Looking into 2022, the easiest prediction to make is that the supply chain world will remain chaotic. Labor shortages abound, materials remain scarce, and expectations to deliver are higher than ever before. So, what does that mean for how companies will approach their supply chain strategy in 2022? They’ll need to rethink everything or get left behind.
As such, we predict the following for supply chains in the new year:
1. The labor shortage continues:
It’s no surprise to anyone that the first prediction for the new year is that the labor shortage we’ve all faced in our supply chains will continue well into 2022
Once we get into the new year, companies will begin to implement strategies they’ve been sourcing through 2021. There’s no area of labor that can be left unturned – be it labor planning, employee retention, labor efficiencies, or robotics augmentation. Every strategy and profit-impact option must be re-evaluated and rescoped. The way we’ve approached labor in the past will not be successful in the future.
2. Need for REAL real-time visibility:
Now more than ever companies are recognizing the importance of real-time visibility in their supply chains. In fact, the ones who aren’t, are being left behind. Disruptions are rampant and costs are soaring. Teams need to be more proactive in the way they handle their processes, people, and products. What’s happening in the supply chain now wasn’t happening two hours ago. The key is to get immediate visibility into issues as they’re happening – across DCs, WMS solutions, and partners.
3. Rising vendor expectations:
Companies are starting to demand more from their vendors in terms of functionality, cost-effectiveness, and reliability. Supply chain teams now need tools that work, use their data in ways that haven’t historically been done before, and provide a competitive advantage. Companies are no longer settling for clunky, one-size-fits-all business systems that come with costly upgrades and don’t work the way teams need them to in the new realities of today’s rapidly moving supply chain.
4. Vendor diversification:
Just as companies look at restructuring their labor strategy from every possible angle, companies should be looking at their suppliers and vendors in order to diversify across their core product lines. Whether ships are stuck off the coast of Los Angeles or there’s a massive demand hike due to consumer behavior that wasn’t forecasted, manufacturers need to be able to source their core materials through other previously developed relationships. With this comes added complexities of supplier management and data processing, but the organizational efforts to manage and maintain a responsive supplier network will be what gives some companies a competitive advantage while others are left with empty shelf space.
5. Building resilience through active collaboration:
Nobody can plan for every possible scenario, but teams still need to be prepared for anything. Now companies are realizing that all teams (and even customers and partners) having real-time access to the same data helps each perform better. Active collaboration also reduces the need for constant reporting and status sharing. If all teams have access to the same data, teams reduce their dependency on each other, freeing up time and resources to focus on core responsibilities and supply chain strategies.
6. More consumers will expect sustainable supply chains:
Consumers are holding corporations more accountable for their environmental footprints. Inefficient supply chains are not only costly, but also hurt the environment more. While the pandemic slowed or stalled many environmental trends in 2020, expect a growing resurgence toward companies investing in building more sustainable processes.
7. An ongoing need to optimize warehouses:
Warehouses are expensive to run and maintain. With rising supply chain costs and labor shortages, it has become increasingly important for companies to find new and innovative ways to optimize the warehouse. This would include using technology to find and fill some productivity gaps, having algorithms complement human expertise, and leveraging real-time visibility during the shift to maximize throughput and optimize the supply chain.
A lack of predictability is the one uncertainty when you look at where we’ll go in 2022. What that means for supply chain professionals is that they need to be prepared for the unexpected by rethinking everything. At the heart of it all is data and information sharing across not only their network, but also among customers and 3PL partners. The assumption that something will change is the new mindset and being able to pivot operations to optimize and react is the difference between being competitive or being a news story.
Alex Wakefield is CEO at Longbow Advantage, the brand behind The Rebus® Platform and the global leader in warehouse visibility. Longbow equips customers with a deep layer of insight into even the most complex distribution network’s real-time workings and consolidates legacy processes.