4 Key Priorities for Supply Chain Leaders in 2022
By Dan Weinberger
The global supply chain has changed drastically since the outbreak of the Covid-19 pandemic. 2021 was an extremely busy year for supply chain leaders. Rising inflation, extremely volatile buyer habits, increasing supply-demand gap, and shortage of critical materials have posed significant challenges before supply chain leaders. While the impact of the global supply chain crisis seems to be easing down, significant problems continue to persist. The Achilles Supply Chain Resilience Index reveals that commodity prices have increased 68% since 2021.
As normalcy in global trade returns, demand for physical goods is on the rise. However, manufacturing units globally continue to struggle to fulfill the demand due to several roadblocks. There is still a considerable amount of time before companies narrow down the supply-demand gap. In the meanwhile, the onus is on supply chain leaders to transform operations to ensure efficiency and reduce the financial burden on companies. We are effectively transitioning to Supply Chain 4.0 with the accelerated adoption of advanced technologies like blockchain and the rising demand for digitisation.
Gartner lists 4 areas that supply chain leaders must focus on to successfully lead the transformation and minimise productivity losses. There are:
- Assessing and measuring supply chain performance
- Building stakeholder relationships
- Mitigating supply chain risks
- Devising an action plan
However, the priorities of supply chain leaders have changed significantly since the pandemic. Besides enhancing productivity and overall margin, companies must take care of the impact of their activities on the economy, climate, and society. With customer satisfaction being the primary goal for modern businesses, supply chain leaders ought to divert their efforts toward the newly discovered priorities.
What Are The Major Priorities For Supply Chain Leaders In 2022?
- Digital Transformation: The global digital supply chain will be worth $13.67 billion by 2030. While the majority of supply chains had some digitisation component in the pre-pandemic era, the pandemic-induced disruption has triggered a digital revolution in the field of supply chain management. With traditional supply chain practices becoming obsolete, supply chain leaders are actively integrating tech-enabled solutions into legacy systems for enhanced efficiency. While there are several benefits of supply chain digitisation, companies need to cover several bases, including training the staff to operate new systems, investing in modern solutions, and hiring skilled professionals well-versed in new technologies. Ensuring a smooth transition to digital supply chains is going to be one of the top priorities for supply chain leaders in 2022.
- Net-Zero Supply Chains: Supply chains are one of the biggest contributors to global carbon emissions. However, both businesses and consumers are becoming aware of the impact. Going forward, sustainability is going to be one of the deciding factors for consumers when choosing to purchase from a business. Thus, incorporating sustainable practices is going to be another key priority for supply chain leaders in 2022 as companies aspire to achieve carbon-neutral status. As of now, 56% of companies lack a carbon-reduction strategy. But, businesses are taking significant steps to meet the goals set at the COP26 conference.
- Supply Chain Risk Data Modelling: The recent events have caught traditional supply chains off-guard, exposing the vulnerabilities and highlighting poor risk management. With disruptions becoming more frequent, supply chain leaders are going to pay substantial attention to revisiting their risk management strategies. 28% of disruptions are due to supplier failures. With technologies like AI and advanced analytics, supply chain leaders can develop a risk management strategy backed by real-time data. Further, the impact of various actions can be assessed with available data, aiding informed decision-making. Thus, having a data-backed risk management model is going to be one of the major priorities for supply chain leaders this year.
- Stakeholder Relationship Management: A supply chains comprises several stakeholders, and effective communication with every stakeholder is vital to success. Coordination and cooperation with various stakeholders across teams are critical to supply chain efficiency. Thus, supply chain leaders must understand the requirements of these stakeholders to build an agile and efficient supply chain. Stakeholder relationship management is further sub-divided into areas like supplier management, procurement management, transportation management, etc. With automated workflows taking over, supply chain leaders can effectively communicate with various stakeholders and keep the communication channel open round the clock.
A supply chain comprises several key stakeholders such as suppliers, manufacturers, and retailers. Effective communication between these stakeholders is key to success. Supply chain digitisation ensures that these stakeholders can communicate seamlessly, aiding the creation of an integrated supply chain. As the global economy changes, the supply chain challenges are also going to change in nature. The priorities of supply chain leaders are going to be focused around such emerging challenges that pose a significant threat to productivity and efficiency. The importance of tech-enabled supply chain management solutions and advanced technologies like blockchain has increased substantially in the past few years. Automated supply chains are a reality. But automation only boost resilience. Supply chain leaders still have a huge role to play in mitigating risks and ensuring efficiency.
About the Author
Dan Weinberger is the Co-founder & CEO of Morpheus.Network, a blockchain agnostic supply chain management SaaS middleware platform. He is a UN supply chain expert and an international relations and logistics specialist who has been featured in leading global publications, including Forbes and Fox Business Network. As a supply chain and international relations expert, Dan has facilitated millions of dollars in global transactions with Fortune 500 companies (including Magna, Aecon, GE, Linamar, and Commercial Spring). Dan has enabled successful acquisitions with over 10,000 individual buyers and sellers as an innovative leader of business operations.