From natural disasters to political upheavals and regional wars, global events continue to disrupt the flow of goods and services. There will be significant challenges in 2024 for both businesses and consumers.
Companies need to create contingency plans to protect themselves from the effects of supply chain disruptions. Logistics planning includes identifying the weak areas and focusing on the likely risks and how to mitigate them.
Key challenges
Geo-political unrest and wars
Some countries in Europe and the Middle East are revisiting their trading relationships due to the ongoing uncertainty. Many are having to review their tariffs and are repositioning themselves in the global market. A problem area is the current unrest in the Red Sea where cargo ships are having to be diverted around the Cape of Good Hope incurring additional costs and adding 10 days to the journey.
Environmental
The increasing frequency and intensity of natural disasters, whether caused by climate change or not, will cause delays and losses. Wildfires, hurricanes, and volcanic eruptions can severely damage infrastructure, and disrupt transportation networks and warehouse operations. More environmental laws are being implemented causing businesses to comply with new rules.
Technology and digitisation
Digital solutions in supply chain are no longer just nice to have. Companies need to embrace new technologies to be able to respond to the impact of global events and stay competitive. Cyber threats are a reality and must be addressed.
How to respond to the challenges
Develop contingency plans.
Some disruptions are more predictable than others. Perform risk assessments to identify both internal and external vulnerabilities and develop scenarios. More robust contingency plans help take the stress out of seasonal weather events and staffing challenges.
Resilience and agility
Adapting to face global events requires agility and a proactive approach. Supply chain managers need to closely monitor geopolitical developments and diversify their supplier base.
Rising costs
When costs in the supply chain rise, inflation increases causing prices to rise, producing a vicious cycle. Inflation forecasting is one of the elements in risk assessment and can highlight possible changes in demand.
Technology and digitisation
There will be an acceleration in technological advancements and digital transformation initiatives in 2024. Technologies such as artificial intelligence, blockchain, and the Internet of Things (IoT) help optimise supply chain processes. Cloud-based software solutions enhance efficiency, transparency, and end-to-end visibility. The automation of processes from order placement to inventory management can help reduce manual errors and accelerate operations.
Sustainability
Sustainability is becoming a key element in any strategic approach to mitigating supply risks. These may be environmental, social or governmental (ESG) such as controlling carbon emissions, eliminating waste, managing scarce resources, or compliance with regulatory changes.
Developing partnerships
Collaboration across supply chain partners, including suppliers, logistics providers, and customers, will be essential to share information, mitigate risks, and develop proactive strategies to respond to global events. Developing partnerships with key suppliers that align with your sustainability and technology objectives will deliver benefits and become the foundation of a resilient and efficient supply chain.
What is most important?
By engaging with technology, embracing sustainability, and fostering collaboration, you can position yourselves to thrive in an increasingly dynamic and interconnected global market.
Prepare for disruptions by adapting contingency plans, developing resilience, and applying new technologies.
Call to action
Working with the right logistics partner can help ease some of these pain points. Integrating new technologies with existing systems and processes can be challenging and may require substantial time and effort. SCCG can help your business in terms of the logistics to warehouse operations. Contact us at +44(0)1926 430 883 or info@sccgltd.com.
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