2022: From supply chain chaos to opportunity?

18/02/2022 — minutes reading time
Autopilot sae tmhms put away

2021 has continued to keep supply chain issues in people’s minds as the world struggled to deal with uncertainty over COVID-19 and the disruptions in the supply chains. In a White Paper, logistics market research company Transport Intelligence analyses some of the major supply chain impacts over the last year and identifies opportunities for development in the future. It predicts an acceleration on the adoption of technology. At the same time, digitization will prove to be critical for the logistics sector.

Since the beginning of the Covid crisis, the production and logistics industries have been disrupted by a variety of factors and new challenges:

  • chaos in the inventory management and capacity planning of shipping lines
  • capacity, prices and inflation issues
  • the spiraling of the driver shortage
  • port congestion
  • the explosion of the e-commerce logistics market
  • the need to tackle urgently the carbon emissions

Acceleration on the adoption of technology

These factors generated an acceleration in the development and adoption of technology to cope with the huge pressures being placed on supply chain partners.

The importance of supply chain and logistics technologies in ensuring the delivery of food and essential goods to retailers and consumers as well as maintaining the supply of life saving drugs cannot be understated. Although the technology-based operating models developed over the past twenty years have been placed under unprecedented stress, they stood up to the challenge remarkably well.

At the same time, the uptake in e-retail expanded rapidly into new sectors such as grocery, often becoming ‘engrained behaviour’ for many new demographics.

What does this mean for the logistics industry? In order to meet the demands of all these new consumers there will need to be much more automation in warehouses. This will mean far more investment not only in robotics but also in the warehouse facilities required to enable automation.

There will also be the issue of big data and how it is dealt with. This will apply at every stage of the supply chain especially given that retailers and manufacturers will be dealing directly with millions of consumers. Things are likely to become much more complex very fast and this will mean that it will not be a question of the generation of data but its analysis, decision-making and then execution. The demand curve has changed and consequently the supply curve will need to shift with it.

Just about every technology will gain momentum. Companies need to be more efficient and have been forced to contemplate a future where their workforce is as much of a risk as it is an asset.

Digitization is critical for the logistics sector

If the industry is to cope with a volatile, uncertain, complex and ambiguous market environment, as demonstrated by the past two years, there will need to be more progress made in the digitization of
data used in all sectors of the industry. To deal with the vast levels of data which are being generated will require artificial intelligence; the data is not the problem necessarily (although the quality of data may be); how you go about analysing of this data will be the critical issue.

More digitization will lead to the increase of digitalization of markets which will be fundamental to
increasing levels of efficiency. This will go hand in glove with the automation of logistics processes – not least those in the warehouse. We will see more use of robots and automated handling equipment by warehouse operators looking to improve efficiencies but also to reduce the risk of having large workforces vulnerable to the outbreak of disease in the future, whether this is Covid-19 or another disease.

Within the supply chain itself high levels of visibility will be required to provide companies with the agility and flexibility to respond to crises. This will involve collaboration between supply chain partners, logistics companies and governments, amongst others. Governments will be particularly important within the process in order to facilitate the movement of cross border goods. In the world of global supply chains and international e-commerce the role which customs organizations play in the facilitation of trade will be ever more important.

Interested in reading the whole White Paper? https://transportintelligence.cmail19.com/t/i-l-cidyhjd-tlllhdhdid-t/

Transport Intelligence