Five trends for supply chain and operations in 2021

30 December 2020 3 min. read
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2020 has been one of the most dynamic years ever for supply chain executives and professionals, with the Covid-19 pandemic disrupting existing supply chain and ways of working. So what’s in store for 2021? Experts at M3 Consultancy share five trends they believe will take centrestage. 

1. Re-shoring: going back to local

While production initially moved to low-wage countries due to globalisation, companies have increasingly embraced the notion of re-shoring in the past few years, transferring their overseas business operations back to their original locations. Significant advantages – such as delivery performance, product quality, and the flexibility to respond to customer demands – outweigh the benefit of low wages.

On top of that, this pandemic has revealed a major downside to globalisation: when borders closed, entire industries were shut down due to a lack of raw materials. In 2021, companies will re-determine which parts of their production will be global and which will be local.

Further reading: Procurement not yet monetising lower prices of raw materials

Five trends for supply chain in 2021

2. Modern (automated) control towers

Every big logistical operation requires a control tower to make the current situation visible. But that's not enough. Modern 2021 control towers should rely on data-driven daily steering with real-time ETA predictions for all logistical operations. Using artificial intelligence and advanced algorithms, they should predict whether any problems will occur — and if so, they need to provide resolutions.

In 2021, IT solutions will be available to do this in a fully automated and optimised way, and we expect companies will increasingly adapt them in the coming years. 

3. Omnichannel: putting the customer first

In 2020, lots of companies got into trouble because they used only one (disrupted) channel to reach the customer. Next year, they will likely aim for more success, maximum resilience, and increased business continuity by opting for omnichannel. This means they'll consolidate demand in all possible channels, including e-commerce, direct-to-consumer, distributors, and physical retail.

Omnichannel also puts the customer first, ensuring they can engage with your company through several channels at a time they prefer. 

4. Supply network collaboration

If 2020 has taught us one thing, it is that the supply chain can be fragile. On top of that, mere supply chains are old-fashioned – supply networks are the new trend. They revolve around collaboration that serves the end customer. Companies move towards introducing platforms that support tight collaborative workflows between suppliers, distributors, and customers.

These platforms should have a solid information flow when it comes to plans, forecasts, shipments, ETAs, and inventories, and everyone needs to have access to such data. It will make the supply chain more reactive and dynamic – and, therefore, resilient.

Further reading: Covid-19 supply chain disruptions pose multi-trillion economic threat

5. Growth in e-commerce: opportunity to innovate

The shift from offline to online buying has been going on for a while. But it's gained momentum in 2020, when the pandemic hit. More and more people buy products online, and we expect them to keep doing this after the coronacrisis is over. It's good news for the e-commerce business, which will have plenty of opportunity to innovate. In what ways? Examples include last-mile delivery, digital twins, warehouse mechanization, digital sorting, and autonomous driving.