Top Technological Trends in Supply Chain Management That You Shouldn't Miss Out

Recent technological advancements, including AI & ML, blockchain, automated robotics and drones, 3D printing, cloud computing, cyber-physical systems, etc., have reshaped supply chain management, marking a significant paradigm shift in the industry. This transformation delivers speed and agility, allowing quicker responses to daily demands.

It is also now possible to solve problems more proactively, substantially reducing errors and inefficiencies. Integrating advanced technologies in supply chain processes streamlines operations and fosters a more dynamic and responsive business environment.

KPMG predicts that the future landscape of supply chain management trends will likely be shaped by autonomous, self-learning systems that manage various aspects of the supply chain. It can also help you develop a more agile and responsive supply chain that can capture the promise of value creation, cost reduction, and improved shareholder value.

However, adapting to this changing environment requires moving away from traditional, compartmentalized approaches. To help you get a more comprehensive understanding, in this blog post, we explore:

  • Managing the supply chain strategically
  • Nine key trends in supply chain management

Let’s dive in!

The Strategic Role of Supply Chain in Business

In achieving business objectives, supply chain management has become increasingly critical, affecting many aspects of operations. This involves managing the flow of products and services and optimizing it to enhance business performance and customer satisfaction.

A well-managed supply chain leads to considerable improvements in cost efficiency, product quality, and customer service, which are crucial contributors to the overall success of a business. This clear and cohesive approach underscores the integral role of supply chain management behind business growth.

9 Key Trends in Supply Chain Management

The global supply chain is evolving at lightning speed, racing to keep up with technological advancements. Here are the top nine trends in supply chain management in 2024 to look for:

1. The Rise of Operational Generative AI

GenAI-driven software can handle large amounts of data, analyze complex situations, and improve its understanding of a company's supply chain over time. It is set to transform how we manage supply chains, logistics, and procurement.

GenAI assists in procurement, ensures regulatory compliance, streamlines manufacturing workflows, and enables virtual assistants to handle routine logistics queries. Organizations should consider integrating it into core business processes to make the most of this technology.

Key points to consider:

  • GenAI presents a compelling case for integration into your supply chain, offering significant enhancements to the efficiency and effectiveness of employees, inventory, and assets while also driving cost savings.
  • Evaluate your supply chain analytics team's capacity, focusing on equipping them with skills beyond just handling internal data. They should also be adept at collecting external supply chain data and training chatbots.
  • Assess the data from your manufacturing and distribution sites to identify potential opportunities for GenAI implementation. Success with GenAI hinges on the availability of high-quality internal and external data, both structured and unstructured.

2. The Digital Wave

Incorporating digital methods in manufacturing and supply chain management can significantly boost company profits. This approach is particularly crucial in electronic supply chain management (e-SCM), where digital tools and strategies are pivotal in enhancing efficiency and reducing costs.

Digitization involves deploying tools and technologies to streamline various processes, from production to delivery. This approach leads to faster production times, more accurate tracking of goods, better decision-making through real-time data, and ultimately increased profitability.

In the e-SCM, digitization enables better integration of various components, from sourcing to delivery of finished products.

To illustrate the impact of digitalization, consider the case of a large process manufacturer in Asia, specializing in the import, processing, and distribution of commodities like vegetable oil and beverages. Prior to digitalization, the company, with a revenue of USD 500 million, was losing approximately 1.5% to 3.0% of its revenue (USD 7.5 million to USD 15 million) annually due to inefficiencies in its supply chain, including leaks, pilferages, delays, stock-out problems, and vendor issues.

By adopting digital solutions, the company was able to eliminate 40% to 70% of these losses with minimal additional capital expenditure. The payback period for the digitization project was less than two months, showcasing the significant benefits and rapid return on investment achievable through digital transformation​.

Source

Key points to consider:

  • Emphasize adopting technologies like automation software and data analytics platforms to enhance efficiency.
  • Ensure your team is well-trained in using these digital tools to fully utilize their capabilities.
  • As you move towards digital solutions, strengthen your cybersecurity to protect your supply chain data.
  • Continuously evaluate the effectiveness of your digital tools and be open to adapting new technologies as they arise.

3. Automated Hands-Off Planning

Modern supply chains are complex, and traditional methods no longer suffice, often leaving financial impacts unclear. AI-powered planning tools, such as integrated business planning (IBP), sales and operational planning (S&OP), etc., can simplify the process. They reduce manual intervention and employ advanced analytics to interpret complex data automatically.

Key points to consider:

  • SCM decision makers should improve their analytical skills and learn how to handle relationships better for enhanced collaboration.
  • Keep business performance goals in mind, and don't let technology alone guide your decisions
  • Incorporate data into your processes and manage it effectively.
  • Develop relationships with technology partners and experts to get access to the skills you need.

4. Data: The Operational Keystone

Managing data in supply chains is challenging due to the constant creation of records across systems. Digitization, IoT devices, and tracking systems often contribute to this voluminous data. However, this often leads to isolated and fragmented data, making it hard to get a complete view of the supply chain.

To address this, having the right available, high-quality, timely, and consistent data is important. Supply chain experts must efficiently process complex data to make informed decisions and enhance operations. One solution is to focus on specific use cases to improve data quality, leading to better and refined data over time.

Key points to consider:

  • Pay close attention to data availability, quality, reliability, timing, and consistency. Good data helps businesses make smart decisions, optimize processes, and stay resilient during disruptions.
  • Recognize that managing data is an ongoing task, not a one-time goal.
  • Continuously refine your data strategies, adapt to changes, and learn from your experiences.
  • Align your data with clear goals and link it to creating value, like cost savings, better efficiency, improved customer satisfaction, and innovation.

5. The Rise of Electric Vehicles in Logistics

The logistics industry will rapidly adopt automation to reduce emissions. These changes will extend to areas like air freight and doorstep deliveries. The shift from vehicles that need human supervision to completely self-driving vehicles is about to make a big leap, moving from closed, controlled areas to regular streets.

Smart logistics integrated with AI, IoT, data analysis, and cloud computing will improve traditional route planning. It will also use machine learning and sensors to improve how networks work exceptionally, the customer experience, safety, and meeting sustainability goals.

Key points to consider:

  • Take a close look at your vehicle's fleet, where they go, and the scope of switching to the electric models.
  • Analyze vehicle data, IoT inputs, delivery records, customer feedback, and environmental data for informed decisions.
  • Develop an electric vehicle strategy using cloud-based AI for efficient transport networks and route electrification priorities.

6. Business Will Spend More On Getting Better Supply Chain Visibility

A lack of supply chain visibility creates compliance and risk challenges. According to a McKinsey survey, 45% of participants either lack insight into their upstream supply chain or can only trace it to their first-tier suppliers. This limited visibility frequently results in disruptions, inefficiencies, and difficulties in inventory management.

By looking beyond the supply chain's first layer, companies can better understand their entire network, including their partners. This enhanced clarity and visibility allows companies to:

  • Identify the root causes of issues: By looking deeper into their supply chain layers, organizations can pinpoint the sources of problems and disruptions, enabling quicker and more effective resolutions.
  • Proactively identify new risks: A broader view of the supply chain helps identify emerging risks, allowing companies to implement proactive risk management strategies.
  • Promote sustainability and transparency: Deeper supply chain insights allow companies to work towards sustainability goals by making better decisions about responsible sourcing and production practices.

This deeper insight helps them find the sources of issues, spot new risks, and work towards goals like sustainability and transparency. Tools like control towers and digital twins reveal supplier relationships and factory locations, enhancing supply chain depth understanding. Widespread use of these tools strengthens supply chains, ultimately strengthening their resilience.

Key points to consider:

  • Companies will use digital tools such as RFID technology, IoT sensors, cloud-based supply chain management software, and advanced data analytics platforms for a holistic supply chain view, improving buying decisions, performance management, and ESG evaluation through collaboration and data-driven insights.
  • People like Logistics Coordinators, Operations Managers and Supply Chain Analysts can give a more complete view of the supply chain, including potential problems further down the line.
  • As more organizations work on their visibility projects, look for opportunities to partner up and share data and insights.

7. The Rise of Low-Code Platforms

Supply chains traditionally involve complex steps and various data sources, leading to slow and error-prone software changes.

Low-code platforms simplify and automate supply chain tasks by connecting systems through APIs and pre-built integrations. This speeds up development and allows rapid adaptation to market changes. These user-friendly platforms enable non-technical users to create and launch new features quickly.

Low-code platforms also enhance integral supply chain functions like planning, manufacturing, collaboration, and tracking, fostering organizational flexibility and responsiveness.

During the COVID-19 pandemic, retail supply chains faced severe disruptions, including demand shifts, panic buying, container shortages, and geopolitical issues. These challenges resulted in 5% to 20% revenue losses for retailers, as per MarketWatch. Low-code platforms played a crucial role in helping retailers adapt to these changes. They enabled the integration of eCommerce systems with enterprise resource planning solutions, allowing retailers to respond promptly to shifting demand signals.

Additionally, these platforms assisted in managing last-mile fulfillment challenges, a critical aspect given the rapid growth of eCommerce during this period​.

Key points to consider:

  • Clearly define and document your supply chain processes, tasks, and timelines, and identify where low-code platforms can be applied.
  • Apply low-code apps to transform supply chain management into a more agile, resilient, and predictable system.
  • Employ low-code platforms to modernize outdated systems, automate processes, and connect isolated systems.
  • Allow stakeholders and supply chain experts to create apps that provide insights and actionable tasks and foster collaboration within the supply chain.

8. Digital Twin Technology in Supply Chains

Digital twin technology is becoming increasingly important in modern supply chains. It involves creating a digital replica of physical assets, systems, or processes to simulate and analyze their performance in real-time. This tech enables enterprises to make data-driven decisions, optimize operations, and predict potential risks and issues before they occur. By leveraging digital twins, businesses can achieve greater efficiency, reduce costs, and enhance the overall resilience of their supply chains.

For example,  a well-known retail giant, Walmart uses digital twin technology to optimize store layouts and inventory management. By creating digital replicas of their stores and populating them with virtual inventory, Walmart can simulate various layouts and assess factors like product placement and aisle arrangement. This technology helps them determine the most customer-friendly setup. Additionally, in inventory management, Walmart uses digital twins to analyze and optimize inventory levels, product positioning, and replenishment strategies. By simulating different demand scenarios, seasonal fluctuations, or supply chain disruptions, they can fine-tune their systems and processes, resulting in minimized stockouts, improved product availability, and enhanced customer satisfaction.

Key points to consider:

  • Implement digital twin technology to gain insights into your supply chain's performance and identify areas for improvement.
  • Use digital twins' real-time data and analytics to optimize logistics, inventory management, and production processes.
  • Enhance your ability to predict and mitigate risks by simulating different scenarios and understanding their potential impact on your supply chain.
  • Foster a culture of innovation and continuous improvement by regularly updating and refining your digital twin models in line with changing market conditions and technological advancements.

9. ESG and Scope 3 Emissions in Focus

Businesses are shifting towards tracking emissions across their entire value chain (Scope 3 emissions), which is now a legal requirement in many countries. Understanding and managing these emissions starts with setting a baseline to measure progress and make plans to reduce emissions.

While measuring Scope 1 and 2 emissions is easier, Scope 3, which includes the whole supply chain, is much more complex. To reduce carbon emissions, companies are looking for detailed information from suppliers. They are adopting mixed methods and digital platforms to efficiently collect suppliers' emissions data, facilitating inclusion in sustainability reports.

Key points to consider:

  • Categorize suppliers by their spending levels and importance to focus on key parts of the supply chain.
  • Launch a supplier program for Scope 3 emissions and sustainability goals and adopt cost-effective technology for emissions data collection.
  • Train employees on Scope 3 emissions, carbon reduction, and tech for carbon data with change management in the decarbonization plan.

Lead the Future of Supply Chain Management Trends with Tata BB Matrix

Supply chain agility is increasingly dependent on effective data management and usage. As a comprehensive supply chain management(SCM) platform, Tata BB Matrix addresses this need by offering supply chain management platform that enhance visibility and provide data-driven insights, which are important for efficiently managing goods from suppliers to customers.

This approach is particularly beneficial for optimizing e-commerce, omnichannel commerce, manufacturing operations, logistics, healthcare, and financial services.

As supply chain managers navigate the challenges of market fluctuations, tools like Tata BB Matrix, part of a comprehensive cloud business management system, play a significant role. They automate key processes and deliver operational and financial insights, aiding in informed decision-making and ensuring resilience.

To learn more, book your call and talk to our experts.