Eight Supply Chain Trends to Watch in 2021

Supply chains are an essential part of most businesses. The ability to get products from point A to point B without delay is pivotal to creating a successful business with a healthy bottom line and happy customers. In 2020, the success of the supply chain was threatened by changing consumer habits and increased restrictions brought on by the pandemic. Supply chain management teams had to work quickly and seamlessly to re-work supply chains, increase resilience, and re-consider current strategies. As a result, supply chains will go through major upgrades in 2021. To help your business prepare for the new year, we’ve put together a list of top trends expected to lead the industry. 

1: Agility

If we have learned anything from 2020, it is the importance of adaptability. At the start of the pandemic, the supply chain was immediately impacted, and the effects were felt at every level— from manufacturer to customer. Supply chain managers had to quickly adapt to manage the shift in demand and the various delays. The development of agility throughout the supply chain made the transition easier.  

Historically, supply chains focused on familiarity and were not built to quickly adapt to new circumstances. Over the last few years, managers worked to update supply chains by adding new technologies to increase agility. As we go into the new year, still facing a pandemic, agility is expected to play an important role in supply chain management.   

2: Green logistics

Another trend taking over the supply chain is sustainability or green logistics. Managers are realizing the importance of sustainability in the supply chain process and have made huge steps in lowering carbon emissions and cutting excess waste. Green logistics do not only benefit the environment. A recent study found 66 percent of millennial’s are more likely to be repeat customers if the company values sustainability. A green supply chain can also benefit a company’s bottom line by being more cost-effective.  

In 2020, we saw this shift take hold of the eCommerce industry as more businesses opted to use less packaging and cut down on unnecessary waste. In 2021, we can expect to see more businesses adopting green logistical practices by creating Eco-friendly warehouses with energy management systems that have timers and gauges to monitor utilities. 

3: IoT and Big Data

The Internet of Things (IoT) is the connection of powered devices to the internet. IoT technologies aid supply chains by improving transparency. Managers will be able to track a product from when the order is placed to when it reaches the customer and handle any problems along the way with ease. For example, transport vehicles can be equipped with sensors to provide live-updates, and IoT can be implemented in warehouses to track inventory and maintenance. Overall, IoT increases efficiency across the entire chain. 

4: Artificial Intelligence

Artificial Intelligence (AI) has been growing in popularity among supply chain managers in the last few years because it increases efficiency and eliminates human error. The popularity of AI is predicted to increase in 2021 as companies try to regain control over their supply chain post-pandemic. 

AI is currently being used to automate the supply chain and replicate complex content and procedures. Using AI to complete these tasks has improved inventory management, productivity, supplier selection, and customer experience. 

Most importantly, AI has a skill known as “anticipated sense, and response capabilities,” meaning the tech can predict future problems and prescribe a solution ahead of time.

5: Supply Chain as a Service

Supply chain management teams are expected to get smaller as more companies start to outsource supply chain roles to external companies. Many companies have already started to outsource various roles including inventory management, logistics, and packaging. Before the advent of these new technologies, it would have been difficult to manage a decentralized supply chain, but now with the use of AI, IoT, and Big data, it is easier to track and manage multiple branches.  

6: Circular Supply Chains

Currently, supply chains are linear, but they will soon be replaced by circular supply chains. In a circular supply chain, manufacturers break down returned or discarded products and turn them back into raw material instead of sourcing new raw materials. This trend is influenced by the sustainability trend and pushed along by stricter government regulations on recycling and waste.  

7: Cold Chain

In the new year, temperature-controlled vehicles and facilities will be more prominent as the demand to ship more temperature-sensitive materials is needed. The impending COVID-19 vaccine is a driving force behind this trend. Once the vaccine is complete, it will need temperature-controlled transportation. Other medicines and the increased use of home delivery for groceries are also drivers of this trend. When working with temperature-controlled facilities and vehicles, companies need to work closely with various parties to maintain chain-of-custody and monitor the product.

8: Shorter Product Life Cycle

Despite sustainability being a leading trend across every industry, fast-fashion and planned obsolescence still dominate and the life cycle of products continues to get shorter. As the lifespan of products decreases, the number of products purchased increases since consumers buy new to replace the old. Supply chains need to be able to adapt to keep up with new demand while limiting any delays. To keep up, more businesses will increase the use of AI, IoT, Big Data, and other technologies to speed up the supply chain and limit the possibility of error.