A survey of supply chain professionals reveals that among the 10 biggest anticipated trends in 2021, investing in supply chain risk and resilience will be a top company priority.
Adding resilience and flexibility to supply chains is already an upward trending investment priority in 2020 for many companies in the wake of demand and supply shocks caused by the coronavirus pandemic, according to Peter Bolstorff, executive vice president of corporate development for Association for Supply Chain Management (ASCM).
“And right now what we see, and the buzz we’re hearing, is really focusing in on how to connect customers effectively, how to rapidly demand- and supply-match, and how to optimize product portfolios to support that,” Bolstorff told FreightWaves President George Abernathy during FreightWaves’ North American Supply Chain Summit on Tuesday. “Companies next year are going to be doubling down on what worked for them this year.”
“Rising and falling” trends included this year
ASCM, which has roughly 300 corporate and 45,000 individual members around the world, conducts an annual poll of top 10 trends in supply chain management. This year the association drilled down a bit further into those trends by introducing a concept called “rising and falling”: ASCM wanted to find out which trends companies are shifting away from and which ones they are shifting toward.
Supply chain resiliency is one of the latter.
“When we looked at resiliency with our risk committee, we looked at leaders and laggers,” Bolstorff explained. “Leaders had invested in digital supply chains 24 months ago. They actually sensed changes in demand patterns in November 2019” before the onset of the pandemic. “As opposed to laggards, who didn’t wake up and smell the pandemic until February-March.”
Resilient supply chains were also better able to balance their supply and demand needs, he said. “They had higher average factory utilization from November to March than did laggards, because they were able to understand the impact of the demand and supply shocks. Leaders were also able to minimize their service [disruption] and cost impacts to their customers and shareholders.”
In addition to supply chain resilience, this year’s survey found that among investments companies were shifting toward are talent development, digitization, and advanced analytics and automation.
“What we see people emphasizing now is synchronized planning,” Bolstorff said. “How do you dynamically synchronize demand and supply using AI, machine learning and advanced analytics?” Companies that ASCM considers to be on the leading edge of supply chain resiliency were involved in synchronized planning 18-24 months ago, he said. “They thought big, they acted small, and they’ve been able to scale those improvements.”
However, those companies that ASCM sees as lagging “are going to have to worry about survival — they’re going to have to start thinking about supply chain as a strategic investment, and how to play catch-up by investing in a digital technology platform. Doing nothing is the highest risk right now.”
Less priority for IoT, 3-D printing
ASCM’s latest survey also revealed that supply chain trends such as Internet of Things (IoT), corporate sustainability and 3D printing — while all still among the top 10 — are investments to which companies are giving less priority. “Companies are saying, ‘I’ve got just so many resources and I have to double down on a few things,’” Bolstorff noted.
He also explained why cybersecurity moved down ASCM’s supply chain trend list to No. 5 from consistently being ranked No. 1 or 2. “Cybersecurity is now considered something companies already have to have in place, or the whole company is at risk. It becomes a subset” of other trends, he said.