10 Supply Chain Trends That Will Shape 2022

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This post contains 10 popular supply chain trends that will shape 2022 and beyond.

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Top Supply Chain Trends in 2022

1. Supply Chain Digital Transformation
2. Transparency and Visibility
3. Improved Analytics
4. Upgraded Forecasting
5. Cross-docking
6. Supply Chain Localization
7. Using Crowdsourced Delivery
8. Focusing on Return SCM
9. Investing in Driver Retention
10. Focus on Last-Mile Delivery Solutions

1. Supply Chain Digital Transformation

In 2020, the lockdown highlighted the critical importance of the adoption of technology in supply chain management.

In fact:

Almost half of all businesses (44%) planned to raise tech spending in 2021, according to supply chain statistics.

And they did.

In 2021, 51% of companies invested in automation.

The biggest supply chain investments in technology came from:

• eCommerce: 66%
• Food and beverage: 59%
• Third-party logistics (3PLs): 55%

But what did all these companies invest in?

Digitalization in supply chain management focused on these four areas:

• Process automation: Companies are automating all operations and processes in their supply chains using various digital tools. This includes everything from data analytics to route optimization software.
  
  
• Cloud adoption: Companies have started taking the cloud-first approach to managing logistics. In fact, 46.1% of professionals have already moved their supply chain planning and management to the cloud.
  
  
• Artificial intelligence (AI): 37% of supply chain companies have adopted some form of AI in their day-to-day operations. However, only 12% of supply chains have been able to successfully implement it.
  
  
• Data analysis: For supply chain professionals data analytics and data processing is their top investment priority. In fact, 41% have already implemented some form of automated data analytics in their companies.

But entails more than just removing manual operations.

It also involves:

• Process and payment automation
• Increased resource efficiency
• The delivery of important data

Companies must use supply chain technology directly within their operations to achieve remarkable benefits.

Still, the supply chain digitization process must be accelerated.

Companies will also have to implement new ideas and solutions.

2. Transparency and Visibility

Post COVID-19, the supply chain management industry is growing at a rate of 10.7% per year.

And more business means more concerns.

(Both for supply chain leaders and your customers)

The solution: supply chain visibility and transparency.

And the key to unlocking this top supply chain trend is cloud technology.

Cloud computing is the most important technology for achieving effective supply chain visibility according to 42% of professionals. (Supply Chain Digital)

But cloud software goes beyond allowing supply chain managers to gain a real-time overview of their operations.

The cloud also enables companies to see, anticipate, and adapt to interruptions in their supply chains.

That’s what makes them more efficient in dealing with potential disruptions like COVID-19.

But this spills over to supply chain transparency with customers:

SaaS delivery management software, for example, has a lot of features that benefit consumers.

Besides helping deliveries plan and optimize their operations, it also provides customers:

• More accurate estimated times of arrival (ETAs) that minimize missed or failed drop-offs
• Customer communication automation via automated notifications, alerts, and messages
• Tracking links that help consumers monitor their orders as they move across the last mile

3. Improved Analytics

Staying on top of supply chain trends will include some form of supply chain analytics in 2022.

Supply chain analytics will rely on

Your choice will come down to two options:

• Heuristics analytics
• Exact analytics

Basically:

Heuristics is a type of analytics used to evaluate supply chain processes to solve specific problems and achieve immediate goals.

This analytics model doesn’t necessarily optimize operations.

But it does provide quick data-based problem-solving that lets you dynamically respond to unexpected situations. Which helps you to build an agile supply chain.

On the other hand:

Exact analytics is a model that aims to find optimal solutions to all supply chain problems based on a variety of data including multiple KPIs, variables, and constraints.

This is the foundation of supply chain optimization.

As a result, managers are using it to maximize delivery performance and raise profitability at all four stages of the supply chain: procurement, production, inventory, and distribution.

But supply chain analytics is also helping professionals with predictive analytics.

4. Upgraded Forecasting

Upgrading supply chain forecasting will be essential in 2022.

Forecasting, in general, helps you to:

• Optimize inventory
• Meet seasonal demand
• Uncover operational waste
• Find new revenue opportunities
• Raise average order value
• And more

But the problem is that traditional supply chain forecasting relies on predictions that aren’t based on real-time supply chain data.

So what will supply chain forecasting look like in 2022?

And what’s the best method to use to forecast demand?

There isn’t one method.

The problem with supply forecasting is that it relies on data based on assumptions.

Especially in the case of unforeseen events and major disruptions.

In this case, qualitative supply chain forecasting is the best method to use.

Qualitative forecasting is a powerful method to accurately forecast results using facts and statistical data where resources are unreliable or unavailable.

That’s why 80% of companies use qualitative forecasting for their yearly strategic supply chain planning.

And this will be more relevant in 2022.

Quantitative forecasting is based on historical data, averages, and key metrics in logistics (KPIs).

But this requires vast data collection and analysis.

Delivery management software can help here, as well.

First, it can automate how you plan and collect data from the field.

The software then stores all previous data on the cloud. Which means you have a lot more data to work with.

And then it automatically analyzes the data, which you can track and monitor over time.

This is how quantitative forecasting shows you seasonal supply chain trends and predicts demand beyond your capacity.

5. Cross-docking

Cross-docking is going to be a big trend in supply chain management in 2022.

But what is cross-docking?

Simply put:

Cross-docking is the process of transferring inbound products to an outbound carrier using a cross docking facility (warehouse, transportation hub, depot, or fulfillment center).

The facility is a temporary storage terminal that eliminates or minimizes the requirement for inventory storage.

All goods that arrive are sorted and loaded onto outbound trucks as swiftly as possible.

This speed and efficient merging of inbound and outbound logistics is what’s making cross-docking so popular.

In fact, the market is estimated to grow at a CAGR of 6% and reach $342 billion by 2030.

You can benefit from cross-docking by:

• Reducing costs - costs related to long-term inventory storage, labor, and utilities
• Improving stock turnover - because goods get in and out quickly and smoothly
• Minimizing risk - less goods handling and no long-term storage, and less spoilage

6. Supply Chain Localization

Supply chain localization is the direct result of COVID-19:

When companies couldn’t access the global supply chain due to lockdowns and restrictions, they could only reach consumers closest to their supply chain network: the local market.

This gave rise to local sourcing.

This trend continues into 2022 as it helps you to build a stable supply chain despite ongoing economic turbulence, political conflicts, and increased environmental concerns.

But also because of:

• Growth of on-demand delivery
• Demand for rapid and same-day fulfillment
• Demand for free and affordable delivery
• Increasing competition

It will become more common for businesses to source locally because of the following benefits:

• Less risk: during market turbulence, you don’t have to depend on freight passing through tight or restricted borders

• Improved control of delivery time: more focus on suppliers and customers closer to your supply chain.

• Greater sustainability: local supply chains produce less carbon emissions since they depend less on global transportation networks

7. Using Crowdsourced Delivery

Another problem for the global supply chain is the lack of resources to meet the growing demand for delivery.

In fact, the global supply chain is expected to rise to almost $31 billion in the next four years. (Statista)

To support their supply chains, businesses have started working with multiple fleets in 2021.

These multi-fleet supply chains operate with a mix of in-house drivers and third-party providers, as well as independent contractors.

Crowdsourcing delivery works in this market climate because it allows you to rapidly scale up or down capacity depending on the demand at any moment.

But this is only possible through new technology.

Advanced fleet management solutions and crowdsourcing apps make it possible to quickly hire an additional workforce.

And since it’s typically per contract, it doesn’t require a lot of long-term investment.

In 2022, this supply chain trend will continue for three reasons:

1. Lack of assets: Crowdsourcing can raise fleet capacity to meet consumer demand without the need for capital investment or raising overhead.
2. Fulfillment speed: Crowdsourced fleets can dynamically scale up to fulfill rapid orders (like same-day delivery) even if the in-house fleet has set off on its tasks.
3. Less pressure on in-house fleets: Crowdsourcing reduces the workload of an internal fleet, so the whole fleet maintains top delivery performance across all tasks.

8. Focusing on Return SCM

Returns are another problem caused by e-commerce:

As online order volumes grow, so do the number of returns.

To stay on top of supply chain trends shaping 2022 you should make returns management a priority.

The biggest issues will be:

• Inventory management
• Restocking issues
• Cutting down logistics expenses

Fortunately, supply chain automation simplifies the return process.

Many modern software solutions are equipped to handle e-commerce returns and reverse logistics.

This is in line with the way supply chains view returns in the modern delivery arena:

Companies no longer rely on a linear supply chain (that disposes of products).

Instead, many rely on the circular supply chain (where products are reused and recycled).

Despite higher transportation costs, there is very little waste. So the costs are actually lower.

Recycling also promotes supply chain sustainability and helps you to work towards building green logistics.

9. Investing in Driver Retention

Transportation is a HUGE part of the supply chain.

So much that transportation accounts for 50.3% of all logistics spending for supply chains.

More importantly, it accounts for 10.4% of business revenue. (State of Logistics Report)

That’s why companies are investing a lot to optimize operations and reduce transportation costs.

It’s also why you don’t want to unnecessarily increase those expenses.

One way businesses lose a lot of money in this climate is through driver retention.

That’s because:

If you’re unable to move goods, you can’t deliver them to customers.

And when you can’t deliver orders to customers, sales figures drop.

Another reason you should focus on driver retention is that there are simply NOT ENOUGH drivers available on the job market.

According to Forbes, for every nine driver job openings, there is ONLY one qualified driver.

For those reasons:

You should invest more into your drivers.

But this supply chain trend doesn’t involve making sure your drivers are compensated for their work.

It also means reducing their workload and placing more emphasis on safety on the job.

Automation helps here, as well.

Businesses will adopt driver apps more in 2022.

This can streamline how drivers complete tasks, and reduce a lot of the stress and pressure typically associated with legacy dispatching models.

10. Focus on Last-Mile Delivery Solutions

While global supply chain difficulties are widespread, you need to concentrate on last-mile delivery.

Customers want their orders to be fulfilled quickly and in a transparent manner.

They want to know all details about their order: where is it now, when will it arrive, is it on the way and all in-between.

Today’s technology throughout the final mile allows logistics businesses to make this aspect of the supply chain transparent to all parties involved.

The whole process must be transparent to everyone involved, and all problems must be addressed right away.

Retailers and logistics businesses collaborate as supply chain partners to provide the finest last-mile delivery possible.

The technology they use helps them to adjust to market changes.

That can include issues with traffic and routing, and any other issue that interferes with delivering goods.

Using AI and machine learning is key in this case, and it will determine who will be considered supply chain leaders in 2022.

Conclusion

There you have it:

These are the top supply chain trends you can expect to see in 2022.

Which ones are most interesting to you?

What will your supply chain focus on this year?

Let us know.

And if you want to learn more about how you can improve your supply chain and delivery operations, we can help.