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4 Supply Chain Trends to Watch in 2020

Michael Wilson | Dec 30, 2019

Which trends are set to change the world of supply chain management? 2020 is going to be an interesting year. Not only is the manufacturing and production industry experiencing ...

Which trends are set to change the world of supply chain management? 2020 is going to be an interesting year. Not only is the manufacturing and production industry experiencing global changes, but the world, is, too — people are moving towards being greener and more sustainable. With a potential global recession looming and many people worried about tariffs, there's going to be a lot to track.

Let's take a look.

1. The World is Getting a Little Greener

Companies are looking to improve sustainability, and measures taken toward this goal will benefit both the company and the environment. In the long run, sustainability tends to be better for a company's bottom line because it reduces costs. There are also more sustainable options within the market today specifically because people are looking for them.

Sustainability can be achieved in many ways. Companies are exploring new packing materials that are degradable instead of filling up landfills and wasting space. Recycled products are also cheaper alternatives that can be used for packaging and shipping, offering the potential to save money in 2020.

Additionally, better logistics systems can reduce the amount of time that products have to spend in shipping. Rather than having to ship a long distance or a more circuitous route, products can be packaged together and delivered together. The less time that each individual package has to spend in shipping, the better.

Even shipping companies are improving. There are new, AI-driven trucks that don't need a driver, which has the potential to save companies a lot of money. Additionally, these trucks are electric, which means they're sustainable and cost-efficient. Again, this can provide a win/win scenario for supply chain managers.

2. Integrated Technology Leads to High-Tech Processes

Newer technologies are emerging that can help organizations manage their supply chain. Artificial intelligence is one of the most useful ones. As AI becomes more "complete" and intelligent, it's able to improve supply chain forecasts and optimize logistics. AI can see patterns and trends more effectively than humans can, and can consequently make systems that are far more effective. 

As mentioned before, technologies such as driverless vehicles are going to provide more reliable shipping. Driverless vehicles can run continually. They don't need to make stops as a driver would and they also don't need to pay drivers. If these vehicles are effective, they will also likely be safer. 

IoT devices are also being used to track items. In warehouses, these devices speed up the handling times and expedite the shipping process. In transit, these IoT devices make it easier to track products, reducing the amount of loss in the supply chain, and increase accuracy in predicting when shipments will arrive. IoT tracking can also be used to fine-tune and optimize the logistics of shipping, identifying bottlenecks so companies can make adjustments to avoid them in the future.

3. Balancing Technical Capital With Human Capital

It's not a secret. Many positions within the supply chain can (and will) be automated. But that doesn't mean that human roles will vanish entirely. In fact, it means that those within the supply chain industry may need to take a look at where humans can be better used. 

Human capital is still important. Now that people aren't going to be needed for simple, routine tasks, their skills can be utilized in roles that require more intricate processing — such as advanced strategy and analysis, customer support, and more.

4. The Impact of Tariffs on Cost and Operations

For many companies, the upcoming year is going to be lean. Tariffs are increasing the cost of operating. For some industries, this is significant: tariffs may have doubled in the past few years. That means companies are going to need to operate leaner. They're going to need better forecasting, better analytics, and fewer potential disruptions. 

Be on the lookout for increased risk management processes and lower risk operations overall. Concerned about over-extension, people may be more likely to purchase less. We could see a significant pullback on commercial lending due to recession concerns. While these factors could lead to a holding pattern when it comes to the industry, there are going to be plenty of opportunities in terms of technology and processes.

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