous supply chain issues. You can then plan how to strengthen your supply chain to prevent similar issues reoccurring. Supply chain resilience strategies that can reinforce risk management and provide contingency plans include buffers, supplier diversification, alternative production capabilities and transport processes.
Supply chain buffers can effectively eliminate variability and mitigate risk to help you meet unexpected increases in customer demand.
The three primary buffers used in supply chain and inventory management are inventory, capacity and time. These involve either holding extra stock, using extra staff or paying overtime to meet temporary demand increases, paying for express orders or delaying shipping a customer’s order to avoid paying additional carriage costs.
A systematic approach to implementing regular supplier audits and reviews based on key criteria helps understand their performance and keeps supply chains running smoothly. You can then collaborate to build and leverage strategic relationships so they will prioritise you over other customers.
Inventory optimisation software can support your supplier selection process. For example, by entering supplier lead times and costs into your platform, the system can recommend the best supplier to deliver your order most efficiently.
As supply chains operate globally, companies have preferred to use international suppliers who might be cheaper even with longer lead times. With geopolitical tensions and global events affecting demand and supply, there’s a trend to use more regional suppliers to increase supply chain resilience and reduce the impact of any disruption.
Reshoring and nearshoring have become common as disruption continues to affect global supply chains. While items might be slightly more expensive to produce, the cost can be offset by potential missed sales due to supply shortages or backlogs.
Multishoring allows you to have multiple suppliers of the same items in different locations. This allows you to hedge your risk by being able to call on a supplier in a different region if one is experiencing issues.
As we live through the impact of climate change, customers are becoming increasingly environmentally conscious. They are looking for their suppliers to focus on sustainability as well.
Environmental, social, and governance (ESG) regulations are also becoming more prominent globally. In 2024, the US will join other countries in requiring public companies to provide greenhouse gas emission reports.
Brands that have proactively incorporated sustainable and ethical practices into their operations are reaping benefits in enhanced brand reputation, increased customer loyalty and improved financial performance.
Knowing where to start when becoming more environmentally responsible can be tricky.
We’ve already discussed digitalising your supply chain and optimising your inventory, which can reduce your environmental impact by reducing excess stock and minimising waste to impact your bottom line positively. Other green options include:
Circular economies prioritise responsible, restorative, and regenerative aspects of the global ecosystem, which are imperative to reducing the impact on the planet and maintaining production schedules.
The circular economy can help with sustainable business processes and saving money. As raw materials prices fluctuate, companies can break down finished products and return them to their natural form to reuse or resell.
Implementing a circular supply chain involves working with your suppliers and customers to develop new working practices that aren’t detrimental to the item’s quality and performance.
Supply chain leaders face multifaceted and demanding challenges but also opportunities for innovation and growth.
Inventory and supply chain management teams that embrace change and leverage technology like inventory optimisation software will reap the benefits. EazyStock’s powerful inventory optimisation solution can automate processes, save money and increase operational efficiencies.
Contact our team for more information on how EazyStock can help you overcome supply-chain issues to thrive in 2024.