In a shift from the short-term focus that dominated from 2020 to 2022, 2024 heralds a new era of strategic supply chain design. Organizations, emerging from pandemic-driven turbulence, are ready to embrace long-term resilience and efficiency in their supply chains.
Here are six predictions shaping the landscape of strategic supply chain design in 2024:
- Transition to Strategic Thinking:
- Companies, having navigated the logistical challenges of 2023, are poised to engage in strategic assessments, emphasizing long-term supply chain resilience. Gartner’s 2023 survey indicates a significant deployment of advanced analytics in end-to-end network modeling.
- End of Unlimited Cheap Suppliers:
- Deteriorating U.S.-China relations and challenges in the Chinese economy prompt companies to reassess their dependence on China as the primary manufacturing link. A Gartner study notes a significant shift, with 52% of industrials in China diversifying their sourcing or production locations to de-risk their supply chains.
- Demand for Vendor Transparency:
- Customers increasingly seek transparency beyond product functionalities, emphasizing the importance of understanding the teams behind technologies. Vendor selection now involves due diligence on factors such as mission, culture, and the expertise of individuals.
- AI Exhaustion and a Return to Traditional Evaluation:
- Companies demand tangible proof of AI capabilities, moving away from accepting mere claims of being AI-enabled. The focus shifts to short-term planning decisions, where AI’s “autopilot” approach is most effective in stable conditions.
- Digital Twin Skepticism:
- Skepticism arises regarding the term “digital twin” as a marketing creation. Companies recognize that digital twins are not exact matches but rather representations in a database. Discerning organizations create digital twins for various future-state supply chain alternatives, analyzing them for optimal implementation.
- Market Turmoil and Emergence of New Leaders:
- The industry, which saw a peak in 2021 with substantial venture capital investments, faces market turbulence. Predictions include down-rounds, reassessment of strategies, and the emergence of new leaders as the sector undergoes transformation.
As businesses prepare for a continuous state of supply chain disruption, the emphasis is on building agile and resilient supply chains. By gaining visibility, proactively mitigating threats, and correcting deviations in real-time, organizations can navigate uncertainties and challenges effectively.
