This commentary appeared in the print edition of the Jan. 6, 2020, Journal of Commerce Annual Review and Outlook.
Note to all supply chain leaders and teams: GET READY FOR A WILD AND CRAZY YEAR! The significance of several global and local factors is such that all supply chains — whether global, regional, or local — will have to change.
For last January’s commentary, I discussed the amazing growth and impacts of e-commerce on supply chains. This mega-trend is of course continuing without any letting up. But much more is also causing unprecedented disruptions and reinventions of supply chains.
In addition to digital commerce, the top five factors seem to be:
Trade agreements are being renegotiated, which causes origins and destinations to change more than expected and tariffs to be adjusted.
The movement for sustainability affects not only products but also supply chains.
The circular economy needs to be planned and implemented carefully.
In-depth visibility — a long-time goal — is being driven more than ever by governments and security.
Technology — both for facility automation and for decision-making — is advancing faster than ever, with artificial intelligence, advanced analytics, and robotics leading the trend.
In recent surveys, 58 percent of business leaders stated that trade agreements are the greatest driver for the US economy, and that these pacts are also the greatest risk. Thus, supply chain leaders will be called upon not only to change their origins and destinations, but also to guard against risk. For many, this will mean diversity in partners, to reduce reliance on a few.
How supply chain leaders in all industries deal with these major factors will determine how their respective companies perform. The six major trends will place enormous pressure on all industries, regardless of the freight volumes. Much will require capital-intensive investments, for global, regional, and local supply chains, which is always limited. Shippers will need strong talents to decide what to do; service providers will need strong talents to decide how to help their customers do it.