The top 5 supply chain and logistics trends for 2022
By: Satish Natajaran, The Manufacturer
The challenges of the pandemic have brought the concept of digital transformation to the fore in the past 2 years.
Manufacturers have been keeping tabs on the Industry 4.0 revolution for many years now, but today the concept has broad traction, with one study showing that nearly half of all retailers are aiming for a digital transformation post-pandemic. It’s easy to see why that’s a top priority. The past two years have shown that demand is volatile in ways we’ve never had to grapple with before, and labour shortages have made it a Herculean effort to simply get goods to their final destination. More than ever, supply chain players feel like they have to adapt – and adapt quickly. That desire for rapid evolution is going to drive big changes in logistics in 2022.
Renewed Focus on Sustainability
Of course, COVID-19 isn’t the only crisis that’s changing the way we think of the supply chain. Climate change has been top of mind for years now, and those concerns haven’t gone anywhere. To address the challenges we’re facing now, sustainability in the supply chain needs to become a matter of efficiency and optimisation.
That can start with something as simple as route optimisation for last mile logistics – a process that can reduce fuel consumption significantly – but it also needs to include a more holistic approach to finding and rooting out inefficiencies across the supply chain in 2022.
More Connected Transportation Networks
From a consumer perspective, all e-commerce is national – or even international – by default. No one wants to find out that they’re not in the shipping area for a sofa or a dining set that they had their heart set on. Luckily, one of the most powerful trends in logistics for 2022 will be the creation of wider, more connected transportation networks.
In the US, there’s been significant recent consolidation among 3PLs and 4PLs aiming to make nationwide transportation networks possible, and we expect this trend to go international in the coming year.
Middle Mile Optimisation
Recent data shows that LTL is outpacing long-haul trucking in both demand and cost—and it’s putting pressure on businesses to focus on the middle mile much more than they have in recent years. Given the capacity crunches and driver shortages plaguing the world of logistics, it makes sense that supply chain players would look for new efficiencies – and the middle mile is a natural choice.
Why? Because the technologies that we use to optimise the last mile can be applied here as well. In the coming year, expect supply chain visibility, route optimisation, and smart, connected driver management to become more and more common across the middle mile.
The Need for Speed
Again, we’re amid a unique moment of demand volatility and skyrocketing customer expectations. To meet changing customer needs, supply chains simply need to move faster than they used to. There are any number of obstacles to this actually happening, but that doesn’t change the fact that speed is going to be one of the biggest areas of supply chain investment going forward.
What will that look like in practice? For starters, it will mean increasing visibility and connectivity across the supply chain. It will also mean leveraging Artificial Intelligence (AI) in new and interesting ways…
New Applications for AI
Studies have consistently shown that AI has the potential to decrease costs and improve service levels across logistics processes. With increased emphasis on getting large volumes of goods to traverse national and international networks as quickly as possible, we’re going to see a lot more businesses leverage AI specifically for the purpose of speeding up delivery turnarounds.
How does this work in practice? For starters, businesses are using AI-powered route optimisation to get more out of their existing capacity, thereby potentially reducing cycle time. AI can also be leveraged to improve ETAs, which has the impact of decreasing delays throughout the supply chain.
2021 presented a lot of challenges across the supply chain – and we expect 2022 to do the same. At the same time, logistics technology is evolving quickly. For businesses that are able to stay ahead of these emerging trends, there will be real opportunities in the coming year.