Taking stock of logistics trends and predictions is the best way for shippers to start the new year. The state of supply chain tech in 2022, or supply chain technology, will be one for the record books. The industry has certainly experienced more than its fair share of disruptions in the past two years. The traditional strategies and even some minimal e-commerce retailers faced uncertainty and a need for more technology.
Still, the ability to adapt and recover following a disruption often comes down to how well an organization uses technology and how well team members can put such technologies to work. That's especially true given the ongoing effects of the pandemic. As reported by Bastin Gerald via SupplyChainBrain, "nearly 72% of businesses (are) suffering detrimental effects related to the pandemic. Now, even as disruptions persist, supply chains the world round have begun picking up the pieces and charting new territory to recover." Of course, there are always the usual contenders in the mix, like blockchain and autonomous trucks, but those technologies are still out in the foray of logistics. That's why it's important to have an objective view of what's happening to supply chain tech in 2022 and what it means for your organization's future.
This is perhaps the biggest and most significant change in the perception of supply chain management. The software-as-a-service (SaaS) model has given companies of all sizes the ability to scale operations without breaking the bank. Shippers can make strategic moves across their entire network of needs. Ultimately, it "allows companies to generate a four-to-five-times return on investment by partnering with one service partner to support all or part of their supply chain needs, including procurement, production control, manufacturing, quality, warehousing, and logistics. It offers a virtual supply chain team enabled by cloud software," Gerald wrote.
With the promise of greater returns, more shippers are turning to SaaS platforms and capabilities to overcome disruption. Still, SaaS platforms rely on a human element—the actual users navigating functions and making changes to shipments.
If a team member mistakenly accepts, tenders, or otherwise executes changes for a shipment, it could undermine the whole point of using the platform. This is especially true for avoiding late deliveries, which may lead to alienating up to 13% of customers, as found in an Oracle survey. Essentially, the SaaS platform is the foundation for creating positive experiences. Any use of SaaS technology represents a form of outsourcing, outsourcing the technology, not necessarily the people using it.
That's why outsourcing has become so popular across 42% of distribution and logistics processes, reports Finances Online. Furthermore, the ability to use technology to predict what might happen (29%) and understanding what's currently happening through data analyses (41) form two of the leading priorities within the industry. It's all about information, and that information is helpful to team members that need to monitor inventory levels, account for changing consumer demands, and plan outbound shipping strategies.
The elasticity of the supply chain, or the ability to return to a pre-disruptive state, is another of the top trends driving supply chain tech in 2022. Much of that elasticity comes from figuring out what's happened, what's going to happen, and what needs to happen to create a competitive advantage, Gerald noted.
"The days of reducing inventory to the furthest possible degree may be ending; instead, organizations will need to respond to growing volatility in consumer behavior with "elastic" strategies — the flexibility to expand and contract capabilities to meet demand within a given time frame.
The concept of elasticity is especially useful when companies come to recognize supply chain execution as an end-to-end process, starting with order entry and extending through procurement, manufacturing, inventory and warehouse management, and transportation and distribution.
When implemented successfully, an elastic supply chain can scale up or down, even with the most unanticipated patterns of demand. It can help to reduce costs, improve service, minimize risk and enhance a company's competitive edge."
This sounds familiar because it's the triad of descriptive, predictive, and prescriptive analytics, showcasing the best outcome through a comprehensive analysis. As a result, that information can be helpful for many applications, including managing inventory, maximizing throughput, and ensuring more on-time, in-full deliveries. Such applications are also more actionable and based on specific shipping needs.
For example, if inventory levels are tight within a given facility or would otherwise be delayed, it may make more sense to consider having the manufacturer ship the product. Similarly, sending all parcel shipments by air works for time-sensitive freight, but what happens if the freight could still arrive on time by ground?
These questions reflect the need to paint a fuller picture of logistics needs to understand where opportunities may lie and how your team can turn such opportunities into meaningful improvements.
Sustainable, green logistics is another movement affecting the adoption and use of supply chain tech in 2022. Green logistics is simply about avoiding waste and ensuring all moves are as environmentally friendly as possible. Obviously, this doesn't mean upgrading an entire fleet to natural gas or EVs. Nor does it imply your team needs to work in the dark. Instead, it's about making decisions based on what data may reveal.
Let's revisit the example of going by ground instead of air. Air transit is the most expensive form of shipping on earth. Fuel for planes costs more, resulting in a higher cost of shipping. As the uncertainty over the Omicron variant grows, that capacity may very well decline. With aircrews placed in a finite space for a set time, there's little room or means for avoiding possible infection. However, other modes may be more suitable and still send your shipments to their destinations on time.
As further explained by Supply Chain Digital, "Advanced tech will help procurement teams find sustainable supply partners, fueling buying decisions that are both responsible and cost-effective. These tools can also identify supply chain risk, predict carbon footprints of alternative supply options, and more. Investing in and leveraging this type of strategic intelligence will only become more critical as companies' ESG performance captures investor and market attention." Again, such investment depends on creating a culture of collaboration where everyone on your team is vigilant and mindful of efficiency and ways to avoid waste.
The final piece of the puzzle in supply chain tech in 2022 comes from the realities of the labor market. Companies of all sizes and industries have made waves over limited labor resources in recent months. Many are also struggling to simply keep the doors open. CNBC explained it best, "Companies are no longer worried about state and local governments shutting businesses down.
"Instead, the businesses are coping with a shortage of workers as people call out sick, get exposed to the virus, or scramble to find childcare. And the threat of more supply chain woes looms as the highly contagious variant spreads across the globe."
The shortage is also problematic for companies that have forgone implementing new technology. Everything is a manual, basic process without technology, and such activities are not scalable. However, using supply chain technology to work smarter, not harder, allows companies to identify potential errors in labels or packaging details, e.g., anomaly detection, and collect information from across multiple platforms, e.g., data aggregation. Together, these functions create a more informed and agile supply chain. That agility is essential to overcoming the talent shortage and ensuring the future of shippers.
Even with that in mind, it's equally important for shippers to continuously work together with their teams to identify potential issues and figure out new solutions to current problems. That's the premise of using a data analytics and business intelligence platform like Intelligent Audit. And such functionality will be integral toward unlocking new efficiency as disruptions mount in 2022. That's because the past two years have shown one ultimate truth—the next disruption is right around the corner. It's coming, and your team needs to be ready.
The best-laid plans for supply chain tech in 2022 are based on continuous innovation and the ability to do more with less. However, doing more with less doesn't necessarily mean lowering your team member count or trying to outsource more non-essential staff. Instead, it's about putting your team's talents to work and letting technology do the proverbial heavy lifting. That's what the advancements in supply chain technology have to offer, and by understanding the top trends surrounding technology, it's easier to see how your team can put those capabilities to work. Speak with a supply chain technology expert at Intelligent Audit to get started now.
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