The Next Chapter for the Supply Chain: The 3 most important topics shaping the future

No-one could have predicted over a year ago that a global pandemic would shut down economies all over the world; throw supply chains into chaos due to panic buying and shipping delays and make the supply chain of personal protective equipment (PPE) one of the most important (and interesting) supply chains in the world.

It may only be September, but I think we can all agree that 2020 has been a strange stage in our lives both personally and professionally. While there are probably many more twists and turns that this pandemic will throw our way, we are starting to see supply chains get back on track. However, we can’t go back to our pre-pandemic “normal” as this system is flawed. While we not wiping the slate clean, we need to move forward and make change thus marking a new chapter for supply chains.

The next chapter is going to mark significant change for supply chains. While my crystal ball can’t exactly predict what the next chapter has in store, after a year of reading, researching, and writing for the blog, here are some of the things, which I believe will be prominent as supply chains enter the next chapter.

Sustainability

Alongside technology and supply chain management outsourcing , sustainability was one of the key supply chain trends coming into 2020. For many companies, sustainability has been part of mission statements for some time as the world makes a global effort to reduce the rate of climate change and limit temperature increase to below 1.5 degrees centigrade as set by the Paris Agreement.  The agreement means that over the next 10 years emissions need to be reduced by 45%.

While there are concerns that sustainability may be put on the backburner due to the pandemic, climate change is happening now and there seems to be an appetite from consumers for sustainable supply chains. For example, in the ecommerce sector, recommerce or second-hand commerce is expected to see a revival in the next few years.

Recent research suggests that the market for second-hand goods is set to double by 2025 as customers become motivated by sustainability rather than price. It is expected that the industry will see a growth in sales of second-hand luxury items rather than the typical finds on eBay or Gumtree. This presents an interesting opportunity for brands to open their recommerce marketplace and turn second-hand shopping into an exciting experience.

Transparency

Transparency is nothing new for supply chains. Firms have been working on end-to-end visibility for some time now. Especially with many firms introducing blockchain into their supply chains it has become easier for firms to provide this visibility.

For example, “Thank My Farmer”, an app created by Farmers Connect and the IBM Food Trust, was unveiled at the Consumer Electronics Show 2020 in Las Vegas back in January. The app uses blockchain technology to allow the consumer to track their coffee from bean to cup. By using blockchain technology to simplify the exchange and tracking of information and payments, the technology creates a permanent digitized chain of transactions, which cannot be altered. This information is then used to create an interactive map on the app for the consumer, which will allow them to track their coffee’s supply chain.

However, while blockchain has allowed many firms to become more transparent, there are still issues with transparency especially within the fashion industry. Despite the fashion transparency index, the fashion industry has claims that there is forced labour in their supply chains with notable examples including the Boohoo scandal in Leicester, UK,  and the links of many major supply chains to the Xinjiang region of China, where forced Uighur labour is said to be being used. With price not being the major deciding factor as to if a consumer buys a good or not, the need for transparency to prove that supply chains are ethical will become increasingly important as supply chains move forward.

Ecommerce

Ecommerce is here to stay. It’s as simple as that and as we move forward, firms need to get with the ecommerce programme or get left behind.

While ecommerce sales were growing before the pandemic, Covid-19 has accelerated society’s move towards this. It’s not just that people are buying more online, who and what people are buying is changing. The pandemic has seen a significant increase in older people (60+) shopping online and a broader range of products available such as sporting goods as home office items. To some, this may seem like a fad, which will change as things start to get back to normal. However, when looking at different patterns of recovery from Covid-19, in every scenario, there is an expected year on year increase in ecommerce to be between 25-32%.

As ecommerce grows, it is also ever-changing with common supply chain trends such as sustainability and technology also impacting ecommerce. New technology will particularly play a role in the future of ecommerce logistics. Customers want their order as soon as possible. Amazon’s hopes of delivering goods within two hours of offering is setting the standard, which other companies will have to try and match.

As a result, logistics technologies must be capable of handling reordering or rerouting of goods automatically to ensure that the delivery can be made in line with customer expectations. The future of ecommerce will see increased use of many different technologies including autonomous deliveries, smart sensors, blockchain tracking to increase delivery speeds, efficiencies, and cost saving. However, it is the use of digital twinning which could be most interesting.  The use of digital twinning in ecommerce to replicate products, buildings or processes to manage or manipulate circumstances can help firms understand, predict and optimise performance without disrupting currents operations and as a result help speed up delivery times.

The Next Chapter

Just like a book, as one chapter ends, the next one begins. While we can predict what the next chapter has in store for supply chain as it moves into the next chapter, no-one knows exactly what to expect and that makes it exciting. What many supply chain professionals do hope though is that the next chapter will build on the success of the past and rectify any mistakes made.

My next chapter 

Just like the supply chain, I am moving onto a new chapter in my life. Today marks my last official day writing for All Things Supply Chain as I head back to University at the end of the month.  I have had a great time learning about the amazing supply chain industry and I would like to thank Kai Keppner for this opportunity.

Thank you to everyone that has accompanied me on my supply chain journey throughout the year. I hope you enjoyed reading my articles as much as I enjoyed writing them!

Header image: CharlieAJA – Getty Images