Time to read: 8 min

The supply chain continues to evolve rapidly, keeping pace with the breakneck technological advancements of the modern era. Though it can be difficult for supply chain managers and business leaders to stay on top of these changes, it’s crucial to do so if you want to maintain the integrity of your supply chain and see your business succeed. Rather than treading on the heels of change, your organization should try to get ahead of the trends that are shaping the future of supply chain management.

1. Artificial Intelligence and Automation

The use of artificial intelligence (AI) and automation is on the rise in many supply chains. Automation allows you to streamline repetitive tasks, while AI — which attempts to mimic human intelligence and “learn” — can assist with more complex, challenging tasks. 

In a world where speed and precision are crucial for success, both AI and automation are valuable ways to speed up your supply chain and remain competitive in your niche. Despite concerns about robots taking over human jobs, AI and automation are everywhere. If you don’t use them, your competitors will, leaving you far behind as they enjoy greater levels of success.

From making improvements to your assembly line to powering digital twin technology and everything in between, there are countless ways to incorporate AI and automation into your organization’s workflow. The key is finding tasks and processes that will help you save time or energy; often, the best tasks are time-consuming, complicated, or extremely rote. By turning these kinds of tasks over to a robot or computer, you and your staff can spend more time on projects that only a human can do, giving you an even greater return on this investment.

2. Increased Focus on Sustainability

As a growing number of consumers prioritize the environment, more businesses have increased their sustainability efforts, which are now seeping into the supply chain. Because there are so many different opportunities to focus on sustainability, you’ll need to tailor your efforts to suit the unique needs of your organization. 

In the coming years, businesses may turn to more extreme or drastic measures in the name of environmentalism. Some may choose to commit to sustainable manufacturing processes or attempt to become zero-waste. However, these attempts at sustainability may not be sustainable for businesses in the long-term. Such large shifts require a complete overhaul of each step of your supply chain, from how you source raw materials to how your products are transported to customers. 

This, in short, can be overwhelming and difficult to keep up with. It’s best to start with something small, such as updating your packaging design, as your organization adjusts to these changes or crafts a plan to make larger shifts. By making changes gradually and deliberately, you can increase your organization’s long-term commitment to sustainability, without overlooking any crucial steps or getting burnt-out.

3. Customization

You can expect to see an increasing level of customization in different parts of the supply chain. You may have to segment your supply chain, building a customized strategy and approach for each segment. 

Your customers, in particular, will likely continue to expect a personalized experience with your business. It can be difficult to keep up with mass customization demands, and you’ll have to consider different ways you can keep up. You may need to look into customizing your own manufacturing, ordering services like CNC machining and injection molding as you work to build prototypes and accelerate production without sacrificing quality or precision. 

Increasing customization becomes more realistic as you work on improving other aspects of your supply chain. For instance, you may find it easier to manage personalized customer orders if you can automate your order processing system, perhaps putting “standard” orders in one area and personalized ones in another. Essentially, if you look for ways to simplify other areas of your business, you can devote more time and attention to customization in your products.

4. The Internet of Things

The Internet of Things (IoT) is a network of physical objects that, powered by sensors and software, are connected to the internet. The IoT already plays a significant role in the supply chain, particularly when it comes to logistics, but with increasingly diverse applications, it will likely continue to grow in importance. In just a few short years, 50% of large companies could be using IoT and other advanced technologies to support supply chain operations.

In addition to providing more oversight in operations and transportation, it’s thought that the IoT can be used to improve warehouse management, fleet tracking, inventory control, and even technological and mechanical maintenance. IoT technology could even be used to create entirely smart warehouses and fleets, increasing the efficiency and accuracy of multiple areas of your supply chain. The value of the IoT cannot be overstated, as 

Depending on what kinds of IoT devices you use, you can use them in conjunction with other pieces of technology for even greater benefit. For instance, the information collected by a sensor in one of your warehouses could provide valuable data that helps you automate other processes, such as forecasting and asset tracking. This high level of integration will be essential as the supply chain becomes increasingly digital. 

5. Digitization

Digitization refers to the practice of putting information into a digital format. When it comes to securing the future of the supply chain, digitization is non-negotiable. Experts believe that effective digitization can make your entire supply chain more streamlined, mobile, and dynamic — all of which are highly beneficial for your organization’s bottom line

If you haven’t gone fully digital, keep in mind that the transition can be challenging. You have to find the right kind of technology to meet your organization’s needs, implement it correctly, and work out any internal difficulties. However, you can’t afford to not digitize. It’s already the present, and it’ll only become more integral to the supply chain in the future. If you are unwilling or unable to digitize your supply chain, you’ll likely struggle to succeed going forward.  

6. Strengthened Relationships

Technology is a significant force in supply chain management, but so are the humans wielding it. There’s a lot of emphasis on beating your competitors in business, but everyone can enjoy more success by working together. You will need to focus on fortifying your relationships with your team members, vendors, and suppliers to increase collaboration and cooperation at each step in the supply chain.

Communication should be your priority. Not only is it the first step to building any relationship, but it can also provide you with valuable data and information. You can use this additional insight to help improve your external and internal processes, helping everyone become more streamlined and efficient.

Look for mutually beneficial ways to support both your and others’ goals. Share information, proactively solve problems to avoid creating more work, and address unexpected issues as they arise. The stronger your relationship becomes, the more you both stand to gain from it. 

7. Risk Management and Resiliency

In an increasingly volatile and unpredictable world, the supply chain is constantly at risk of disruption. You cannot control the weather, predict political events, or foresee the effects of an unprecedented pandemic — but you can control how your supply chain prepares for and responds to these threats. 

It’s your responsibility to decrease that risk as much as possible so your supply chain remains stable during uncertain times. The steps you need to take to improve the resiliency and flexibility of your supply chain will depend on what the biggest potential disruptions are. For instance, if you source raw materials from a politically volatile area, you could look into sourcing that material from another geographic area that is more stable. Should anything change, you can pivot quickly and minimize the impact of that disruption. Simply put, thinking about the disruption and your planned response in advance will help you thrive amid these shifts and uncertainties.

8. Increased Visibility

Few things are as important for supply chain management as visibility and transparency. Increased visibility will help you understand the state of your supply chain as a whole, as well as at each link, no matter what kind of volatility threatens your organization.

Thanks to the digitization of the supply chain, increasing visibility is now a highly achievable goal for many organizations. With the right technological solutions, you and your team can access information on every link in your chain at a moment’s notice. 

With more visibility in your supply chain, you can prevent minor issues, such as order errors or delivery delays, and respond to any problems that do arise more quickly. Being able to access that kind of information quickly and easily is imperative to boost the efficiency, reliability, and resiliency of your entire supply chain and organization.

9. Circular Supply Chain

Traditionally, supply chains have been thought of as linear: starting as raw materials, goods flow in a straight line through the supply chain until they are a finished, disposable product. Now, more people subscribe to the idea of a circular supply chain, wherein raw materials, and even discarded products, are recycled and re-introduced into the manufacturing process. 

The circular supply chain model certainly helps with sustainability efforts, but it also has economic benefits for your organization. The earth has a finite amount of raw materials, and as they become more scarce, they will increase in price. Further, if you’ve already paid for materials or a product, but you aren’t able to use it for its intended purpose, you won’t waste money on something you’ve already purchased that’s still perfectly useful. You stand to save more money on reduced storage, transportation, and administrative costs, too.

Strengthened professional relationships and increased reliance on technology (including AI and IoT) can also help your efforts to operate under a circular supply chain. If you and the other people and companies you work with are willing to share information and resources, you can further decrease waste and keep more materials in production. Additionally, with the right technological solutions, you can stay updated on the current state of your materials and products in real-time.

10. Cloud-Based Solutions

Similar to digitization, cloud-based software solutions are the way of the future in supply chain management. Traditional and localized supply chain management solutions won’t cut it. To stay competitive, you need accurate, agile, and accessible solutions for your organization.

Software-as-a-Service (SaaS) models are particularly useful for supply chain management. Not only is SaaS reliable and secure, but it’s highly efficient and convenient. All of your organization’s data is stored in the cloud, and you and your team can get the information you need at any time, from any place. With a global and digital supply chain, the efficiency provided by SaaS solutions is crucial to support your organization as you move into an increasingly fast-paced future.

As these trends continue to evolve, so too will the art of supply chain management. New developments will lead to unforeseen consequences, both positive and negative. To stay up-to-date and position your organization for success, you’ll have to attempt to anticipate and continue to adapt to these still-unknown changes in the supply chain.