Human management

Infor makes five predictions for supply chain management in 2022

Amel Gardner, vice president of Infor Middle East and Africa, explains how 2021 has been a crazy year for supply chain professionals

The supply chain has received a ton of media coverage for reasons as diverse as a ship blocking the Suez Canal to a shortage of chips for automakers. A world of people who had no idea what a supply chain was at the start of the year now have a much better understanding of how the goods they buy get from place to place. other.

The reality remains that many of the transportation challenges manufacturers face in 2021 are not going away. Be ready for plenty of supply chain news in 2022, including these important trends.

Supply shortages will continue to keep shipping container rates high
As long as several global economies continue to thrive, demand for goods and services will continue to keep transport prices, especially maritime, at record levels. However, with inflation emerging in various parts of the world, higher prices on products can cause consumption to slow down, allowing manufacturers and their suppliers some leeway to restock their supplies.

That said, the current demand backlog will keep shipping rates higher until the bottlenecks disappear. As supply and demand begin to balance in the second half of 2022, transport prices are expected to decline by 2023.

Sustainable development initiatives will not be equal at all levels
Even if heads of state come to an agreement on sustainability requirements, much of the onus will be on individual companies to enforce those standards on their own. While many organizations have already expressed, and even implemented, plans to reduce or eliminate carbon emissions, many have yet to adopt a strategy to have both immediate and long-term impacts.

Without a unified and standardized pact that holds both countries and businesses accountable, minimal changes will be made. Until such standardization exists, consumers and investors are most likely to force companies to make the necessary changes, as younger, more environmentally conscious generations continue to become the biggest base. of global consumers.

Organizations will bring their supply chains closer to the destination
With supply shortages ranging from groceries to semiconductors, many organizations have been forced to consider ways to bring crucial components closer to the final production process to ensure history does not repeat itself. With many global organizations seeking to locate more of their supplier base, supply chains will find themselves better equipped to handle large spikes in demand as they occur.

Safety stock levels will increase to avoid delays and closures
With the global vaccination effort moving at a slower pace than expected, new variants of the COVID-19 virus will continue to cause caution and hesitation regarding travel and the full reopening of businesses. As a result, organizations will move away from just-in-time (JIT) inventory strategies and increase inventory levels, in order to avoid production disruptions.

It also allows organizations to use supply chain finance tools to extend payment terms to suppliers using innovative financing options with lenders. Organizations can develop inventory strategies that are less susceptible to disruption while still allowing their supplier partners to maintain healthy capital levels.

Companies will continue to invest in new technologies to streamline processes
Organizations will have to do more with less as talent shortages affecting global supply chains continue to worsen. Businesses will need to embrace existing and emerging technologies that enable cleaner data, closer collaboration, and automation of mundane processes so team members can focus on improving supply chain processes. .

This means accelerating the digital transformation already underway and moving entire systems to the cloud for better but secure access to the critical data needed to implement decisions quickly and efficiently.

The pandemic has pushed many businesses much further into their digital transformation much earlier than expected, and the timeline will continue to shrink as businesses now realize how critical cloud technology has become to staying afloat.