The world of people who didn’t know what the supply chain was earlier this year has a much better understanding of how purchased goods move from one place to another. The reality remains that many of the transportation problems facing manufacturers in 2021 have not been resolved. Here are five forecasts for supply chain management in 2022.
Undersupply will keep container prices high
As long as some global economies continue to thrive, demand for goods and services will continue to maintain record levels, especially sea freight rates. However, with inflation emerging in different parts of the world, higher product prices can lead to a slowdown in consumers, leaving manufacturers and their suppliers to replenish their supplies. That said, the existing demand backlog will keep sea transport rates high until the bottleneck disappears. When supply and demand begin to balance in the second half of 2022, shipping charges should be lower towards 2023.
Sustainability initiatives are not totally equal
Even if the Head of State reaches an agreement on sustainability requirements, it is largely up to individual companies to apply these standards to themselves. Many organizations have already announced and even implemented plans to reduce or eliminate carbon emissions, but many have not yet adopted strategies for both immediate and long-term impact. Without a unified standardized agreement that holds both the state and the enterprise responsible, minimal changes would be made. Until such standardization exists, consumers and investors are most likely to force businesses to make the necessary shifts as young, environmentally friendly generations continue to grow into the world’s largest consumer base. ..
Organizations will bring the supply chain closer to their destination
Supply shortages, from groceries to semiconductors, have forced many organizations to consider ways to bring key components closer to the final production process so that history does not repeat itself. With many global organizations trying to localize most of their supplier base, the supply chain is ready to handle the massive surge in demand that has occurred.
Increased safety stock level to avoid backlog and shutdown
As global vaccination efforts are progressing at a slower pace than expected, new variants of the Covid-19 virus continue to cause caution and hesitation regarding travel and fully reopening businesses. As a result, organizations move away from just-in-time (JIT) inventory strategies and raise inventory levels, avoiding production interruptions. This also allows organizations to use supply chain finance tools to extend payment terms to suppliers with innovative financing options with lenders. Organizations can build inventory strategies that are less susceptible to disruption while allowing supply partners to maintain sound capital levels.
Companies continue to invest in new technologies to streamline processes
As the shortage of talent that impacts the global supply chain continues to worsen, organizations need to do more with less effort. To help team members focus on improving supply chain processes, companies need to adopt existing and new technologies that enable cleaner data, stronger collaboration, and automation of routine processes. This facilitates the digital transformation that is already underway, migrating the entire system to the cloud and providing better and more secure access to the critical data needed to implement decisions quickly and effectively. It means to realize.
Due to the pandemic, many companies have entered digital transformation much earlier than originally planned. Timelines continue to shrink as companies recognize how important cloud technology has become to keep ups and downs.
Amel Gardner is Vice President of Infor Middle East and Africa.
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