What Research Tells Us is Next for The Supply Chain Sector

As we take a minute to review the hectic start to another year and begin planning for the latter half of the year, it’s crucial to stay abreast of disruptive trends that will shape the supply chain in the coming months.  

We have assembled some invaluable insights into these cutting-edge trends that will define the profession through the remainder of 2024 and beyond. From leveraging big data and AI to drive decision-making to embracing digital transformation for enhanced agility, the insights gathered here will help you remain a forward-looking supply chain leader, and ensure you have the knowledge you need to make strategic, data-driven decisions that not only fuel the growth of your organisation, but also ensure sustainable and resilient operations in an increasingly volatile global market. 

Integrated Supply Chains  

Collaboration and efficiency go hand in hand with modern supply chain practices, as evidenced by the strategic merging of various supply chain components – such as transportation, warehousing, and order fulfilment. More companies are already creating alliances and leveraging integrations with third-party third-party logistics providers (3PLs) and their technologies via APIs and cloud systems.  

Streamlined supply chain operations, operational efficiency and visibility are the obvious benefits, but there is much to gain from a 3PL provider’s economies of scale, specialised expertise, and their expanded access to a wide network of carriers and warehousing facilities. Right now, supply chain areas with highest outsourcing include distribution and logistics, manufacturing, finishing and packaging – in that order. 

Big Data and Analytics 

With volumes of supply chain data doubling every two years thanks to autonomous systems and connected devices, analytics has naturally emerged as key tool for decision-making. This incredible surge in data – when correctly harnessed – can be used to identify inefficiencies, reduce costs, support precise forecasting and, more generally, enhance the accuracy and efficiency of logistics and operations.  

Big data also opens the way for new, innovative practices, for example, IBM’s use of big data to create a connection between weather predictions and bakery production planning. They integrated data on temperature and sunlight to assist bakeries in forecasting the demand for different types of baked goods.  

Likewise, Amazon has patented a data-first shipping method where products are pre-emptively moved into delivery networks prior to being ordered by customers. As these developments continue, expect to hear of novel ways data is being used in supply chain processes. 

Artificial Intelligence  

There’s no stopping AI’s forward march in business, and the supply chain is not being left out. Research states that 37% of supply chain executives reported that their companies have already integrated automation, AI, and machine learning into their supply chain operations, while another 36% are in the process of adopting these technologies.  

For logistics and route planning, AI algorithms are being used to optimise shipping routes and schedules, considering factors like traffic patterns, weather conditions, and vehicle capacity.  

Over in the warehouse, it’s anticipated that by 2035, nearly 45% of supply chains will operate with a high degree of autonomy. This includes the widespread use of robots, autonomous forklifts and trucks, delivery drones, and fully automated planning systems to support tasks like picking and packing, inventory management, and quality control. Latest estimations suggest the total value of the warehouse automation market to reach $30 billion by 2026. 

When it comes to intelligent sourcing, AI algorithms can analyse vast amounts of data on supplier performance, compliance, and risk factors, pinpointing the most reliable and cost-effective suppliers. 

More advanced forms of AI are also making waves, such as generative AI and AI simulations. Generative AI can analyse unstructured supply chain data to speed up tasks and improve overall performance. AI simulations can run thousands of scenarios automatically to help managers identify vulnerabilities and weak spots, offering insights into potential future disruptions. 

Green Logistics and Last Mile Logistics 

Green logistics will continue to gain traction, driven largely driven by an increasing focus on sustainability – a 2023 industry survey from MHI found that 48% of companies are facing pressure to adopt eco-conscious practices – but also fuelled by rising carbon taxes and environmental regulations. 

Supply chains are aware of the need to adapt to evolving environmental challenges that pose potential disruptions, from conserving biodiversity and managing water scarcity to reducing greenhouse gas emissions. The surge of eCommerce growth and its environmental repercussions has cast an equally large spotlight on these issues, particularly when it comes to the environmental impact of last mile logistics.  

Expect to see more companies seek out technology-powered and environmentally responsible solutions that perfect their low-carbon delivery strategies without compromising profitability. For example, electric or solar-powered delivery vehicles, AI-enhanced route planning and smart delivery consolidation are all being used to adopt cleaner transportation methods while increasing profitability through reduced fuel costs and increased delivery efficiency.  

There’s another advantage to pursuing eco-friendly supply chain practices too – consumer loyalty. Customers are increasingly aligning purchases with their own values, often showing loyalty to brands that demonstrate strong commitments to sustainability- an Accenture survey found that 66% of consumers would pay more for sustainable brands. This alignment of environmental and economic goals makes last mile logistics a key focus area for 2024 green logistics strategies. 

Circular Supply Chains 

Linear is out and circularity is in when it comes to modern supply chains. Linear supply chains operate on a make-use-dispose model while circular supply chains take a regenerative approach, recycling materials to reduce reliance on more costly and unpredictable raw material sourcing.  

Much like last mile logistics, implementing such systems is leading to reduced environmental impact and significant cost savings.  
According to a study by Gartner, 74% of supply chain leaders anticipate an increase in profits by 2025, attributing this growth to the implementation of circular economy principles in their operations. And again, existing and emerging technology is circularity’s application. Advanced software and data analytics allow resources to be tracked and managed throughout their lifecycle.  

For example, supporting the identification of recyclable materials, optimising refurbishing processes, and integrating them back into the production cycle. Artificial Intelligence too, can help forecast demand to reduce overproduction, while blockchain provides the ability to trace a commodity as it moves through the supply chain, enhancing transparency and compliance with recycling regulations. 

It’s clear the supply chain industry still in a state of evolution, and strategic and innovative approaches are needed to keep pace. As a procurement professional, staying informed and adaptable to these changes will ready you and your team to embrace new technologies, sustainable practices, and integrated supply chain strategies to drive success in your role and across your organisation.