Supply chain profession’s toughest year ever?

Supply chain management may be the toughest it has ever been in 2024. For some time, change has been the only constant in supply chains. It looks like this volatility is set to continue, fuelled by geopolitical tensions, climate crises, and economic instability.

With the following trends shaping supply chains in 2024, SAPICS (The Professional Body for Supply Chain Management) president MJ Schoemaker says that they should be on the agendas of all savvy supply chain practitioners:

Risk Management

Risk management and supply chain resilience will be prioritised in 2024. The diversification of suppliers, production capabilities, and transportation processes will be some of the key strategies. Alternative materials and non-traditional partnerships will be explored, while many supply chains will become more compact and localised. Resilient supply chain design will be critical to mitigating disruptive events faster than the competition, providing excellent customer service, and generating value and market share.

Schoemaker says that in South Africa, the electricity crisis, looming water crisis, and decaying infrastructure will exacerbate supply chain challenges and uncertainty. “South African businesses will become increasingly self-sufficient when it comes to electricity, with most organisations investing in alternative energy sources like solar and also implementing water back-up solutions. The cost of managing this is high and will roll over to the consumer at some point,” she elaborates.

Digitisation

Schoemaker believes that the future of supply chain is innovative and real time, via digitisation. “Digitised supply chains enable unprecedented visibility across the network. Digital technologies can alleviate the uncertainty and help supply chain professionals to predict, plan for, and protect their businesses against disruptions. Digitisation has been a supply chain priority for some years. In 2024, supply chain leaders will accelerate their investment in applications that support artificial intelligence and advanced analytics capabilities,” she predicts.

Artificial Intelligence

Artificial intelligence (AI) is already proving to be an extremely useful tool for supply chain managers. It is being used successfully in a range of practical applications in the supply chain, including demand forecasting; risk, inventory, and quality management; and transport and distribution optimisation. Schoemaker notes that AI is advancing at an unprecedented rate and says that we will see it used in many more supply chain applications this year. 

Big Data and Analytics

Data is vital to optimise supply chains and is more important than ever in the current uncertain and disruption-laden business environment. Through supply chain big data and analytics, organisations can identify inefficiencies. Data integration and analytics, as well as key metrics across the supply chain, will enable the early identification of both potential disruptions and opportunities. “To maximise the potential of big data and analytics, supply chain professionals must prioritise data exchange and information-sharing,” stresses Schoemaker. 

Environmental, Social, and Governance (ESG)

In 2024, supply chains will be more human-centric and sustainable, Schoemaker says. ESG considerations have become integral to supply chain management, and as stakeholders demand greater transparency and accountability, integrating ESG factors into supply chain strategies has become imperative to thrive in a socially conscious marketplace.

Skills Development

Supply chain management is a constantly changing and evolving profession, with the rapid introduction of new technologies. “Businesses are struggling to find people with the required skillsets. Educating and upskilling supply chain professionals is key to ensuring that all investments in innovation have a return on investment. Areas like planning, risk management, sustainability, and the basics of supply chain – especially in the health sector – are crucial,” Schoemaker emphasises.

Recognising this, SAPICS has dedicated sessions at this year’s annual SAPICS Conference to global health supply chain challenges. The conference takes place in Cape Town in June and will be held in association with the Southern African Association of Freight Forwarders (SAAFF). “The panel discussions, presentations, workshops, and networking opportunities will help hattendees to learn from one another and lead to collaborations that will benefit the supply chain workforce, health systems, and ultimately populations on the African continent,” Schoemaker concludes.