From A to B2B: Logistics Trends in 2021 (Part III)
This series of articles outlines some important trends to keep an eye on in logistics, and how technological innovations underpin this complexity. Green logistics and circular supply chains were the focus of part one, while part two looked at the Amazon effect. Part three is focused on resilience, redundancy and scenarios where plan A fails.
Resilience, redundancy, and plans B through Z
The business case for resilience has been proven, but for meaningful prediction, fast and accurate information is key. The above-mentioned investment in sensor technology and automated responsive devices will also serve as oracles for unexpected shifts, such as extreme weather events, which could have more significant disruptive effects in distant locations.
Creating resilient supply chain forecasting will lead to actual scoping and implementation of backup solutions, as well as simply modeling them. Because of the range of third-party logistics providers now available, supply-chain managers will be able to price-in a degree of redundancy and duplication, as insurance against future disruption. Consumer tolerance of delayed deliveries or out-of-stock items will decline to the point that it simply makes more sense, in risk terms, to have plan B on tap ready to go.
As a logical extension of this, some manufacturers are considering on or near-shoring options, to avoid the disruptions to inventory they experienced in 2020. With political stand-offs between the US and China, in particular, causing real concerns about trade wars and blockades, alternatives are being considered by the tech industry and others.
This will mean greater efficiencies being driven in in process design and speed, to offset higher labor and warehousing costs. But at the same time, this will support leaner inventories, creating more just-in-time potential than ever. While this is underpinned by innovations in manufacture like 3D printing and reduced environmental costs by reducing product miles overall, short supply lines do have vulnerabilities – and small disruptions can have a big impact.
A truly global future?
While near-shoring and responses to localized constraints suggest a fragmentation of the global supply chain, it is important to conclude with some unifying factors, emerging from the Coronavirus pandemic.
Not only is there a growing awareness that events on the other side of the world can directly impact how we live in ways we’d never have expected, but there is also some coordinated action emerging to address the greatest risks.
While politicians argue about patents and risks, the biggest worldwide logistics operation is underway as we speak, getting vaccines and medical supplies distributed, as well as the raw materials and components required for their manufacture. Oxygen and respirators are being airlifted from Europe to Asia, delicate mRNA serums are being shipped across continents under extreme temperature control, and 3D-printed facemasks are being locally distributed in distant villages.
The logistics industry is fundamental in responding to the dawning awareness that none of us are safely out of this until we all are. And while digital goods and services have been a lifeline during lockdowns, medical and pharmaceutical supplies still depend on physical distribution.
For this reason, we all need to keep a close eye on important trends in logistics and supply-chain issues worldwide.
About the Authors:
Ben Beeching is a marketing professional at enterprise architecture leaders MEGA International. Ben has worked in the technology industry for over 15 years. As a market research veteran and founder of NYC-based B2B market research consultancy firm, Adience, Chris Wells has worked with dozens of companies over the years.