A few years ago, who would have anticipated that the words \u201csupply chain\u201d would become a regular feature in news headlines, and a talking-point outside of specialist circles?\u00a0 Yet in 2022 here we are \u2013 consumers are now far more aware of their dependence on complex global supply chains.\u00a0 At the same time, businesses know that supply chain management needs to keep improving in order to mitigate disruptions and potentially erratic fluctuations in demand, without compromising flexibility or efficiency. So, what trends do we see?<\/p>\n\n\n\n
PREDICTIVE ANALYTICS FOR DEMAND<\/strong><\/p>\n\n\n\n After the erratic years we\u2019ve experienced, is it any wonder that business managers are finding it hard to anticipate future demand levels?\u00a0 What was previously a challenging task has now become even more so. Demand could be simultaneously strong in Korea and weak in Japan, for instance \u2013 or even vary between cities in China if local lockdowns continue!\u00a0 It\u2019s fair to say that simply extrapolating from past data is not going to be sufficient.\u00a0 Drawing on responses from more than 1000 supply chain and manufacturing leaders, MHI\u2019s Innovation Driven Resilience (2021) reported that 44% of those companies would use predictive analytics within the following couple of years.\u00a0 With the use of such tools, demand scenarios can be modelled for different locales, taking into account seasonality, end-of-lifecycle issues, and possible new trends.\u00a0<\/p>\n\n\n\n DIVERSIFICATION OF SUPPLY <\/strong><\/p>\n\n\n\n Dependence on a single company or region for supply can be a dangerous strategy, as some businesses have found to their cost. Having two suppliers from Shanghai for the same component, for instance, offers little protection when the container port there is jammed.\u00a0 Diversifying supply chains is a crucial way to ensure ongoing supply of critical components; smart managers will regularly re-asses the risks related to their suppliers, seeking out alternatives and nurturing supply chains that are sufficiently independent to not be adversely affected by a single event, whether political, natural, legal or otherwise.<\/p>\n\n\n\n SUSTAINABILITY AND GOVERNANCE<\/strong><\/p>\n\n\n\n At the same time as reducing supply-chain risk, manufactures and brands are increasingly being driven by sustainability goals \u2013 reductions in the carbon-footprint of their products, and improvements in welfare and governance throughout their supply chain. For some this has resulted in a process of \u201conshoring\u201d \u2013 for others it means ceasing to source from certain countries, because of human rights concerns, for instance.\u00a0 The trend towards total supply-chain responsibility is one which we see continuing for certain, and even gaining pace.<\/p>\n\n\n\n