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How 2020 challenges will transform supply chains in 2021

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Supply chain vulnerabilities were exposed in 2020.

Traditionally, supply chains focused on a “lean” approach where the emphasis was to deliver results at the minimum cost. In the pandemic, this approach was shown to be incompatible with the level of trade disruption, as lean logistics lacked flexibility to pivot to the changes required.

Border closures delaying incoming products halted supply chains almost overnight.

Consumers were frustrated; and more time spent on social media intensified an ‘I want it now’ mentality. These frustrations only became worse when promised delivery timeframes shifted.

For supply chains, outside forces are also blocking innovation for supply chains to adapt, with siloed systems and/or processes listed in the top three innovation barriers. Further, existing outdated IT systems and inflexibility in supply chain partners highlight that a major rethink is necessary to survive. 

From these challenges an important question emerges – how might supply chains navigate trade uncertainty in a way that manages consumer expectations?

‘Moderate-to-extreme’ changes needed to improve resiliency

In answering this challenge, considering the top innovations and trends that have emerged from the pandemic, will guide the future of logistics.

Fostering supply chain resilience is a major consideration. In fact, following BluJay’s report on the Top 5 Trends Shaping Survival and Success, 75 per cent of supply chain professionals expect to make moderate-to-extreme changes to improve resiliency in this coming year.

For logistics, this means increased investment into new solutions to improve a supply chain’s ability to handle pressure and unforeseen disruption, with the top three priorities lying in improving IT capabilities (61 per cent), human resource policies (58 per cent) and risk management (58 per cent).

This desire for resilience is a catalyst for innovation, and highlights a growing transition, from prioritising business cost to creating consistent best practice consumer experiences (CX) in delivery. Managing consumer expectations with enhanced CX will be key to maintaining the confidence and trust of the consumer, especially in periods of disruption.

How 2020 challenges will transform supply chains in 2021_KK_BluJay

Amongst supply chain professionals, the highest ranked consideration for CX at 36 per cent, is real-time visibility to orders, shipments and inventory, unchanged in the past year. In practice, this translates to providing consumers with updates that matter, when they matter in an easily read format.

Tools to achieve best practice

Business intelligence and machine learning rose to third place as a consideration for CX, with millennial and generation Z respondents identifying it as a significant factor. Evidently, when it comes to delivering and enhancing CX, analytics, machine learning, and data-driven processes will be the necessary tools to achieve best practice.

Accurate tracking, analysing and understanding data to form actionable insights will be a what sets supply chains apart, in the delivery experience for the consumer and as a business.

It is vital that supply chains take notice of these important trends and evaluate what opportunities are worth the risk.

If disruption was the theme of 2020, resilience will be the theme of 2021.

These challenges stem from a lack of resilience, and the posed trends will be sure ways of mending this vulnerability. Beyond addressing the situation, investing in resilience will prepare supply chains to adapt to the future.

However, the alternative of doing nothing and maintaining the status quo, is a risk in itself to the survival of supply chains.

*Katie Kinraid is General Manager, APAC, at BluJay Solutions

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