In this era of technological advancements and digital transformation, supply chains also have to evolve rapidly to satisfy the changing demands of businesses and consumers. The supply chain disruptions experienced in recent times are mainly due to the pandemic, COVID-19. The supply chain disruption continues as the pandemic is still a threat in many regions and economies around the world. The stunted economic growth and high inflation are the outcomes of these supply chain disruptions.
An example of a resilient supply chain is ZARA, an international fashion brand. As the fashion industry faces both demand and supply chain disruptions on a regular basis because of the uncertainty prevailing in the industry, Zara has developed a robust supply chain strategy. Zara follows lean manufacturing to create a sense of rarity, centralized product and development, in-house production, automated production and warehouse facilities, and utilizes work cell that enables the brand to respond quickly to disruptions.
To future-proof the business from these disruptions, organizations should stay ahead in the supply chain management trends. The supply chain manager should understand the pulse of the industry in order to adapt to new technologies. Let’s explore some of the supply chain trends that can help businesses in business continuity by avoiding and mitigating the risks associated with supply chain disruptions.
Trend #1: Automation and Robotics in Warehouse Management
There is an increase in the use of automation and robotics in warehouse processes to fulfill orders. These technologies can help in bringing huge cost savings and efficiency in stock and warehouse management.
· Supply Chain Resilience
Supply chain resilience is the capability of businesses to survive disruptions and reduce its effects on expenses, revenues, and customers. Resilience enables organizations not only to respond to these disruptions effectively and promptly but also to achieve a competitive advantage in the business. Resilient supply chains are developed using advanced technologies and standardized processes that allow them to foresee and respond swiftly to the risks in the future.
Strategic planning is the key to achieving resilience as it coordinates all the supply chain components to bring agility and visibility. Strategic planning helps businesses to anticipate risks, reduce disruption and enhance overall operations.
A resilient supply chain also analyzes Big Data and leverages the insights extracted from the data sets to make a significant improvement in the workflows. Technologies like artificial intelligence and machine learning are not only helpful in managing Big Data but also in analyzing and extracting insights in different combinations. This helps supply chain professionals in receiving real-time insights during unexpected disruptions and respond swiftly to these events.
Trend #2: Supplier Diversification
Companies are outsourcing their supply chain operations by expanding supplier networks. Companies are building and maintaining relationships with different suppliers to mitigate the risk of supply issues.
· Supply Chain Agility
Supply chain agility can be defined as the ability to identify and respond to unforeseen changes in supply or demand promptly and reliably without compromising on the quality and the cost of the products. Agile supply chain business models also offer varying volumes and enhanced value to the customers within a short period of time. Despite the changes experienced in both demand and supply from various geographical locations and customers, the aim is to respond swiftly to the changes and instability.
Supply chain agility can be classified into two: structural and operational. To achieve structural agility, organizations have to recognize the supply chain instability impacting the medium to long-term business plans. Organizations have to take timely decisions based on the anticipated volatility to balance production according to the demands in the market or regulate usage based on the latest product trends.
To achieve operational agility, organizations have to make decisions quickly to standardize the use of supply chain resources to meet the demand changes. Operational agility enables organizations to meet supply volatility and short-term demand with faster response time.
Nike is an example of an agile, efficient, and smart supply chain. Nike outsources 100% of its footwear and apparel manufacturing to independent suppliers. Nike maintains constant communication with the suppliers and offers support by providing training and tools to the suppliers. Nike’s supply chain works basically on three key principles such as outsourcing, cost saving, diversification, CSR, and by reducing risks.
Trend #3: Focus on Sustainability
Enterprises are reviewing and implementing supply chain practices that align with environment-friendly processes.
· Supply Chain Sustainability
Supply chain sustainability is a tactical business decision that enables businesses to bring in ethical and environment-friendly business practices. These ethical and eco-friendly practices include sustainable resources, production, packaging, and delivery of manufactured goods. Sustainability in supply chain management in an organization can be defined as the upholding of social and environmental standards and best practices in their business operations.
The environmental best practices include dealing with issues such as pollution, greenhouse gas emissions, deforestation, water security, and other environmental problems. The social standards include labor practices, the health and safety of workers, forced labor, and working conditions within the organization. These issues should be handled properly as consumers are aware of the unethical practices prevailing in the supply chain industry. Since the consumers are well-informed about these issues, they might opt for other companies that follow these social and environmental best practices.
To develop supply chain sustainability, organizations must identify their supply chain management issues. The best way to achieve sustainability is to categorize supply chain processes into different segments. Then, the organization can adopt a supply chain in which waste management can be done by reusing and recycling the materials, A sustainable supply chain of an organization helps in cost control, building brand reputation and loyalty, and reducing risk and vulnerability.
For example, Starbucks follows sustainable supply chain processes as they focus on three key areas such as carbon emission, waste elimination, and replenishing of water. These sustainability goals were launched by Starbucks in the year 2020. Starbucks launched Coffee and Farmer Equity Practices in the year 2001, which is the initial step of the brand that initiated ethical supply chain practices in the industry.
Conclusion
Though the risks created by the pandemic in the supply chain industry have been handled by the business with its business strategies, still supply chain disruptions can happen for various reasons in the coming here. Hence, businesses have to invest in different ways to mitigate the impact of these disruptions and be prepared to deal with new challenges and supply chain trends.
To stay ahead of the competition, organizations have to adopt advanced technologies in supply chain management. Supply chain management jobs will see a growth of 28% in the coming years with various career options based on the US Bureau of Labor Statistics.