Every year, Supply Chains and Procurement face new challenges that require fast adaptation to benefit from and stay ahead of trends. Ongoing challenges to overcome include volatile markets, tough competitors, and increased production costs. Trends indicate that 2020 will be a year of accepting technological advancements and improving the environmental impact of the supply chain.
The goal for any supply chain is to reduce costs where possible, be the best provider of choice, and keep your customers happy. Everything about modern society is leading towards increased demand for services, the need for instant communication, and individualised processes. Attempting to juggle these demands can cause added complexities to the supply chain of many businesses. Keeping up with these complexities is crucial to ensure that your product or service is delivered on time and to a high standard.
Below are five of the key 2020 trends we can see emerging for supply chains and procurement in Australia.
1. Green is going greener
The ever-growing problems that surround climate change have led advocacy groups and consumers to call for businesses to be more sustainably-minded about supply chains. As of September 2018, 18% of all greenhouse gas pollution in Australia is due to transportation, while 33% is due to electricity. Both areas are crucial components to a supply chain network across the globe, and therefore a natural place to start thinking green.
Studies have shown that consumers are willing to spend up to 25% more on a product that is sustainably produced and manufactured. Moving into 2020, progressive companies will be looking at adopting systems and processes that reduce their carbon footprint. Having a climate-focused orientation when planning your supply chain will help you to identify where sustainable resources can be substituted for existing. The bigger picture here is making the world healthier and your consumers happier.
2. Circular supply chain changes thinking
A newly designed circular supply chain model is replacing the traditional linear supply chain. A traditional supply chain moves in three steps from manufacturing to distribution, to the final destination.
In 2020, you will see another step that closes the supply chain network with companies adding a fourth “recycling/reusing” dimension to their supply chain. In the fourth step, products that are not sold, or would have once been thrown away, will be put back into circulation wherever possible. Any elements or parts that can be saved and reused will be identified and systems created to support this new way of thinking.
The benefits of the circular supply chain are immense and include large cost savings on raw materials, reducing waste and overall impact on the environment. With governments cracking down on the waste disposal methods of companies with new laws and standards, adding this fourth layer to the supply chain means that businesses can save costs and stay compliant.
3. Globalisation continues to drive outsourcing
Trends suggest that in 2020, 80% of manufacturers will have multi-country operations. A need for skilled and competent workers is driving this demand in all aspects of supply chains, whether it is analytics, provision of services, or procurement.
As a solution to skill gaps in the emerging workforce, more companies are now taking on the idea of outsourcing these processes to overseas countries. The immediate skill gaps are eased by the employment of overseas workers who are ready and willing to take on these positions.
Areas with the highest outsourcing include:
- Distribution and logistics: 42%
- Manufacturing: 37%
- Finishing: 29%
- Packaging: 23%
The continued globalisation of the workforce creates opportunities for supply chain professionals willing to become experts in implementing and managing a successful outsourcing strategy for their company.
4. The consumer is king – the call for transparency
Consumer concerns are constantly driving the behaviour and impact that a business has in the community. In particular, consumers are more vocal about environmental impact, treatment of workers, and the overall ethical nature of the product they are purchasing. Throughout 2020 we will see more companies join the trends to be transparent about all aspects of their supply chain, from product conception, right through to delivery.
Looking beyond 2020, it is likely that consumers will expect companies to provide detailed reports about their processes and the ethical nature of their products to appease buying choices. By being willing to disclose this information, businesses are seen as more trustworthy in the eyes of their customers, which could, in turn, see an increase in sales.
5. The growing acceptance of Artificial Intelligence
Artificial Intelligence is slowly embedding into all areas of company processes from Project Management and Human Resources, to Sales and Marketing. Supply chain processes are also embracing this technology and creating improvements in production, management, and customer experiences.
In 2020, the specific integration of AI technology will be used to predict shifts in demand, and anticipate events that could be disruptive to the supply chain and procurement processes. The obvious impact of AI will be large-scale automation, which in turn will increase efficiency and productivity.
Successful companies will embrace change
When faced with changes and challenges, the best way to prepare yourself is to remain knowledgeable. If you are aware that your company will be introducing new technology or processes to your supply chain, then act now to do your research, or undertake further study. Staying skilled and up to date with the latest trends in your industry will help your career by demonstrating how dedicated you are to the business.
Although it seems likes 2020 will be full of changes for supply chain management, ultimately, these trends and breakthroughs are what drives the workforce forwards. By keeping up with the latest technologies, companies are guaranteeing themselves longevity in the current market climate. Many new processes and technologies will help to increase productivity, ease existing problems and increase standards of product creation and manufacturing.
Career opportunity remains strong
If new supply chain trends can help reduce production and manufacturing costs, assist the environment, create happier employees and attract satisfied consumers, they will undoubtedly result in positive changes for the long-term. Supply chain management remains an exciting sector for career potential 2020, with many layers of opportunity for the aspiring procurement or logistics professional.