THE TEN MOST IMPORTANT SCM TRENDS OF 2024
SKILLED LABOR SHORTAGE FORCES ACTION
The scarcity of skilled labor is putting companies in industrialized nations in
increasingly tough spots. And the situation isn’t improving: demographic changes
in countries like Germany are adding even more pressure on management.
Studies indicate that in certain areas, about a third of companies struggling to fill
job openings didn’t receive a single application.
To stand out, you’ve got to provide appealing conditions for both current and
prospective employees. Leading companies are ramping up their commitment to
career guidance and catering to the needs of Generation Z. Research suggests
that young people highly value flat hierarchies and demand modern IT systems in
their day-to-day work. Many companies can and must become more efficient or
make their workplaces more attractive. For instance, the forwarding association
Elvis aims to establish a meeting network for full truck loads to ensure more
truck drivers are home in the evening.
The cream of the crop also distinguishes their recruitment strategy, tailoring it
based on generations or specific groups such as newcomers or foreign workers.
They offer diverse retention programs and showcase perspectives through
flexible working hours, parental leave, and training and education initiatives.
SUSTAINABILITY LAWS AND THE CIRCULAR
ECONOMY FORCE BETTER PROCESSES
Sustainability and corporate social responsibility (CSR) are major priorities not
just for big companies, but for small and medium-sized enterprises (SMEs) as
well. Business partners, consumers, and politicians are all urging companies to
take swift action. The European Union is advocating for a broad supply chain law.
In the United States, we have laws like the Uyghur Forced Labor Prevention Act
(UFLPA), and individual states are also moving forward with their own new laws.
In Germany, a growing number of companies are focusing on reducing carbon
www.setlog.com info@setlog.com
TOP 10 SCM TRENDS 2024
dioxide emissions and adhering to the Supply Chain Act. However, truly effective
climate protection strategies need a shift in employee mindset and changes to
current work processes.
Company leaders are also looking more into how they can adopt circular
economy strategies to reduce waste. Businesses that can't track their products
from development, through procurement and production, to shipping will
struggle to meet the new demands from governments, consumer groups, and
customers. Small companies in many countries are still not covered by supply
chain laws. But they will have to deal with these laws in their daily operations,
especially once the new Europe-wide "Supply Chain Directive" (Corporate
Sustainability Due Diligence Directive, CSDDD) takes effect. This directive,
inspired by France's "loi de vigilance" and Germany's Supply Chain Law, includes
due diligence requirements focused on environmental protection and human
rights compliance. For SMEs, this means they can only do business with large
corporations if they follow all these new regulations.
BUILDING RESILIENCE WITH CONCURRENT COST
PRESSURE
Extreme weather, political turmoil, and pandemics: The changing landscape has
reshaped what supply chain managers prioritize. For instance, cutting supply
chain costs was once the main goal. But since the Covid-19 pandemic, when some
products were briefly out of stock even in advanced countries, the focus has
shifted more toward ensuring product availability and resilience. Essentially,
resilient supply chain management allows managers to quickly get things back on
track after disruptions caused by external events. Also, having a diverse supply
chain typically leads to better resilience. To maintain a strong supply chain,
leading companies are diversifying their supplier base and using various
transportation routes for critical products, materials, and components. However,
they still need to keep an eye on cutting costs. The most successful companies
have already fostered a cost-conscious culture among their employees. If you're
aiming for this, you should engage your employees in understanding revenue and
cost trends through open and transparent communication. Another key aspect is
increased flexibility. Businesses need to pinpoint their major cost factors and
figure out ways to minimize them.
www.setlog.com info@setlog.com
TOP 10 SCM TRENDS 2024
TRANSPARENCY IS BECOMING INCREASINGLY
IMPORTANT
Transparency is key for resilient and diverse supply chains. When it's there,
managers can quickly identify which part of the chain is impacted by an external
event. With today's economic unpredictability, many companies are re-evaluating
their contracts. Flexibility is crucial in these contract revisions. For better
planning, there needs to be a trust-based collaboration among all partners in the
supply chain, often requiring new ways to communicate. Modern IT tools help
share data, pool resources, and make fast decisions when demand fluctuates.
Companies that use IT tools and sophisticated algorithms to manage global
demand and supply are way ahead of those still using emails or spreadsheets.
Top companies are actively integrating collaboration into their daily operations -
both within internal teams and across the supply chain with all involved partners.
They use specific access rights to ensure everyone can share and exchange data
continuously, ideally in real time. With these platforms, companies enhance the
efficiency and responsiveness of their supply chains.
SUPPLY CHAIN AS A SERVICE BECOMES CRUCIAL TO
COMPETITION
Software as a Service (SaaS) has long been a staple for companies. But now, more
businesses are leaning towards outsourcing parts of their supply chain - like
manufacturing, distribution, procurement, logistics, or transportation
management. The digital supply chain of tomorrow is pushing companies towards
outsourcing, that is, using Supply Chain as a Service (SCaaS) or tapping into the
expertise of Fourth Party Logistics (4PL) specialists. Research shows this trend is
gaining traction because many companies lack the expertise, funds, or resources
to leverage all the new technologies out there. In the future, only the big
corporations might handle these tasks internally, at least partially. Gartner
experts believe this trend will only grow stronger. The perks of moving to a digital
supply chain are clear: end-to-end global electronic connectivity, higher
productivity, reduced costs, improved service, and more flexibility. Not keeping
up with this shift could lead to a competitive disadvantage and, consequently,
financial troubles.
www.setlog.com info@setlog.com
TOP 10 SCM TRENDS 2024
ERP SILOS ARE BEING DISMANTLED
Small businesses typically run on one or two internal systems, while some big
companies use 20 or more. Even before the Covid-19 crisis, the drawbacks of
these isolated systems were apparent. The pandemic just intensified these
issues. Using multiple systems at once led to unnecessarily large inventory
buffers, slowed down information flow, and resulted in high IT expenses for
interfaces, maintenance, and updates. More and more companies are doing away
with these silos because they can't handle the effort or the ongoing problems
they cause. Industry leaders are shifting their supply chain processes to
collaborative network platforms that break down these silos. This allows for real
data sharing and transfer across departments and different companies. Solutions
connected through REST API with smart IT architecture are eliminating these
silos, fostering collaborative, cross-company work and optimal data sharing.
GLOBAL AND REGIONAL SUPPLY CHAINS ARE BEING
MIXED
Businesses need a blend of global and regional supply chains. After facing crises,
companies can pinpoint where regional production is viable, yet the economy still
gains from global connections. Each industry requires its own procurement
strategy to increase resilience. Post-Covid-19, top companies started evaluating
where regional production is feasible. For instance, car manufacturers found that
bringing some production or components closer to home, known as reshoring or
nearshoring, is beneficial. While this might cost more, it makes the supply chain
more stable. However, in the consumer goods sector, due to the huge cost gap
between Europe and the U.S. on one side, and Asia on the other, it still makes
more sense to keep most production in Asia and traditional sourcing countries,
rather than seeking closer factories or building new ones. High energy costs,
rising interest rates, and the slow drop in inflation are reasons against the
expansion of nearshoring or reshoring in many sectors. Moreover, when it comes
to profits, purchasing, procurement, and supply chain management are
increasingly crucial. This is because the ability to raise prices in the lower and
mid-range product categories is becoming rare. Customers can easily compare
prices thanks to online shopping platforms. Nowadays, profits are made through
procurement, or more specifically, through optimizing processes.
www.setlog.com info@setlog.com
TOP 10 SCM TRENDS 2024
CYBER SECURITY BECOMES A TOP PRIORITY
Recently, with a rise in cyber-attacks causing serious impacts on businesses,
companies have ramped up their defenses against cyber criminals. A Bitkom
survey revealed that in 2022, half of the logistics companies in Germany boosted
their IT security measures. According to the survey, IT security management is a
top priority for most businesses: in nearly 90% of companies, IT security is a
board or management level concern. Leading companies are also regularly
training their staff on cybersecurity and conducting security audits. This is time
well invested: while the tools for cybersecurity are available, human error
remains the biggest vulnerability. Cyber-attacks have demonstrated that even
large companies with skilled IT teams can be disrupted and harmed for days.
Cybersecurity is increasingly vital in logistics and supply chain management, as
cyber criminals can access sensitive data through the growing network and
digitalization of companies. This data often doesn't just come from the affected
company, but also from its entire network.
AUTOMATION PROJECTS ARE PROGRESSING
Due to global politics and current consumer trends, some industries are finding
their finances tighter than in past years. Yet, many companies are still pushing
forward with ongoing automation and digitalization projects or starting new ones.
The reality is clear: only businesses that keep pace with high-efficiency logistics
and top-notch service levels will lead the market. Allocating budgets for
automation, robotics, digitalization, energy efficiency, and staffing is a smart
investment. In internal logistics, for example, there's a need to shift from manual
processes to automated and digitalized ones. Robotics and machine learning are
crucial to speed up operations while minimizing errors. IT professionals are
looking at digitalization across the entire supply chain, launching new projects at
various stages. A recent example is the adoption of the digital consignment note
(eCMR), which has been making headlines.
www.setlog.com info@setlog.com
TOP 10 SCM TRENDS 2024
OPEN-SOURCE SOFTWARE IS INCREASINGLY
CONVINCING
The use of open-source software as operating systems for computers is nothing
new. In supply chain management, however, many IT departments have resisted
this trend. However, there are now very successful practical examples based on
clear rules - such as those of the Open Logistics Foundation. Its members no
longer invest dozens of hours in programming simple standard interfaces
themselves, but instead use existing interfaces from their partners, with whom
they are sometimes in fierce competition. However, anyone who engages in this
kind of cooperative work needs a new mindset within the company. A rethink is
also necessary in other areas - for example, when it comes to relying on new
technologies such as artificial intelligence to make decisions. However, one thing
is clear: the best of the best will automate processes even more and use the
advantages of artificial intelligence in the area of prescriptive analytics and
autonomous agents to achieve efficiency gains. With new tools and technologies,
companies can speed up everything from planning to delivery, reduce buffers,
manage processes efficiently and ultimately counteract the shortage of skilled
workers. In all IT activities, it is more important than ever that companies protect
themselves professionally against hacker attacks on their systems - as the
serious consequences of the recent attacks on the IT landscapes of large logistics
companies have shown.
www.setlog.com info@setlog.com
TOP 10 SCM TRENDS 2024
About SETLOG
Setlog is a provider of software solutions for Supply Chain
Management, Supplier Management and CSR. Our software is used by
over 150 brands in apparel, electronics,
food, consumer goods and hardware. We
offer the ability to digitize and manage
your supply chain stress-free.
More
information
here!
Some of our customers:
www.setlog.com info@setlog.com
