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Supply chain and Logistics strategy: Top 4 trends

This year disruptions have resurfaced the need for supply chain managers to re-think their supply chains and strategy roadmaps.  The following topics are the trends at the top of the agenda:

Flexible Logistics partnerships

Warehousing and shipping companies, of all participants in supply chain, are re-thinking their value as supply chain service providers and requested to consider increased flexibility in their offering.  Logistics start-ups are designing innovative concepts like crowd shipping platforms and flexible warehousing arrangements in response to the entrance of the sharing economy to the logistics industry. Risks are shared between service provider and customer, short term contracts are increasingly popular, also finding new partners and wider network of logistics providers is on the cards to achieve lowest cost and greater supply chain resilience.  The on-demand and flexible logistics offering for both warehousing and transport services is needed to support sudden fluctuations of demand and supply volume as well as inventory that require variable and often only temporary storage requirements.

Supply sourcing

Recent events have challenged traditional product sourcing strategies that typically work with only a single product origin.  Product supply and overall supply chain resilience has been impacted by recent events, forcing procurement managers to discover less conventional solutions when ordering raw materials and finished goods from suppliers spread over global geographies.  Local vs overseas sourcing is being brought back to the discussion table as well as the dual sourcing (more than one supplier source) to increase reliability.  Nearshoring (outsourcing in a nearby country) is also an option for faster shipping. Manufacturers, on the other hand, are also re-evaluating where to base their infrastructure in order to move their products closer to the end market/consumer.

Modern logistics practices

All the operations inside warehouses and across road, air and sea networks represent most of the supply chain costs and deserve all the attention. Supply chain managers need to continuously transform and re-design their logistics operations to exceed previous year efficiency targets.  Scalable automation, digital solutions, flexible labour resourcing, flexible carrier selection, cross-company collaboration are some of the modern examples of logistics practices that achieve more responsive, efficient, malleable and cost-controlled operations.  It’s important to highlight that automation and digital operational management solutions are no longer accessible to only few players with large throughput volumes; nowadays, these technologies are achieving transformational efficiencies at a competitive cost and with shorter investment paybacks.

End-to end visibility

Visibility is a hot topic for 2021, as it is a key priority in most strategic road maps of major industries across the globe.  The visibility concept encompasses the ability for participants in the supply chain to track, trace, analyse and make crucial decisions while the supply chain and its participants are performing their typical activities. A transparent supply chain allows the digital visualisation of physical activities and information flows through technology-enabled platforms that allow interpretation, analysis and predictability of outcomes.  In a highly visible supply chain, trends can be analysed; disruptions can be predicted, and optimisation can be rolled out much faster, given scenarios can be simulated and action plans designed according to replicated results.  Risk mitigation strategies can also be drawn from scenario planning and partner evaluation to identify potential risks and consequences.

Modern and technology-driven solutions are increasingly effective to manage the common problems experienced by supply chain managers during this year of disruptions. The action plans and solutions mentioned in this article are becoming increasingly used as answers to increase resilience, efficiency and flexibility across logistics and supply chain operations.