Supply chain management has undergone significant change in recent times due numerous external pressures—these are 4 more key elements shaping it today.
When there are dramatic changes in the supply chain, there has to be an equally robust response. That is the challenge supply chain management has had to face over the past year and in recent years generally. Supply chains live and die by how they respond and adapt to the ever-changing environment around them. Quality management involves finding the most pertinent facets of that environment and growing supply chains around them.
This article by Morai Logistics highlights several more prominent factors that are influencing supply chain management today.
Not as Competitive as Before?
Typically in the area of supply chain, competition is continually escalating. As technologies supporting supply chains get more powerful and ubiquitous, the stiffer competition gets. When applications exist that help supply chains become more efficient and productive, costs go down and profits up. Yet, despite this being the case, it’s not quite as simple as that.
There’s another consideration that greatly changes the competitive landscape, that being trade barriers. Given the state of trade disputes (particularly between a certain two giants on the global stage), competition is actually being driven down for many companies. Especially companies operating in nations with lower wages. As such, supply chain managers have to worry a little less about competition but a great deal more about the downsides of trade conflict.
Mass Movement to Urban Areas
Urbanization is hardly anything new. It’s a trend that has been taking place gradually over decades. Nonetheless, it is more relevant now than ever. Perhaps that’s because it’s reached something of a critical mass in order to drive monumental changes in supply chains. For example, the greater number of warehouses in cities that exist to accommodate the need for timely deliveries. Even if the pandemic has somewhat slowed this trend due to the rise in remote work, it remains a massive consideration for the way supply chains continue to be managed.
Greater Presence of Automation
In regards to automation and the supply chain, the question is: how much? Automation—and corresponding to it, the increase in the usage of robotics—is already a large part of supply chains. So, now what supply chain managers are going to have to consider is just how much larger that part is going to get. The balance between human and automated workforces seems to have reached some sort of equilibrium for now, despite previous concerns. However, if vehicles become fully autonomous, can that continue? It is this expanding role of automation that leadership will have to grapple with going forward.
The Need for Big Data
Finally, there’s the ongoing need for big data for quality supply chain management. Central to this necessity is artificial intelligence (AI), particularly machine learning. Machine learning grows more precise with more quality data. Machine learning has a number of functions, but perhaps its most critical is in its bolstering of supply and demand planning.
An article by Forbes further explains,
Over time, many more data inputs have been introduced into the demand planning process, and many companies are doing far more forecasts across different time horizons, products, and ship to locations. Supply chain planning has always been a Big Data solution. But machine learning works better the more data there is. SCP is becoming a Giant Data solution.