Three trends in supply chain management

Last year was a difficult year for industries at large. While it exposed many vulnerabilities in our business models, it has also generated new trends and revolutionised manufacturing processes. In this article, Neil Bellinger, head of EMEA at automation parts supplier EU Automation, discusses three trends for supply chain management that will help manufacturers and suppliers stay competitive and face the unpredictable in the post-pandemic scene.

Uncertainty and major disruptions are pushing companies to rethink their supply chain strategies. From an increased interest in sustainability to the advantages of reshoring and flexible supply chains, there are a few trends manufacturers should be aware of to increase their chances to be successful as they strive to recover from the effects of the pandemic.

Going greener

As electricity and transportation contribute greatly to greenhouse emissions, green logistics is becoming one of the main emerging trend in supply chain management (SCM). Eco-friendly warehouses with clean energy management systems are quickly gaining traction among plant owners and manufacturers.

Green incentives are not only beneficial when it comes to helping the environment, but also for generating more profit and gaining customer loyalty. A 2018 study conducted by Nielsen, suggestively called Sustainability Sells: Linking sustainability claims to sales, found that more than 60 per cent of customers didn’t mind paying more for sustainable products.

For this reason, energy management systems are the best way to monitor and reduce consumption. By simply integrating thermostats, timers and gauges for all forms of electricity, gas, heat, and water, businesses can use only the amount of energy they need, thus cutting waste. This method is easy and autonomous, requiring little human intervention, and is a great way to cut down costs.

Reshoring as a crucial strategy

The COVID-19 pandemic exacerbated the tendency to reshore production. During the 1980s, the main focus in supply chain management was optimisation through cutting costs. This led businesses to seek cheap labour in different parts of the world. The pandemic has highlighted the fragility of global supply chains and the reliability on human factors. Due to anxieties surrounding travel, shortages of assets and restrictions placed on suppliers, more and more manufacturers are considering moving their production back home.

Businesses that decide to migrate their production will need effective supply chain tools to increase the traceability and accuracy of their operations and to prevent the mishandling of goods. According to a Deloitte analysis, advanced technologies like artificial intelligence, IoT-connected devices, 5G networks and digital supply chains are essential to anticipate and meet future challenges.

Agility is key

Aside from the current pandemic, unpredicted events like climate disasters, international conflicts or global trade issues cannot be ruled out. To be resilient, supply chains need to remain agile and respond to rapidly changing circumstances.

Supply chain modelling solutions can help predict future scenarios, but companies also need to be flexible and prioritise collaboration. EU Automation has warehouses on three continents and a global network of suppliers. This reliable strategy helps manufacturers get their automation components on time, regardless of the instability generated by the pandemic. Automation parts are delivered in the shortest time possible, helping manufacturers avoid downtime.

The global pandemic undoubtedly changed the face of supply chain management and gave rise to new trends in the field. From the need to go green to the importance of agility and reshoring, the industry needs to continuously evolve in order to stay competitive and gain customer support.