Supply chain predictions: getting back on the front foot in 2022
It has been another challenging year for the supply chain industry. 2021 followed on from where 2020 left off, presenting significant disruption for shippers, carriers and logistics service providers (LSPs).
Ongoing complications related to Covid-19 – most notably travel restrictions and transport delays – were compounded by widespread worker and materials shortages. For example, it’s estimated that the total number of HGV drivers in the UK alone dropped by nearly 70,000 in Q2 of this year, making the market approximately 90,000 drivers short of optimal levels. And the situation is even more serious in Poland, where the driver shortage is expected to reach 200,000 in 2022.
What’s more, Volkswagen and Apple recently reported that a global shortage of semiconductors resulted in them missing out on €500m and $6bn of profit respectively – illustrating the very real financial impact of logistics disruption.
This all points to the rapidly growing importance of supply chain transformation. More specifically, using digital tools and platforms to help the industry become more resilient, agile and efficient.
The simple truth is that supply chain businesses have been on the back foot for the best part of two years. But, although the current disruption is expected to continue into the new year, 2022 presents an opportunity for them to get back in front. As such, the next 12 months of the industry will be characterised by three key trends.
1. Intelligent execution
Businesses that have embraced real-time visibility over the last 12 months will take the next step on their digital transformation journeys by further integrating and leveraging AI and machine learning capabilities. This is how businesses will extract the most value from their visibility data, applying these next-generation technologies to improve and automate decision making.
Cognitive platforms will provide businesses with recommendations in real time, as well as predict situations and make autonomous decisions based on set parameters. Applications include dynamically rescheduling time slots, assigning the best equipped carrier to specific jobs and seamlessly connecting the payment process.
This form of ‘predictive transportation’ – transforming supply chain processes and creating value for the entire ecosystem of suppliers, retailers, shippers and carriers - will take on a newfound importance over the coming months. As well as increasing agility, businesses will use it to drive resilience in logistics operations and position themselves to respond to whatever disruption comes their way.
Predictive transportation is already having a big impact for those businesses that have been brave enough to digitally transform. And it’s going to come to the fore in 2022.
2. Workforce empowerment
Ongoing labour shortages will leave supply chain businesses with no choice but to support their overstretched workforces with technologies that make them more productive and efficient. This will be essential to meeting consumer demands and retaining existing employees.
In a recent survey analysing the state of the real-time visibility market, increasing process efficiency ranked as the top supply chain management priority for logistics businesses in 2022. As such, businesses will look towards real-time visibility data and process automation, both of which can drive significant efficiency improvements. For example, by using real-time data to track the location and status of shipments, businesses will be able to optimise their transport monitoring processes and reduce the number of required check calls by up to 80%. Streamlining this traditionally labour-intensive manual activity will help businesses manage resources more effectively and free employees up to focus on higher-value activities.
And this is just scratching the surface of what’s possible. The most forward-thinking businesses will go a step further and integrate real-time data into wider execution and planning processes, enabling employees to make smarter decisions and work in the most efficient ways possible. Whatever approach businesses take, 2022 will be the year when workforce empowerment takes on a whole new meaning.
3. Sustainability at the core
Building environmentally friendly supply chains will take on a newfound importance in 2022, as the pressure on businesses to reduce their carbon emissions and drive sustainable operations continues to grow.
This is an area that has reached heightened prominence in 2021. The green agenda is now part of society’s consciousness like never before, as illustrated by the fact that meeting customer demands for sustainable products is now thesecond biggest influence on supply chain organisations’ sustainability efforts.
Over the coming months, more businesses will take steps to reduce their carbon footprint. For example, they will tap into real-time transport data to decrease empty mileage and more effectively match capacity and demand. In addition, shippers and carriers will integrate tools to precisely measure and report on their logistics emissions across the entire supply chain and all transport modalities. This will enable them to benchmark their performance against industry peers and access the insights required to steer their operations towards being climate neutral.
Ultimately, sustainability will shift from being an afterthought, to a core element of the supply chain sector. That’s why 2022 will see sustainable tools and practises integrated into logistics operations as part of a global push to make tangible progress on the journey to net zero emissions.
FIND OUT MORE