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What to Expect in 2024- Supply Chain Industry Trends.

2024 is right around the corner, and what a year 2023 has been for supply chain management. From global conflicts to a resurgence of the COVID-19 pandemic, 2023 has had a huge impact on business supply chains. You might be at a stage where you’re reflecting on this year’s successes – but it’s time to have your supply chain network prepared for what’s to come in 2024. In 2024, navigating the complexities of the global market will require a proactive strategy that goes beyond just responding to trends; rather, it entails anticipating and embracing them.

Here, we’ll examine four factors that we believe will significantly impact how company supply chains are expected to develop in 2024. Our goal is to provide you with knowledge on what to expect so that you can assist your business to succeed more than just survive.

1. More organizations will advance the digitization of their supply chains

The digital transformation of an organization’s supply chain has gone from having first-mover advantage to becoming industry standard. In fact, digital supply chain has clinched first place in the Association for Supply Chain Management’s top 10 supply chain trends for 2024.

Many organizations have already begun the process of supply chain digitization by leveraging automation and business intelligence to establish master data management that aggregates information from the entire supply chain and external sources (e.g., internal historical sales data, public socioeconomic data, and competitor data). Wherever possible, organizations will continue to search for opportunities for greater automation and making data-driven decisions. The end result is cost savings, greater accuracy, and faster processes in the long run.

2. Labor shortages and rising inflation will continue to be critical risks in SCM

Managing a supply chain effectively goes in tandem with mitigating risks effectively. We expect that labor concerns and strong inflationary pressures will continue challenging SCM in the next year. Many industries and businesses are interconnected; labor shortages in one can create a ripple effect on the others.

During the pandemic, the manufacturing industry lost about 1.4 million jobs, and even though the pandemic is now behind us, there are still 616,000 unfilled manufacturing jobs as of August 2023. An understaffed factory can mean slower production, skewed inventory levels, disrupted distribution, delayed delivery, and unsatisfied customers. 

3. Transparency is becoming increasingly important

Transparency is a prerequisite for resilient and diversified supply chains. If it exists, managers can recognize more quickly which part of the chain is affected by an external event. Due to the high volatility in the economy, many companies are reviewing existing contracts. Flexibility plays a central role in the realignment of contracts. In order to be able to plan better, trust-based collaboration between all partners along the supply chain is necessary, which often requires new communication platforms. Modern IT tools can be used to share data, pool resources, and make quick decisions in the event of dynamic fluctuations in demand.

Companies that use IT tools and suitable algorithms to manage demand and supply globally will be a decisive step ahead of the competitors, who still work with emails or spreadsheets. Leading companies are no longer just writing the topic of collaboration on their to do lists but are implementing it in everyday life - both in internal teams and in the cross-company supply chain between all partners involved. Based on specific access rights groups, everyone has  access to data and exchanges it on an ongoing basis - ideally in real time. With the help of platforms, companies improve the efficiency and responsiveness of the supply chain.

4. Cyber security becomes a top priority

As there have been more cyber-attacks with serious consequences for companies in the recent past, companies have taken additional measures to protect themselves against criminals. According to a survey by the digital association Bitkom, every other logistics company in Germany tightened its IT security measures in 2022. According to the survey, the management of IT security is given a correspondingly high priority in most companies: In almost nine out of ten companies, the area of IT security is anchored at board or management level. Leading companies also regularly train their employees on this topic and have security audits carried out. And this is time
well spent: the tools for cyber security are available, but the greatest weakness is the human being. Cyber-attacks have shown that even large companies with expert IT specialists can be paralyzed and damaged for days.

The issue is playing an increasingly important role, especially in logistics and supply chain management, because cyber criminals can gain access to sensitive data due to the ever-increasing networking and digitalization of companies. And this data usually originates not only from the company directly affected, but also from its network.

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