4 trends for an effective supply chain strategy

1. Circular

Linear supply chains will increasingly be replaced by circular chains. Manufacturers are investigating how to give new value to discarded products. For many companies, that means breaking products down to their raw material form or reusing parts from older systems. Making the chain circular, after initial costs to set up new processes, can ultimately save costs. In addition, to lower the costs for raw materials, a circular chain reduces waste. Key drivers of this trend are the stricter government regulations for recycling and waste disposal. Plus, the majority of consumers prefer environmentally friendly products too.

2. Digital

Incorporating digital solutions can provide more accurate estimates of delivery times and save administrative work. In addition, companies will increasingly work with digital twins. This digital copy of the supply chain can provide insight into how events within the chain affect the ability to deliver orders to the customer. The digital twin models constraints in transportation, storage and production in order to optimize processes even before they are executed.

3. Warehouse automation

In a large warehouse, it is important to know exactly where products are. That saves time. Ideally, you immediately want to know what is left of your inventory. Warehouse automation provides those insights. It starts with the chipping of pallets. Each chip stores information, such as the location and number of an object. In this way you keep the data on products and orders organized. The next step may be to replace forklifts with robots and thus work safer and faster.

In recent years, large-scale investments have been made in robot automation. Within warehouses, autonomous mobile robots (AMRs) are being used increasingly to perform labor-intensive tasks. The employees are relieved and can focus more on optimizing processes. Automation requires standardization, which ensures faster turnaround times and flow in processes.

4. Re-shoring

Due to globalization, manufacturing was initially moved to low-wage countries. Recently, we have seen more re-shoring with overseas business activities moving to their original locations. Important customer requirements - such as delivery reliability, product quality and the flexibility to respond to customer changes - outweigh the advantage of low wages.

In addition, the pandemic revealed a major drawback of globalization. When borders were closed, entire industries were shut down due to a lack of raw materials. Companies will reconsider which parts of their production will be done remotely, and which parts will be done locally.

All in all, supply chains are changing, and its management is more complicated than ever. Fortunately, advances in technology are giving entrepreneurs all kinds of opportunities to optimize their supply chains. All these technologies should ultimately create more efficient supply chains that are less vulnerable to disruptions and other unexpected events, with attention to people and the environment.