As 2024 unfolds with the backdrop of geopolitical tensions, Suez and Panama Canal backlogs, and challenges posed by overstocked inventories, the supply chain landscape is poised for significant shifts. While predicting the precise trajectory remains elusive, the events of the last four years have demonstrated the industry's inherent volatility. Amidst this uncertainty, certain trends are expected to endure, such as the pervasive presence of AI in supply chain operations and an increasing emphasis on sustainability and resilience. Yet, the pressing question remains: how will these trends manifest in the evolving tapestry of the supply chain throughout the rest of the year?
There are some trends that we expect to stick around—from AIs presence in supply chain to the prioritization of sustainability and resiliency—but how will that look?
Companies will continue to discover high value use cases for digitization and AI
Digitization is the key to enabling a resilient supply chain. A digitalized supply chain equips companies to tackle apparent disruptions quicker and more efficiently. Digitization also connects companies and fosters the mending of fragmented supply chains and transforms them to be more collaborative and agile networks for supply chain players across the board. After all, organizations nearly doubled their investment in supply chain innovation in 2023 from the previous year, according to Catena’s Supply Chain Trends & Insights: Innovation report. Additionally, 67% of CEOs plan to increase investment in disruption detection and innovation processes.
AI will continue to play a crucial role in automating and optimizing the entire supply chain. There are several use cases for AI and generative AI, including the ability to autogenerate customs documents and other logistics documents, enable copilot for Control Tower users to optimize disruption outcomes as well as the ability to autogenerate standards.
Advanced analytics, powered by machine learning algorithms, will enable companies to gather insights from vast amounts of data. This enhanced visibility will empower organizations to make informed decisions, identify potential bottlenecks, and proactively address issues before they escalate.
There is proof of the efficacy of companies investing in supply chain technology such as AI and IoT. With digitalizing processes, visibility and resiliency have seen huge improvement.
Sustainability and transparency take center stage
Sustainability is no longer a buzzword; it is a critical consideration for supply chain leaders. In 2024, we can expect supply chain players to make a significant shift towards eco-friendly practices and focus on reducing the environmental impact of supply chain operations. After all, organizations' supply chains often account for more than 90 percent of their greenhouse gas emissions, according to the EPA.
Customers are expecting transparency from companies to help meet sustainability initiatives. With the ability to locate the pain points for emissions in the supply chain, they can then plan to take actionable steps to improve and resolve them.
From sustainable sourcing of raw materials to implementing green logistics solutions, companies recognize the importance of incorporating sustainability into their supply chain strategies. not only aligns with consumer expectations but also contributes to long-term cost savings and brand reputation.
Resilience and risk management to go beyond visibility
The disruptions witnessed in recent years, from natural disasters to global health crises, have underscored the importance of building resilient supply chains, but visibility alone is not enough! In 2024, risk management will take a front seat as companies aim to proactively identify and mitigate potential disruptions. Diversification of suppliers, the adoption of agile supply chain models, and the use of predictive analytics for risk assessment will become standard practices.
Companies in the semiconductor space, for example, would benefit from this strategy. Taiwan’s droughts have affected the production of semiconductor chips; why? The process requires plenty of water. The markets’ dependency on their production leaves its supply chain vulnerable to any disruptions, so the ability for companies to mitigate this risk and tackle it head on puts them ahead of any backlogs within their own operations.
Predictive analytics’ role in risk management goes beyond visibility by anticipating disruptions and providing options for supply chain players to mitigate risk and navigate disruptions. The goal is to create a supply chain that can adapt swiftly to unforeseen challenges without compromising efficiency.
Although AI and digitization will be at the forefront of supply chain transformation in 2024, all the aforementioned trends work in tandem to create improvements in visibility, efficiency, resilience, and customer satisfaction across the board. Companies that strategically integrate these technologies into their supply chain operations will be better positioned to navigate the challenges and opportunities of the evolving global marketplace throughout the rest of the year and beyond.