Supply Chain Developments and Trends for 2022

For the last two years, businesses have been facing problems caused by the disproportion between the supply and demand of products offered in global markets; domestic and global production has been halted, logistics has become more difficult, inventory problems and various related crises. Along with the crises, the functional involvement of the logistics and transportation sector led to the necessity of developing different solutions in operational functioning.

Companies determining the direction of their new operations are trying to analyze the effects of the global pandemic period on the supply chain, predict the possible costs that may occur during potential pandemic periods, and thus create arrangements in their plans for 2022 and the following years. Therefore, 2022 will actually be a kind of test year for organizations on the supply chain. For retailers, logistics companies and B2B organizations that follow international news and current developments on logistics and supply chain issues and take action accordingly while shaping their operations, 2022 trends are of critical importance. Those who learn from the results and prepare for the coming years with more rational strategic plans by closely following the trends will have the opportunity to hold on and get ahead of the competition in 2022 and in the next few years.

Disruptions in the supply chain during times of disaster can result in disruptions in the global circulation of all basic needs, from medical supplies and food to fast-moving consumer goods. The Covid19 pandemic, which has been on the world’s agenda in recent years, has disrupted markets in supply chain as in many other issues. Throughout 2020, global production slowed down due to the pandemic and the resulting lockdown. This caused international panic and led to serious disruptions and problems in operations. Domestic and global production came to a standstill in many sectors. This caused consumers to stockpile trillions of dollars of inventory and caused a sudden disruption in the balance between demand and supply. When demand grew faster than supply, manufacturers and retailers struggled to keep up. All of these issues have led to major challenges not only for retail and B2B businesses, but for everyone affected by the supply chain, from end-users to governments.

While Covid19 was the main, but not the only cause of significant changes and crises. Covid-19 paved the way for technological advancements and accelerated the rise of e-commerce. Thus, the increasing digitization of the industry and the ongoing US-China trade dispute have put and continue to put stress on the international flow of goods. Russia, the world’s largest wheat exporter, and Ukraine, the second largest exporter, share almost 29% of the global market. Given that they also share major suppliers of metals and other commodities, a potential war between them is likely to spike prices of wheat and wheat products, as well as oil and gas, with repercussions for other markets. Add the Ukraine-Russia tensions to the agenda, and it can be said that the global supply chain picture will not be all rosy in 2022. Therefore, there are a number of factors affecting the supply chain

Uncertainties in the economy and supply chain issues are the main reasons for the recent general unease in businesses. According to a study conducted on behalf of Blue Yonder, 37% of 250 supply chain decision-makers in the UK are concerned about the long-term effects of the COVID-19 pandemic on the supply chain and are unsure what the future holds. In addition to uncertainties, the despair of those in the system also plays a role in the tension in the markets. In times of disasters such as epidemics, earthquakes, etc., the psychological attitudes and approaches are highly influential on the functioning of businesses trying to maintain core operations, as they will be reflected in the managerial decisions they make. When all these effects are considered cumulatively, it is critical for supply chain leaders and decision-makers globally to increase their problem-solving resilience and flexibility during disaster periods and post-disaster processes, and for businesses to prepare their crisis plans in advance. In this sense, leaders need to improve their tolerance for uncertainty, accept the problem and increase their ability to plan for a solution.

In order to prepare a successful plan, a road map and appropriate steps should be considered in line with trends, taking into account what has happened in previous periods. To avoid being overwhelmed by today’s supply chain problems, organizations need to develop rational strategic planning, keep the flow of communication with target audience groups continuous and fluid, respond quickly to customers, and increase awareness and satisfaction. To optimize this, artificial intelligence and digital technology solutions should be leveraged, the supply chain should be equipped with real-time, end-to-end hardware, and a robust infrastructure should be worked on to ensure a return to normalcy after the crisis period. According to research analysis, 86% of the 250 British organizations that are decision makers in the supply chain area have invested in technology, developed new skills for trade, and 60% have revamped their supply chain strategies.

In the second year of the pandemic, with the rapid rise of e-commerce and solutions such as reduced restrictions and the transition to hybrid working processes, pre-pandemic levels have been approached in many countries. Trying to cope with concerns and uncertainties about the near future, businesses have started to look for ways to reduce logistics costs while ensuring efficiency in supply chain activities with the goal of customer satisfaction. In this sense, with the increase in e-commerce, the satisfaction of the consumer in the process of receiving the product has gained importance. We can list the main supply chain trends of 2022, which have gained importance in all this change process, as follows:

By leveraging digital technologies, organizations aim to penetrate every link of the value chain they create in the execution of their workflow. At this point, digitalization enables increased visibility in real time. While many businesses are expanding their business capacity by taking advantage of the opportunities of digital transformation, those who have not yet grasped the importance of this yet have started integration processes by understanding the value of digital transformation infrastructure during the pandemic period. Since the digital systematization of the supply process is so important that it will determine the commercial life of businesses, in 2022 and beyond, businesses that resist this change will be left behind in the competition. By investing in a supply chain optimization platform, integrated use of advanced supply chain technology for supply chains provides maximum benefit to businesses. By eliminating or minimizing the errors that prevent cementing relationships with suppliers, businesses can break down communication barriers. Regardless of the scale, improving communication with suppliers with a server service and management system that meets the needs of the business, in accordance with the workforce, greatly accelerates the supply chain communication processes of the business and brings employees to work more harmoniously. Digital transformation investments also contribute to strengthening the business’s commercial relations, thus increasing corporate reputation and also gaining success in global markets with a standardized data exchange.

Cargo arriving by sea needs to be unloaded onto trucks at the port and transportation needs to continue overland to the cities. However, inadequate resources in the capacity of trucks and truck drivers means that goods remain at the port and raw materials do not reach producers, commodities are not received by businesses, so they are not recorded in inventory records and cannot be sold, various business operations are disrupted and trade is paralyzed. Therefore, it is critical for the flow of trade to invest in specific solutions for the shortage of trucks and drivers in the transportation system, and to come up with solutions to increase the motivation of drivers so that they are encouraged to work harder and not quit their jobs.

Document processes, which are the most challenging, tedious and time-consuming part of e-commerce, can be easily and automatically executed from a single platform with an integration system suitable for the workforce. Thus, by automating the routine workload, time and energy can be saved, labor savings can be achieved and human errors can be avoided. Automation streamlines the flow of communication in the supply chain and provides a standardized process that can be carried out as if speaking a single common language, regardless of the type or sector. Integration solutions that enable the automation process to be integrated with the records where inventory details are processed and return acceptance records, and to communicate quickly with the customer and turn to the operation, increase this flow and internal functioning and bring stability.

Businesses that aim to reach the consumer at a speed above the average speed in the transportation of orders benefit from transportation from multiple locations to shorten the delivery time. Transportation with localized operations in order delivery will be beneficial in creating customer satisfaction as it will meet the consumer’s expectation of fast delivery. Localization of the supply chain is a highly functional trend, both to provide fast transportation and to keep its cost within normal limits. The hyper-delivery option can be explained as same-day delivery support, and with the provision of this service, it contributes greatly to the conversion of potential customers into existing customers and existing customers into loyal customers. Localization of the supply chain plays an important role in customer satisfaction and growth, as it makes it possible to offer a hyper-delivery option.

The shipping industry is a powerful pillar of the supply chain, with ships transporting hundreds of thousands of container loads of commodities around the world every day. Shipping lines collaborate with logistics companies to transport 90% of the world’s trade, which is almost all of it. In this sense, transportation and distribution are vital in the supply chain. Tailored solutions, such as creating a drive hub for delivery from multiple stores or shipping areas in the same geographical area, provide logistical conveniences and open the doors to sustainable trade in the long term. In addition, in the conduct of trade, it is aimed to achieve as high customer satisfaction as possible in processes such as the sale of a good as well as after-sales delivery and return. An important factor in ensuring customer satisfaction is the delivery of the product sold in e-commerce and its fast and smooth delivery. By crowdsourcing delivery and using multiple logistics partners, it can be easier to ensure consumer satisfaction, reduce costs, improve the supply process, and achieve success in the multi-fleet method. If the consumer does not receive the product within the required time period in return for shopping to fulfill their needs, they may abandon the purchase. Therefore, establishing solution partnerships for different logistics alternatives and eliminating potential problems are among today’s trends in rationally managing the processes of deliveries.

Those who show ecological sensitivity and organize their transportation activities according to this approach will both reduce costs and reduce greenhouse gas emissions by being profitable in the long term, even if they allocate a budget for some investments in the short term. In addition to businesses that organize their logistics activities with new energy management systems, supply chain leaders will also gain a reputation as less environmentally damaging by presenting a sustainable vision and will be preferred in this sense. In the near future, sustainability will be one of the top reasons for organizations to be preferred in the supply chain, with the circular economy replacing the linear economy. Various countries are considering sanctions that provide advantages to businesses with sustainability actions in the international trade chain, while others may eventually fall behind in the competition. In this sense, businesses and supply chain managers who implement holistic sustainability policies by changing their logistics plans and the way they use energy resources will reap the fruits of their investments in the near future.

Investing in AI and machine learning lays the groundwork for the applicability of all trends, and in this case is a crucial advantage to stand out from competitors. Of course, how the entire digital infrastructure and the strategic planning that crowns it will be applied more wisely and how the results will be reflected in the list of supply chain leaders of 2022.