Any predictions we make now about what will happen in global supply chains in 2021 can only be our best guess; we are still in a period of rapid change. There is no doubt that supply chains will have to continue to be adaptable and responsive to further economic, financial, and social upheavals. Here are our trends to watch in 2021 with each one impacted by at least one other.

1. Disruption of global supply chains will continue

Although organisations are beginning to recover, they continue to reconsider their options for business survival in the medium-long term. Agility and resilience were the two main watchwords in 2020 and are still very relevant. Supply chain managers must continue to build flexibility into their operations to absorb disruptions as they occur. This is achieved by developing scenarios (from best to worst) and having plans to mitigate each one. In 2021, companies will work with a wider range of suppliers and there will be a shift towards sustainability and a speedier take up of technology solutions.

2. E-commerce and customer expectations

The boom in online shopping has been fuelled by the pandemic but it was already growing before 2020. This development has forced companies to be innovative and create e-commerce solutions that support this trend. This involves streamlining last-mile deliveries and offering click-and-collect and returns facilities. For supply chains, this means securing capacity and building relationships with 3PL logistics and courier companies to handle such demanding customer requirements.

3. Greater take-up of new supply chain technologies

Many companies are enjoying various levels of success through adopting automated solutions across supply chain functions. The main benefit is to improve visibility across the entire supply chain through information sharing and big data management. For example, the IoT is being widely used across different industries to improve efficiency and speed up internal processes by using sensors and performing real-time tracking. AI solutions are being used to manage big data analytics projects which are creating a competitive advantage for early adopters.

4. Sustainability is no longer nice-to-have

Embracing sustainability goals has now become a necessity to ensure business continuity. Companies are realising that environmental, social, and corporate governance (ESG) performance impacts financial results. Supply chains can make a substantial contribution to deliver on corporate ESG goals in many areas including reducing pollution, eliminating waste and contributing to improving the quality of life. Responding to pressure from regulators and compliance bodies without considering the needs of their employees and their customers will not be enough.

5. A greater focus on reducing supplier risk

Security of supply is paramount, measures must be put into place to avoid stock-outs, supplier failures, late deliveries, and quality issues. We must protect our networks, devices, people and programs from cyber-attacks.

No longer a back-room function, supply chain management is front and centre in ensuring continuity of a business. Focusing on risk prevention will enable companies to mitigate adverse events in their supply chain faster than the competition.

6. Supplier diversity and expanding sourcing options

Supplier diversity will be a hot topic in 2021. Diversifying also means buying local or near-sourcing to avoid inventory disruptions and to reduce warehousing and transport costs. Outsourcing to specialists is likely to continue to allow companies to focus on their core business and limit their risk.

Success will come from relationships based on mutually agreed policies, processes, metrics that provide the framework. Technology tools will help with this by providing the required transparency and visibility that builds trust and drives innovation.

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