Top 6 Supply Chain and Logistics Trends for 2023
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Published:
February 16, 2023
Reading Time:
6 minutes
This decade began with something that humans have never seen before. The whole world was ordered to be locked in their houses simultaneously. A few years ago, this may have seemed like something out of a science fiction novel. Alas! We experienced it in real life.
Then, Brexit came into effect in February 2020, which created new bureaucratic hurdles in the supply chain. According to a report by Bloomberg, 4 in 5 UK businesses consider Brexit to be the biggest disruptor in the supply chain in recent months.
And if that wasn’t enough, the world saw a new conflict growing in Ukraine. As soon as the conflict began, a series of sanctions from both sides followed. Then companies pulled out of Russia. And then, oil-producing countries like Saudi Arabia announced a significant decrease in output. Fast forward to today, the global supply chain trouble is still going on.
In this article, we will discuss how these new developments in the geopolitical sphere can give rise to new trends in supply chain and logistics. So, let’s dive into it.
Then, Brexit came into effect in February 2020, which created new bureaucratic hurdles in the supply chain. According to a report by Bloomberg, 4 in 5 UK businesses consider Brexit to be the biggest disruptor in the supply chain in recent months.
And if that wasn’t enough, the world saw a new conflict growing in Ukraine. As soon as the conflict began, a series of sanctions from both sides followed. Then companies pulled out of Russia. And then, oil-producing countries like Saudi Arabia announced a significant decrease in output. Fast forward to today, the global supply chain trouble is still going on.
In this article, we will discuss how these new developments in the geopolitical sphere can give rise to new trends in supply chain and logistics. So, let’s dive into it.
1. Friendshoring
Friendshoring is a term that consists of two words: friend and shore. Under friendshoring, countries encourage sticking to trading with friendly countries instead of potentially hostile states. For example, a company in the UK may source raw materials from Germany instead of Russia.
The 2020 decade started with a major challenge. First, there was the pandemic, and now there’s an ongoing conflict between Russia and Ukraine. To make things worse, China, a country that heavily dictates the global supply chain, faced a new surge of the pandemic that left many locked in their homes.
Jim Noble, a University of Missouri professor, says, “Supply chains are still disrupted and they will continue to be. I think there are systemic issues that haven't been resolved." The world has never seen such disruptions in the global supply chain before. Although friendshoring may not completely solve the current supply chain issues, it can make things a lot more predictable in the logistics sector.
The 2020 decade started with a major challenge. First, there was the pandemic, and now there’s an ongoing conflict between Russia and Ukraine. To make things worse, China, a country that heavily dictates the global supply chain, faced a new surge of the pandemic that left many locked in their homes.
Jim Noble, a University of Missouri professor, says, “Supply chains are still disrupted and they will continue to be. I think there are systemic issues that haven't been resolved." The world has never seen such disruptions in the global supply chain before. Although friendshoring may not completely solve the current supply chain issues, it can make things a lot more predictable in the logistics sector.
KEY TAKEAWAYS
- The pandemic along with the current conflict in Ukraine has affected logistics and supply chain operations globally.
- Countries may resort to friendshoring, which involves limiting the supply chain to friendly countries only.
- There has been a rise in the use of robots instead of humans in the in-house operations of warehouse facilities.
- The use of artificial intelligence (AI) is also on the rise in logistics. This may also mean that lesser humans will be employed because technology can do the job error-free and efficiently.
- Businesses that use agile in logistics tend to do well in risk management andinventory placement.
2. Robotics in Logistics
Even though robotics is related to technology, it’s not the same as artificial intelligence. While AI can predict demand and keep track of inventory, robots can actually pick up stuff and transport it to places without human intervention. This technology is going to be a game changer as far as in-house operations are concerned.
You may have heard about SaaS, which stands for Software as a Service. Well, in 2023, you better get used to the word RaaS, which means Robotics as a Service. Under a RaaS service, enterprises can rent autonomous mobile robots (AMRs) from a third party. The robot rental company can visit the warehouse and set up the infrastructure and software. This means that the logistics company doesn’t have to worry about learning new technology. They can simply focus on their line of work while an external RaaS partner handles the robotics side of things.
Once again, this may imply that lesser workers may be required and this may affect the career outlook of logistics and supply chain workers. On the positive side, robots don’t have to quarantine during a pandemic and can continue their work as usual.
3. More Sustainable Supply Chain
Sustainability is going to be a key trend in the coming years in many industries, including supply chain and logistics. Take Apple for instance. The tech giant is building a carbon-neutral supply chain by using more recycled materials. For example, the antenna lines in the newer versions of the iPhone are made from upcycled water bottles. Also, they have decreased the use of plastic wraps on their packaging by 75% as compared to 2015.
Another example of this is Starbucks. The company claims to buy 3% of the entire world’s coffee. The coffee is sourced from nearly 400,000 farmers from around the world. The company follows the Coffee and Farmer Equity (C.A.F.E.) approach to ensure ethical sourcing.
Whether by government mandates or a sense of responsibility, more and more companies are jumping on the sustainability bandwagon. This trend will likely become a norm in the near future.
Whether by government mandates or a sense of responsibility, more and more companies are jumping on the sustainability bandwagon. This trend will likely become a norm in the near future.
4. Use of Artificial Intelligence in the Supply Chain
warehouses by 2026. The company also predicts that by 2025, 25% of supply chain decisions will be made by artificial intelligence. Again, this shouldn’t come off as a surprise. AI is taking over almost every industry and the trend is likely to continue. This can also mean that lesser humans will be employed in the logistics sector as AI will handle a whole lot of work. How? Let’s discuss this.
In logistics, AI can be of great assistance in inventory management. For example, if there are medicines in the warehouse with an expiration date, AI can send a warning message when the expiration date is too close. Furthermore, AI can also be used to reduce waste, eliminate human errors, forecast demand, and cybersecurity.
You may have already heard of the term Internet of Things. If you don’t know what it means, here’s a simple explanation. You see, the internet, as we know it, connects different computers with each other. Similarly, Internet of Things (IoT) connects other devices with each other. Amazon’s Alexa is the perfect example of this. If you can connect Alexa to your air conditioner, you could simply say, “Alexa, it’s hot in here. Turn on the AC.” And boom! It will happen. So, how is IoT beneficial in supply chain and logistics? Let’s find out.
DHL is one of the most renowned logistics companies in the world, and they certainly use IoT in an intelligent way. For instance, DHL attaches IoT devices to warehouse roller cages and bins. This way, they can ensure that roller cages don’t collide with each other or an employee doesn’t get hurt. Sensors are also installed to monitor and control temperature. By doing this, a lot of money can be saved on electricity bills. Besides this, workers are given a wristband with an activated heart rate sensor. This further improves their safety within the premises.
As of now, big companies like Amazon and DHL are using IoT on a large scale. However, it’s likely that smaller logistics companies may soon start incorporating IoT at their facilities.
According to research by McKinsey, 75% of companies that were at the top for risk management and inventory placement were agile. Furthermore, 76% of companies that were doing well in the labor and asset flexibility areas were agile. Whether it’s risk management or flexibility, agile practices can be very helpful to run operations smoothly in such an unpredictable world.
As you can see, agile can make even logistics and supply chain management more efficient. It’s likely that this trend could continue and more companies will start using agile to handle their logistics.
Supply Chain Strategy experts can create a foolproof strategy that covers everything from sourcing and manufacturing to distribution and last-mile fulfillment. On the other hand, JIT (Just In Time) Inventory Management consultants can guide you on how to have just the right amount of inventory. This is really crucial in saving costs, improving cash flow, and decreasing waste. Furthermore, if you hire Workflow Automation consultants, they can optimize your operations by designing and automating tasks in the best possible manner.
If this sounds interesting to you, and you want to find a supply chain consultant for your business, then we can totally help. Here at Consultport, we connect top consultants who have worked with big firms to businesses that need expert advice. Your next consultant could just be a phone call away, so get in touch with us now.
In logistics, AI can be of great assistance in inventory management. For example, if there are medicines in the warehouse with an expiration date, AI can send a warning message when the expiration date is too close. Furthermore, AI can also be used to reduce waste, eliminate human errors, forecast demand, and cybersecurity.
5. Growth of IoT (Internet of Things) In logistics
You may have already heard of the term Internet of Things. If you don’t know what it means, here’s a simple explanation. You see, the internet, as we know it, connects different computers with each other. Similarly, Internet of Things (IoT) connects other devices with each other. Amazon’s Alexa is the perfect example of this. If you can connect Alexa to your air conditioner, you could simply say, “Alexa, it’s hot in here. Turn on the AC.” And boom! It will happen. So, how is IoT beneficial in supply chain and logistics? Let’s find out.
DHL is one of the most renowned logistics companies in the world, and they certainly use IoT in an intelligent way. For instance, DHL attaches IoT devices to warehouse roller cages and bins. This way, they can ensure that roller cages don’t collide with each other or an employee doesn’t get hurt. Sensors are also installed to monitor and control temperature. By doing this, a lot of money can be saved on electricity bills. Besides this, workers are given a wristband with an activated heart rate sensor. This further improves their safety within the premises.
As of now, big companies like Amazon and DHL are using IoT on a large scale. However, it’s likely that smaller logistics companies may soon start incorporating IoT at their facilities.
6. Incorporating Agile in the Supply Chain
Agile is no longer just used for software development, even though that was its original intended purpose. Logistics businesses are also employing agile practices to ensure that they can respond to change quickly.According to research by McKinsey, 75% of companies that were at the top for risk management and inventory placement were agile. Furthermore, 76% of companies that were doing well in the labor and asset flexibility areas were agile. Whether it’s risk management or flexibility, agile practices can be very helpful to run operations smoothly in such an unpredictable world.
As you can see, agile can make even logistics and supply chain management more efficient. It’s likely that this trend could continue and more companies will start using agile to handle their logistics.
How Supply Chain Consultants Can Help
Since we’re talking about supply chain and logistics, let’s spare a few seconds to discuss the experts who can take your supply chain operations to the next level. Supply chain consultants can critically analyze your supply chain and logistics operations and recommend the most effective, time-efficient, and cost-saving approach. Now, let’s discuss different variations of supply chain consultants and how they can help your logistics business.Supply Chain Strategy experts can create a foolproof strategy that covers everything from sourcing and manufacturing to distribution and last-mile fulfillment. On the other hand, JIT (Just In Time) Inventory Management consultants can guide you on how to have just the right amount of inventory. This is really crucial in saving costs, improving cash flow, and decreasing waste. Furthermore, if you hire Workflow Automation consultants, they can optimize your operations by designing and automating tasks in the best possible manner.
If this sounds interesting to you, and you want to find a supply chain consultant for your business, then we can totally help. Here at Consultport, we connect top consultants who have worked with big firms to businesses that need expert advice. Your next consultant could just be a phone call away, so get in touch with us now.
