Three trends in supply chain management
The year 2020 was one that brought troubles to the vast majority of different industries. While it exposed many weaknesses in our business models, it has also generated new trends and transformed manufacturing processes. This article looks at three trends for supply chain management. These trends will help manufacturers and suppliers stay competitive and face the unpredictable in the post-pandemic scene.
Uncertainty and major disruptions are pushing companies to rethink their supply chain strategies. There are a few trends that the manufacturing business needs to keep an eye on. These trends can increase their chances of success as they strive to recover from the effects of the pandemic. A few examples of these are the benefits of reshoring, a greater focus on sustainability, and flexible supply chains.
1) Going greener with green logistics
A significant portion of the world's greenhouse gas emissions come from electricity and transportation. Therefore, green logistics is becoming one of the main emerging trends in supply chain management (SCM).
What are green logistics?
Green logistics, also known as sustainable logistics or eco-friendly logistics, refers to a set of practises and strategies. These practises and strategies are aimed at minimising the environmental impact of logistics activities. It encompasses all aspects of the supply chain, from procurement and production to transportation and delivery.
Eco-friendly warehouses with clean energy management systems are quickly gaining traction among plant owners and manufacturers.
In addition to being good for the environment, green incentives can increase profits and gain customer loyalty. More than 60% of consumers were willing to pay a premium for environmentally friendly goods. This is according to a 2018 Nielsen study titled Sustainability Sells.
For this reason, energy management systems are the best way to monitor and reduce consumption. Implementing energy-saving measures such as thermostats, timers, and gauges can help businesses reduce their energy waste. This applies to all forms of energy resources, including water, gas, and heat. This method is easy and autonomous, requiring little human intervention, and is a great way to cut down costs.
2) Reshoring as a crucial supply chain strategy
Reshoring is the practice of bringing manufacturing back to the home country or nearby regions from overseas locations. It is a strategic approach to the management of supply chains. It aims to reduce reliance on distant suppliers, shorten supply chains, and improve supply chain resilience.
The COVID-19 pandemic has had a profound impact on global supply chains, leading to a resurgence of reshoring initiatives. During the 1980s, the primary focus in supply chain management was cost optimization. Thus, driving businesses to seek out low-labor-cost regions for production.
This trend led to the widespread outsourcing of manufacturing. As a result, businesses began looking for low-cost labour in various regions of the world.
The pandemic has highlighted the fragility of global supply chains and the reliability of human factors. Anxieties over travel, asset shortages, and supplier constraints are making more manufacturers think about moving production back home.
Businesses that decide to migrate their production will need effective supply chain tools. These tools will play a crucial role in increasing the traceability, accuracy, and overall visibility of their operations. Hence, minimizing the risk of mishandling goods and ensuring adherence to quality standards.
According to a Deloitte report, cutting-edge technology must be used in order to predict and respond to future challenges. For instance, artificial intelligence, Internet of Things-connected devices, 5G networks, and digital supply chains.
3) Agility is key
Aside from the current pandemic, unpredicted events like climate disasters, international conflicts, or global trade issues could also occur. To be resilient, supply chains need to remain agile and respond to rapidly changing circumstances.
Supply chain modelling solutions can help predict future scenarios, but companies also need to be flexible and prioritise collaboration. EU Automation has warehouses on three continents and a global network of suppliers. Regardless of the instability the pandemic causes, this reliable strategy aids manufacturers in receiving their automation components on time. These automation parts are delivered in the shortest time possible, helping manufacturers avoid downtime.
The global pandemic undoubtedly changed the face of supply chain management and gave rise to new trends in the field. From becoming green to agility and reshoring, the sector must innovate to stay competitive and gain customer support.
To learn more about EU Automation’s services and suppliers, visit our website at www.euautomation.com
