2021 and Beyond: The Outlook for Logistics and Supply Chain Management

What Shippers Can Expect in the Next 18 – 24 Months

Key takeaways
  • Supply chain disruptions will continue to challenge daily global operations.
  • Market uncertainty and volatility will remain high for the foreseeable future.
  • Strategic planning and Supply Chain Risk Management will take on greater significance.
  • Adopting new technologies requires a more-highly-skilled and trained workforce.
  • To survive and profit, future supply chains must be agile, resilient, and responsive.

Since the start of 2021, we’ve seen global supply chains tested. Cybersecurity breaches. Extreme weather. Geopolitical upheaval. Spiking inflation. Supply shortages. The list goes on…

And the next 18 – 24 months promise little change from today’s turmoil.

This blog post delves into steps you, as a shipper, can take to build flexibility into your supply chain. Doing so will help you hone your competitive edge and keep your customers happy.

The Advantage of Preplanning

Given today’s non-stop supply chain disruptions, preplanning has become mandatory. Of course, most businesses are already engaged in preplanning. However, now, businesses must take preplanning to a new level. It must be more comprehensive and more detailed.

You must consider all manner of disruptions and risks to survive. Those who excel at this will profit. Those who don’t will likely struggle to survive or fail.

Global supply chains remain under pressure. Capacity constraints continue as the Delta variant surges. Supply chain bottlenecks will likely continue, so you should consider distribution alternatives to avoid bottlenecks.

You should also consider relooking your inventory stockage policies. Besides that, you shouldn’t forget about hiring the right mix of qualified employees. You should also consider training your employees due the demands of new technologies.

As for technology investments, you should review how they fit into your strategic plan. Any short-term adjustments to today’s situation should fit into your strategic plan. Nesting your short-term plans into your long-term plans, results in a more responsive supply chain.

Done correctly, preplanning can guide you through the daily issues. At the same time, it can prepare you for tomorrow’s obstacles.

Update and Adjust Your Supply Chain Risk Management (SCRM) Plans

It almost goes without saying, you need to dust off your supply chain risk management plans – now. One of the key features of successful companies is having a viable SCRM plan.

You SCRM plan must cover the gamut of risks from Covid-19’s Delta variant to supply shortages. Without a crystal ball, you need to take steps to eliminate, prevent, or mitigate risk.

Many issues are obvious, but others are not. Hurricane Ida is the most recent example of the havoc an unknown event can wreak on supply chains. There’s no telling the full impact on supply chains yet, but the costs are monumental. Bloomberg reports financial costs will come to about $18 billion.

Meanwhile, capacity issues will affect operations through 2022, according to some industry leaders. This means you can expect pricing pressures to continue as well.

Also, projections in 2021, called for rising risks, making SCRM planning imperative. Complexity has come in the form of sourcing issues arising from trade wars. Hence, on-shoring and near-shoring activity is on the rise.

Also, cybersecurity, supply chain digitization, and resiliency remain key challenges to consider.

According to Abe Eshkenazi, CEO of Association for Supply Chain Management stated, “…companies will need to focus on resiliency, in conjunction with risk prevention, to mitigate adverse events faster than the competition, take market share, and outperform”. (“11 Supply Chain Predictions for 2021 – Inbound Logistics”)

So SCRM should be a major component of both short- and long-term planning. Your business’s success depends on it.

Adjusting and Adapting to New Trends Shaping the New Normal

Coming out of the pandemic has increased complexity for everyone. So, adjusting and adapting to a new operating paradigm takes on greater importance.

It has fazed companies with issues like capacity constraints and supply chain bottlenecks. These have led to rare supply shortages global supply chains have strained to tackle.

We’ve already mentioned some of the changes shaping the New Normal. Adding to them are container shortages, increased online shopping, and shifting distribution modes.

For example, some companies have shifted to air shipping to ensure inventory availability. Those decisions reflect a renewed focus on customers as opposed to costs and the bottom line.

The customer-cost dynamics were changing before the pandemic. But now it appears they’ve shifted in favor of ensuring customer satisfaction. At the same time customers want their goods better, faster, and cheaper. So, expect cost pressures to continue.

This is where digital technologies enter into the picture. Understand, technology is not a cure-all. Yet it’s a major factor in aiding businesses adjust and adapt their supply chains to the New Normal

Those technologies include AI, Blockchain, and, robotics, to name a few. That immediately suggests you must relook your workforce. Adopting these new technologies will result in a shift from lower level jobs to higher level ones. Hence, you will need a more highly-trained and educated workforce.

New technologies demand employees be more strategic and analytical. Specifically, they will need to manage algorithms and track and interpret decision-making systems. Demand for data scientists will soar. To remain competitive, you need to prepare for that now.

Strategic Next Steps

Until now, global supply chains fared well by mastering tactical and operational challenges. Tomorrow, that will no longer be true. Future supply chains will demand a strategic approach.

That is your business must look beyond the enterprise. Your business must consider the ecosystem in which it operates. That means you must examine your supply chain from your suppliers to your customers.

Global supply chains have become more complex, more dynamic, and more volatile. That introduces greater uncertainty that may exceed your capabilities.

That leads to another emerging trend. We’re seeing a move to partnerships to address the complexities, dynamics, and volatility of the New Normal. Partnering with a reliable, and experienced 3PL can fill that void. It can make a difference.

American Global Logistics is 3PL, which can make that difference in your supply chain. We’ll address today’s concerns while preparing you for long-term success.

Contact us to learn more about how partnering with us can help you. We’d be happy to discuss your needs, issues, and concerns.