Supply chains can be said to form the backbone of any business. After all, it is difficult to conduct any business operation without having a reliable source of materials and the means to move those materials and finished goods to their destinations. Supply chains can also be dynamic and change over time. New trends constantly emerge and replace older ways of doing business. The following are two of the biggest trends propelling supply chain and logistics into the future.
Supply chain risk management is a current trend occurring in supply chains all over. It is the identification, monitoring, detection, and action taken against threats to a company’s supply chain. Supply chains can be susceptible to a number of events. They include natural disasters, price increases, material shortages, labor strikes, and the closure of suppliers due to insolvency.
Experts have several recommendations on how to effectively implement a supply chain risk management program to protect a supply chain. Automation in the form of software can be useful in collecting supplier data and organizing it into valuable information. You can then analyze that information to see how well suppliers are performing and whether they are meeting your needs or not. Data analysis can also help you spot potential problems that you can address ahead of time to mitigate disruption to the supply chain.
Another tip from supply chain experts is to integrate all parts of the supply chain into the supply chain risk management program. This includes contracts, purchasing, compliance, and spending. You want to have a full picture of everything involved in the supply chain and not just a few parts. Dashboards with real-time info on the supply chain is another great idea.
Another trend occurring in supply chains today is what is called the circular supply chain. This means that instead of simply discarding the end product, producers of products reuse those same products. One way that producers reuse the products is through recycling old products and creating new ones out of them. Another way of reusing products is trading old items such as smartphones in to get the newest one from the manufacturer.
Circular supply chains are being encouraged by the European Union and nations such as Japan. These governments believe that a circular supply chain has positive impacts on the environment and the economy. Consumers, too, are demanding a more circular supply chain for their products. They do not want to discard an item they purchased at the end of its life cycle. They want to recycle it or trade it in.
Circular supply chains create a loop in the supply chain instead of a linear line. They can also impact the flow of suppliers in the supply chain, especially if products or materials are reused or resold. Smart companies are using circular supply chains to create value and gain a positive image from the public in terms of environmental impact.