Introduction

Supply chains evolve continuously. The priorities and demands that negate these changes also change continuously. So, what are the current trends facing supply chains in 2024? How can organisations develop their supply chains to maintain agility and resilience in the face of this evolving environment?

A current focus on building resilient supply chains means organisations are seeking to lay the foundation for future success and flexibility.

Fundamental challenges including cost pressures, fragile value chains, and climate related matters and regulations, means supply chain leaders are looking to respond to demand to stay competitive. To do this, new strategy and technology can be implemented in line with requirements and demands from regulation, stakeholders, and consumers.

This POV will highlight 4 key trends around supply chains in 2024
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1 – Improving Supply Chain Resilience with Technology

Research finds that less than half of the 200 surveyed retail companies say they are effectively managing supply chain disruptions, and are now looking to improve efficiencies and reduce vulnerabilities.

Utilisation of technologies such as Internet of Things (IoT) devices and digital twins is seen as a way to improve efficiency, transparency, and resilience within supply chains by offering real-time monitoring capabilities. These technologies are helping retailers to navigate the complexities of modern supply chains and efficiently and effectively mitigate disruption.

The real-time data that is collected not only improves general oversight and operations, but also creates a competitive advantage by driving decision making within the supply chain.

Technology can also improve collaboration with suppliers and external partners to ensure that they are getting up to date information around production, manufacturing, logistics, etc. This will increase resilience as retailers will be better prepared if any disruptions occur.

2 – Digitisation of Supply Chains

The digitisation of supply chains has been fuelled by the demand for visibility and resilience. New capabilities in cloud computing, automation, analytics, AI, and machine learning are allowing retailers to take a more proactive approach to their supply chains.

Technologies such as these allow retailers to optimise various supply chain processes and improve decision making capabilities. For example, cloud-based platforms help build seamless collaboration with suppliers to optimise inventory management, enhancing visibility across a full supply chain. Automation can then be utilised to collate this data into reports for regulatory compliance and internal decision making.

Digitisation of supply chains also supports the move to more demand-driven retail. This shift means creating more personalised experiences for customers which significantly increases the need for data-sharing and collaboration to improve forecasting.

Furthermore, consumers are increasingly preferring a quick and efficient buying and delivery experience. Technology is now being used to improve customer experience and respond to new demand through automated inventory management.

3 – ESG and Scope 3 Emissions

22% of retail companies are prioritising becoming more environmentally sustainable in 2024.

Adapting to change and meeting regulatory and customer demand means it is critical for retailers to also adopt ESG practices that deliver traceability and visibility into their supply chains. Many retailers have already started to collect data for Scope 1 (direct emissions) and Scope 2 (electricity) emissions; the focus is now on Scope 3 (emissions from the entire value chain) emissions, which are currently voluntary to report on, but is slowly becoming a requirement.

Collecting up-to-date emission levels is important to being able to measure the effects of any sustainability initiatives. This requires integration with suppliers throughout the chain and the knowledge that the data is reliable to report on.

This is where providing a centralised system for suppliers to input their emissions data and organisations to securely access the data brings value. This value is in the form of traceable, reliable, and transparent insight into emissions and other regulatory documentation and information.

Sustainability isn’t just about environmental impact anymore; it is also about creating social impact. Having this visibility across the value chain helps retailers to both comply with regulation and improve transparency with consumers and stakeholders. Similarly, it helps retailers to avoid greenwashing and improve consumer trust, as retailers are continuously receiving data from suppliers and curating accurate reports to consumers to showcase efforts to improve environmental and social impacts.

4 – Circular Supply Chains

Retailers are transitioning towards circular supply chain models in response to the need for more sustainable practices and regulations such as Extended Producer Responsibility (EPR).

A circular supply chain is described as a value chain that uses the same materials for as long as possible, rather than letting them go to waste. Materials are recycled back into the manufacturing process to reduce the amount of waste that goes to landfill. This includes recycling or repurposing waste products such as textile offcuts.

Creating a circular supply chain is a no easy feat, however, the benefits include environmental preservation, reduced costs due to spending less on new materials, increased resilience with more recycled material, and increasing loyalty with consumers (those who are interested in sustainability).

Conclusion

The supply chain landscape is transforming. Advanced technologies, regulation, and environmental concerns are reshaping the way that retailers must manage their supply chains. Those who start implementing and making changes now will be able to unlock value, improve efficiency, and measure success.

Leveraging the trends mentioned in this POV will require dedicated resources that bring supply chain expertise and technology together so that retailers can respond to demand. Supply chain managers will need to be more flexible to ensure they are able to respond to disruption.

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