The supply chain solutions industry in the last quarter of the year 2020 showed us something the world hasn’t seen in the last century or would want to. Pandemic-induced mayhem where the best-laid plans for better services at lower costs, and happiness all-around has practically gone with the wind. The last quarter of the year 2020 shows us trends that point to something radically different from what was seen a year back. By the end of this mayhem, things may go back to the old days but with important lessons learnt. Some of these would include the following:
Shorten the chain where possible. Buy local if need be, and not always global
Cheapest at origin is not necessarily the best deal if the origin itself is far away and results in stretching the supply chain with obvious weak links. Over-reliance on supply chains that goes to and from a single source could be a disastrous decision where the origin suddenly come down for any reason. It thus makes sense to first have multiple sources and well-appointed supply chains for each. Also, the nearer the source with a lesser number of links, the better it is, more so in times of distress. Over-dependence on China had resulted in lopsided development of shipping routes vis-à-vis other sectors.
Create agile Supply chains that are also circular
Agile supply chains typically mean having means of movement that can be scaled and speeded up to match needs. Costs could be a consideration but when it’s about entire industries folding up due to non-availability of raw materials, the ability to create additional or new supply chains is what matters. The Covid-19 pandemic has showed it in every way, be it within the country or outside that one needs to have clearly defined alternative supply-chains that remain independent of the existing order, and take over as soon as the main supply chain falters. Though typically such supply chains develop during a crisis to take care of things, they ought not to be closed when the problem disappears. They ought to be well-defined and healthy, because the best answer to an unexpected problem, is an expected solution.
Another thing which concepts like e-Commerce have shown is that supply chains cannot afford to be one-sided. If anything can be bought, it can also be returned. One of the reasons for the growth of all the e-commerce giants is that they have very healthy return policies which call for a healthy return logistics system which remains just as well-formed as the main supply chain.
More mechanization, automation and IoT in the supply chain
When humans falter, which they do quite often, with or without a pandemic, it is machines and tech products everyone needs to turn to. Pandemic or no pandemic, the world of Supply Chains need to have more mechanization including robots and extensive use of all manner of computers and systems to make the working of such chains easy, smooth and faster. Be it picking cartons and boxes and moving them around in warehouses or automated trucks which load containers being unloaded from ships, all these are examples of automation which are only growing by the day. Add to these for ease of use are IoT and Edge computing which lets machines “talk” among themselves and take things ahead instead of having a human interface which could falter from time to time. Cabots they are called, short for collaborating robots, and as per the International Federation of Robots, despite the devastation caused by the pandemic, there is still a chance of the industry growing by 10% in 2020 and beyond! AI, Big Data and Analytics suddenly seem important as the days before we were never encountered before.
Pandemics could be the thing we need to live with and find solutions to. But to know more about solutions, where they evolved, under what circumstances and resources, as also the quantum of success, one needs information in the form of trends, and a measure of predictive analysis to know when to introduce the next strategic move. AI, driven by Big Data and Analytics, are then the perfect vehicle using which the slightest of trends can be analysed. Using AI, one can also map the exact time by when a shift in activity can be thought of instead of depending solely upon guesswork. In addition, with so much information at one’s finger-tips, one can also design strategies that completely suit the particular trends and prevailing circumstances.
Use of technology in documentation, contracting and paperwork
The issue of ownership, onus, safekeeping, proper handling etc are some of the concerns that have constantly plagued the supply chain industry. With volumes of work going up, the need to document things has gone up as well. With documentation invariably being two steps behind the activity which occasions it, and given its cumbersomeness, what most organizations end up with is lost efficiency, speed and piling up of issues both expected and unexpected, genuine and otherwise. One way by which the issue of legality and genuineness of each document, and gauging steps to be taken to address it, is by drawing up smart contracts that have the backing of block-chains. The inviolability of such contracts and automatic actioning of steps in sync with such contracts is today reducing instances of work going slow, and penalties piling up. Iron-clad guarantees backed by the surety of action is making things easier and simpler in the industry.
Supply chain solutions moving to the cloud and being used as SAAS
Stand-alone on-premises systems are increasingly going the legacy way with one of the major reasons being the global spread of most prominent supply chains. With every software organization wanting clients across the world, the best way to go about it is to put the entire infrastructure on the cloud and use the net to access it. For users spread out like most Supply Chain operators are, there couldn’t be a better way to access critical information through the cloud. Add to these are the trends towards making everything a paid service like SAAS, IAAS and PAAS. These reduce capital expenditure which becomes quite a consideration in times of economic slowdowns. In fact, by converting the most prolific of services into EMI-led services, the scope of more supply chains, irrespective of size and type of work being accomplished, increases dramatically. For most supply chain operators, there’s another matter of concern when it comes to software. Security and Upgrades. Legacy services then become a mill-stone round an organization’s neck with most looking towards lightening it with a service that offers everything from efficiency, economy, safety, and most of all the ability to scale up. Cloud-based supply chain solutions assure these and more.
These are by no means the only trends visible in the supply chain solutions industry this year. These by far are the most visible. In the span of a few months, with the pandemic lifting, newer trends and issues could lead to newer services as solutions.