March 4, 2024 - 17 minutes read
2024 Supply Chain Trends | Mastering Data Management for Resilience & Growth
The events of the past three years have wreaked havoc on corporate planning. While the pandemic, inflation, and the Russian invasion of Ukraine have taken center stage, there are also increasing trade tensions, commercial shifts, port blockades, and other supply chain gaps. Many supply networks have been disrupted or fractured, causing business executives to speculate what “the new normal” may entail for their organizations.
Why is supply chain resilience becoming so important?
Notably, many companies are considering the trade-offs between resilience and efficiency as they re-prioritize their resources for the future. Shifts in strategy are becoming more frequent and a new roadmap is needed to incorporate the increasing frequency of changes, with supply chain resilience taking a larger role.
Supply chain disruption is far from over; in fact, many businesses already recognize that a new approach is required to handle the inevitability of disruption. This has far-reaching ramifications for company executives’ decisions on technology investments, network localization initiatives, and supply chain partners.
In response to growing upheaval, businesses are trading efficiency for greater resilience. For example, companies may prioritize more expensive suppliers in less risky markets to balance their supply chains. Firms are striving to reduce these costs by investing in technology, streamlining and regionalizing supply chains, and, in certain cases, simplifying product design to make components easier to acquire.
Operational costs are rising as firms seek new suppliers to fill gaps and new technology to improve supplier visibility. According to GEP’s “The Business Costs of Supply Chain Disruption” report, one-third of organizations claim their supply chain expenses have increased, making this the most common consequence of unanticipated supply chain disruptions.
Greater localization, shorter supply chains, and increased supply chain visibility help enterprises monitor and reduce operational costs, as well as generate more robust supply systems that can withstand future shocks.
According to the previously mentioned GEP research, more than 50% of CEOs believe their companies need to make significant changes to their supply-chain operations in 2024.
Resilience: what does it mean to have a resilient supply chain?
In 2024, companies face a dilemma as they consider prioritizing reinvestment in capital stock over enhancing supply chain resilience, according to S&P Global Market Intelligence. The backdrop includes diminishing profit margins and heightened capital expenditures relative to profits. While larger enterprises may take calculated risks on emerging technologies to fortify their supply chains, most players in the industry are hesitant to embark on digital transformations without a clear and swift return on investment. Implementing a technology toolkit for resilience necessitates a careful evaluation of cost-effectiveness.
Building a resilient supply chain involves a prolonged commitment to organizational agility, including inventory policy adjustments, incorporation of new technologies, and potential restructuring of sourcing strategies through international diversification or strategic supplier selection. Despite the enduring importance of supply chain resilience in 2024, corporations may find themselves constrained in their willingness and capacity to invest in inventory management and multisourcing due to dwindling profits and high financing costs. While the imperative for resilience persists, the commitment to spending remains uncertain in the face of challenging economic conditions.
The GXI Vol.5 survey has a few interesting insights:
- More than 60% of supply chain leaders agree that resilience in their company’s supply chain is more essential than speed and efficiency.
- 32% of respondents strongly agree that resilience is more important than efficiency.
- 44% of companies said they had become overly reliant on suppliers in specific countries, implying that companies will seek supplies from a broader range of countries in the future.
These statistics make it clear that businesses are aware of the need to improve their supply-chain resilience and many are actively evaluating new approaches. For example, just under a third are considering making their supply chains more local. But diversifying suppliers is just one way to improve supply chain resilience. The key to long-term risk mitigation and proactive management of supply chain exceptions is access to granular, timely, and structured data. The road to successful data management, in turn, starts with digitalization.
The digitalization of supply chain networks enables businesses to better manage the efficiency vs. resilience trade-off. Cloud, big data, artificial intelligence (AI), and blockchain-based technologies enable businesses to monitor their suppliers more rapidly and in greater detail and are proving critical for anticipating and managing disruption.
Why supply chain visibility is essential for a resilient supply chain
Access to all processes and goods involved in a global supply chain is one aspect of supply chain visibility. It enables businesses to track, measure, and control all of their items at any point along the supply chain journey. This visibility allows businesses to consolidate supply chain data and anticipate spending, uncover operations gaps, decrease expenses, and boost efficiency from a single location. The resulting increase in efficiency also enables improved industry collaboration and better customer service results.
Source: KPMG, Q4 2023
Finally, supply chain visibility extends beyond the concept of transparency. It gives businesses a centralized view of inbound, outgoing, and third-party shipments across all carriers and modalities, for any worldwide location, regardless of where those shipments were initiated or booked. Achieving this level of global exposure is difficult, and most organizations struggle to make their supply networks more open. Establishing end-to-end supply chain visibility requires a strong supply chain data infrastructure that makes data consolidation and harmonization possible.
US- and Europe-based executives who agree and disagree that they need greater visibility and control over their supply chains
Source: GEP “The Business Costs of Supply Chain Disruption” report
Emerging supply chain trends for 2024
Few things surprise leaders and their enterprises, considering what they have weathered in the years since the pandemic.
Even as the obstacles mount (global conflicts, export shortages, increased port congestion, energy disruption, economic constraints, evolving work environments), enterprises are unquestionably more equipped and better able to react to unpredictability quickly. Part of this preparedness is the result of taking a proactive approach to supply chain resilience. Here’s a quick overview of trends that supply chain leaders will be focusing on in the upcoming years.
Strategic sourcing and restoring
Firms are aware that geopolitical considerations may be the most expensive of all risks. The Russian-Ukrainian war, port blockades, and trade tensions between the United States and China threaten to split the global economy: at worst, multinational corporations could be obliged to reorganize their supply networks or, in some instances, operate duplicate supply chains with different technical standards.
As supply chains grow increasingly regionalized, conversations around near-shoring and strategic sourcing will become more common. Businesses will incur additional expenses when they migrate to more stable and, in some circumstances, less cost-competitive marketplaces, invest in supply chain resilience strategies over efficiency, and make longer-term investments in technology. Discussions are needed at the boardroom level to evaluate prudent investments to counter global supply chain disruptions.
Micro warehousing
Decentralization of warehousing, or micro warehousing, involves establishing a network of local fulfillment centers in strategic locations to improve last-mile delivery efficiency and reduce transit times.
Getting closer to consumers may include creating smaller warehouses in locations like shopping malls, allowing for faster delivery to clients while also incorporating a self-pickup capacity so that customers can pick up their items locally.
The method, while now employed mostly in e-commerce, the pharmaceutical industry, and supermarket distribution, is becoming increasingly popular in other industries. According to a recent Logistics IQ analysis, the micro fulfillment sector will have a total value of roughly $10 billion by 2026.
Digital supply chain, or supply chain 4.0
When you look at the GXI Vol.5 survey, only a small percentage of businesses have digitized their supply chains at this point. Fewer than 40% of companies have implemented digital platforms and data analytics, with less than a third utilizing cloud computing or taking advantage of the Internet of Things (IoT). In response to the unpredictable nature of global conditions, IDC anticipates a significant shift by 2025, with 75% of business leaders leveraging digital platforms and ecosystem capabilities to build resilient supply chains. This strategic move aims to facilitate the adaptation of their value chains to navigate and capitalize on emerging opportunities in new markets, industries, and ecosystems. In addition, many firms will benefit from moving from analog supply chains to digital ones.
Supply chain 4.0, or the digital supply chain, represents the next generation of supply chain operations that work through a linked, integrated digital environment. Many current concepts, like IoT, AI, blockchain, cloud computing, and smart devices, fit under the supply chain 4.0 umbrella.
These digital technologies enable intelligent supply chain management by transitioning from a linear ecosystem to one in which data flows in multiple directions from a centralized platform.
The digital supply chain requires real-time information and simultaneous communication throughout the whole chain. It increases a company’s forecasting capacity, automates processes, provides for cost reductions, and improves the customer experience. One of the vital parts of the digital supply chain is a strong and agile data infrastructure.
Without a centralized data platform or control tower functionality, it is becoming increasingly difficult to manage the global scope of supply chain processes daily.
Supply chain transformation: data management solutions to the rescue
Modernization of supply chain software is vital to completing digital transformation while meeting evolving business requirements. Digital supply chain insight can reduce the order-to-cash cycle, resulting in a supply chain that is faster, more flexible, and more efficient.
Visibility and exception monitoring allow for faster responses to disruptive actions that can derail even the best-laid supply chain plans. To support this monitoring, sophisticated, standardized, and integrated data is required as organizations strive to make their global supply networks more nimble and robust.
When combined with well-designed automation, this symbiotic relationship can provide the finest supply chain visibility imaginable. By gathering data from linked devices, businesses can uncover new global supply chain patterns and trends.
How to achieve supply chain resilience with data centralization
EY’s H2 2023 report states that supply chain resilience carries significant potential to:
- boost income by 3–5%
- sharpen forecasting precision by 5%
- speed up supplier lead times by 50–60%
- enhance overall equipment efficiency (OEE) by 15–30%
How to improve supply chain resilience and provide for smart risk management? Supply chains will need to process information at all levels and from multiple sources. Data centralization can be the solution to accomplishing this. A unified data architecture improves visibility throughout the global supply chain and reduces manual touches in operations to lower the risks of processing missteps and human error.
Resilience is driven by data consolidation and robust, integrated digital infrastructure, fostered by supply chain openness and connection. For this reason, investing in advanced digital solutions for data centralization and automation should be at the top of the list for firms looking to maintain global growth.
Supply chain visibility tools are also crucial to ensuring proactive supply chain change without disruption. They can assist businesses in streamlining procedures, tracking shipments and transactions in real time, seeing historical data, and identifying supply chain gaps.
Finally, data centralization software assists businesses in improving supplier relationships, increasing on-time delivery rates, lowering operational and personnel costs, automating procedures, and improving cooperation and communication throughout the supply chain.
Data management in supply chain
Why is there such an emphasis on supply chain data management? Because today’s information-driven global supply networks rely heavily on data. Companies that fail to collect and manage supply chain data effectively are unable to make smart decisions today, let alone maximize supply chain performance for the future!
It is the quality of data, not the quantity, that is important. On average, 47% of freshly produced data records have at least one major inaccuracy. That’s why tools for obtaining and sorting quality data are needed.
Data quality is in worse shape than most managers realize
Percentage of departments
Number of correct data records (out of 100)
Source: TADHG Nagle ET Al.
An essential step for supply chain leaders is to develop a set of best-in-class processes and tools for defining and managing data, identifying meaningful patterns, and generating critical insights into the performance of their enterprise supply chains.
Data supply chains: key challenges
For decades, corporations have struggled with data management. Almost all businesses invest seriously in data management, but many are dissatisfied with the outcomes.
While the problem does not appear to be getting worse, it is becoming more serious as managers and businesses attempt to become more data-driven, employ sophisticated analytics and artificial intelligence tools, and learn how to manage the data from a supply chain resilience perspective.
Technical challenges
Companies often focus on data management technological skills which require IT resources to gather, store, and transport data. Building data infrastructure is not easy, however, deploying SaaS solutions and platforms with diverse integration capabilities, including APIs and EDI can simplify this complex task.
Lack of a common data language
Data is delicate and nuanced, and it can be interpreted differently across disparate settings. Exacerbating this problem, certain departments may be hesitant to release their data since they own it; or, even if they are eager to contribute, they may not have the time to explain the details so that others may utilize it efficiently. As a result, other departments build unnecessary databases, further complicating matters and developing multiple supply chain records.
The disparity of data sources
Data is usually developed in diverse silos to suit the needs of individual departments. It is not for eventual use in data products, business practices, or processes in other groups. In contrast, consider a product like a vehicle, where components like the chassis and starter are developed with a single, tangible result in mind.
Data supply chain management, with valuable datasets as core components, may assist in addressing these difficulties. It places equal focus on all aspects of data management, from data collection to data organization and consumption. It is a method that considers the advantages of common data with those of specific and customized data and applies to both internal and external data sources. Firms looking to optimize their global supply chains use data management as a competitive advantage.
Supply chain data software: where action meets data
According to a recent S&P Global survey, 65% of survey respondents said data is more vital to their work today than it was in the previous 24 months. Meanwhile, 71% of respondents said it will become more important to their organization’s decision-making in the coming year.
A transparent, well-integrated supply chain keeps organizations up to date on current processes and aids in the identification of problem areas before they spiral out of control. An advanced supply chain visibility software solution provides all supply chain stakeholders with a clear and transparent view of approved operations, transactions, and shipments.
Proper supply chain management systems provide end-to-end visibility into every transaction and shipment—regardless of origin, destination, or carrier. Connecting through numerous APIs, EDIs, and other proven integration tools, they own, manage, and protect the supply chain data. Speaking of data, it is gathered and extracted by merging and expanding existing ERP, WMS, and TMS systems and is later aligned with information from suppliers, manufacturers, 3PLs, and other stakeholders, enabling a single version of the truth across the whole supply chain. As a result, the system enables the improvement of supply lead times, cost reduction, and real-time exception management.
What features should a supply chain data platform include?
The use of a supply chain data management platform can improve supply chain visibility dramatically. Existing data warehouses and platforms serve as the cornerstone for technological advancement. Operating systems, cloud infrastructure, relational databases, security, and integration architecture are the foundations that enable supply chain digitization, scalability, and flexibility.
Visibility platforms provide a central point for forecasting freight spend, monitoring performance, and analyzing data streams collected from partners, sensors, apps, and public data feeds. The Agisitx infrastructure automates & correlates data streams, thereby eliminating the need for users to log in to multiple websites or manage daily email reports to monitor supply chain activity
These platforms also offer data management features and the ability to monitor and analyze different data streams, informing stakeholders of events and status changes, issuing alerts, and enabling predictive decision-making — in addition to serving as a central connecting point for data sources and applications.
Shipment tracking
Real-time shipment updates are required regardless of mode. If your carrier’s equipment, for example, can monitor temperature, the visibility platform should be able to track chilled freight and provide temperature information and warnings.
Even if the data is valid, it can quickly get stale. Access to real-time data is required to eliminate manual checks and balances.
Wide-range integration
A real-time visibility solution improves operational excellence after your platform is embedded in your digital supply chain. Such deep integration is only achievable if a system supports the vast majority of current data interfaces, both new and old, EDI, XML, APIs, and others.
As data from your technology providers and platforms clashes with the information of carriers and third parties, the need for analytical tools is more important than ever. Look for a real-time visibility solution that interacts with your present technology stack to better your business outcomes.
Data analytics
Data becomes increasingly valuable when it is both understandable and actionable. Predictive analytics enables businesses to get the most out of their data. Each metric can be broken down by location, channel, customer, supplier, and carrier. Most significantly, metrics can then be customized so that the organization can be laser-focused on the most critical KPIs for their business.
Supply chain centralization and a robust integration layer can empower companies to leverage data science to gain insights into predictive ETAs, route and/or cost optimization across the entire network. While many companies do a serviceable job ‘marketing’ real-time capabilities, industry fragmentation and primitive data sources require a more pragmatic approach. Data curation and high-fidelity data are critical to transforming data into actionable information.
Automatic alerts
Disruptions in the global supply chain are inevitable. Though certain incidents cannot be avoided, supply chain visibility systems can provide tangible outcomes through proactive exception management.
When real-time visibility is paired with predictive analytics, it provides substantially greater insight into developing threats. With access to configurable email, SMS, and push alerts, internal and external teams can handle exceptions more proactively.
If a business wants a broad view of its supply chain and to have an actionable grasp of what is occurring at each phase rather than merely following the movement of specific outbound shipments, a visibility platform with automatic alerts will deliver a strong return on investment.
Reaching supply chain resilience with Agistix
Agistix can assist in tackling modern supply chain challenges through data centralization software. Their key advantage is a seamless integration that requires no change to regular business processes. Implementation is stress-free and results can be seen in as soon as 4 weeks:
- Reduced costs (incl. labor)
- Automated operations
- End-to-end visibility into any transaction and shipment
- Improved order fulfillment and inventory
Agistix understands the pain points of today’s supply chain. With extensive technology expertise, decades of industry experience, and a collaborative approach their visibility platform can be deployed quickly, without disrupting operations or IT resources. The Agistix platform is architected to support the evolving data schemas and data exchange requirements with any partner and to be systematically implemented without breaking the bank.
