After the year we had in 2020, everyone had hoped that 2021 would be the year for supply chains to bounce back and return to normality. This hasn’t quite been the case, as supply chains across the world are still experiencing knock-on effects from the pandemic. Here are my predictions for supply chain trends in 2022:
Resilience
Disruptions to supply chains over the past year have varied in volume and impact, so it is important that supply chains can show resilience. However, one study shows that 60% of supply chain leaders say that their supply chains have been designed without taking resiliency into consideration, causing problems when disruptions hit. A study conducted by the World Economic Forum found that only 12% of global companies are protected against future supply chain problems from happening, with the majority needing to build resiliency.
Since the upcoming year is already filled with uncertainty, building this resilience is so important. Many businesses have recognized this, as a survey conducted by Gartner revealed that 87% of businesses were planning to invest in supply chain resiliency, including in 2022. It is clear that resilient supply chains are better equipped to deal with the uncertainties that the new year may bring.
Sustainability
In today’s supply chains, sustainability plays a big part in how companies operate, and like in 2021, this trend is set to continue, as firms set out their future environmental goals. As consumers emphasize the importance for sustainability, companies are encouraged to become more environmentally friendly.
In a global study conducted by independent research firm Verdantix, data revealed that 92% of companies are adapting their business strategy to become more sustainable and these companies also plan to increase investments into sustainability initiatives to improve environmental, social and governance (ESG) performance in 2022. This report found that on the whole, sustainability is becoming more democratized across businesses, as well as technology and innovation being commonly used as tools to achieve sustainability goals. An example of how companies are becoming more sustainable is the use of electric vehicles (EVs) in the automobile industry, as top vehicle producers are announcing ambitious plans for electrification.
The world is evolving into a circular economy, and the topic is being mentioned more frequently in the world of business. Sustainable fashion is a top way of reducing consumption, as the industry is moving towards creating sustainable clothing, made from upcycled materials or encouraging buying secondhand items to move away from the dreaded term of ‘fast fashion.’
It is clear to say that instead of being something that firms optionally incorporate into their operations, sustainability is becoming critical, and sustainable supply chains are on the rise to reflect this. Making sustainable options more affordable and accessible to consumers is key to making a difference, and businesses seem to be keen on changing their ways for the better.
Reshoring
In 2022, it is highly likely that companies will continue with the trend of reshoring and nearshoring, whether this takes place in terms of production or sourcing, it is a popular way to reduce transportation costs. Due to the fact that widespread travel restrictions and the inconveniences involved with travel during a pandemic are still occurring, businesses will continue to bring their operations closer to home. An example of this is the recent semiconductor shortage. Companies in Europe have decided to build chip plants in their own continent in order to reduce their dependency on Asia, who were badly hit with restrictions, which limited production, and due to backlogs in transportation, companies were unable to access the chips.
Leave a Reply