Supply Chain Trends to Watch

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Perspectives on what 2024 and beyond holds from industry experts in the front lines of supply chain

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Jonathan: Industries across the board are facing a multitude of challenging trends, which include competing capacity, supply chain disruptions, new technological developments, and more complexity in value chains. These challenges are forcing industry leaders to reconsider their operations strategy.

Many companies are crucially lacking visibility on the transactions, performance, and risks of their external network. As a result, they are working with stale, fractured data, which forces them to be more reactive than proactive and use lots of manual processes to fill the gaps. This decreases their operational efficiency, and exacerbates disconnects between the siloed functions.

Supply Chain Trends to Watch: "A focus on data to enable smarter and fully integrated value chains." -Jonathan De Keukelaere, Bluecrux Share on X

With the advancement of digital and analytical tools, entire industries are now starting to leverage the power of data to become more agile and resilient. Companies are realizing they need to connect to a digital collaborative network and to gain up- and down-stream visibility to their transactional data, and so they can monitor the performance and risks of their network.

This is a crucial aspect of our work in helping companies become more data driven in their supply chains, optimize their operations, and transform their supply chains into smart, efficient, fully integrated value chains.

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Jim: Supply chain leaders will spend 2024 and 2025 racing to redesign supply chains away from political turmoil and violent hot spots. But the resultant friendshoring, nearshoring, and even reshoring, must account for the entire end-to-end supply chain, not just final assembly.

And in a world of perpetual disruption, your organization will need optionality – multiple sourcing for key products, parts and raw materials. Recent missile attacks on shipping in the Red Sea and continued drought in the Panama Canal show how quickly disruption can shut down previously secure supply chains.

Optionality is the only way your enterprise can deliver through the next disruption. So I expect to see the optionality becoming a critical focus for companies in 2024 and the coming years.

“Optionality is the way forward in a world of perpetual disruption.”

Jim Tompkins

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Stacie: Many companies have invested to improve cross-functional access to data and the use of AI/ML in pockets, for example in demand forecasting. Recently, pragmatic use cases have been overshadowed by the potential of generative AI.

In 2024 and as we move into 2025, expect leaders to look to leverage AI to dynamically drive segmented incremental profitable growth.

What does this mean, why should you care, and how should this help shape risk-aware initiatives?  

Averages have long been used for directional, “rough cut” capacity planning. In stable environments, this made sense to reduce whiplash from noise. Analyses within business functions reflected siloed objectives. But averages rarely occur.

Operations reflect dynamic flows of inventory, demand, data, and cash. Companies will ingest more signals (internal, upstream, and downstream) in a learning environment with AI/ML as a co-pilot to better address business realities. This may be due to labor or supply shortages, shifting market preferences, geopolitical or inflationary pressures, or other network contingencies.

Supply Chain Trends to Watch: "Companies will ingest more signals from the up and downstream supply chain, in a learning environment, with AI as a co-pilot to better address business realities." -Stacie Immesberger Share on X

This requires new forms of architecture that collapse the historic divide between planning and execution, enabling finer adjustments in “slush” and “frozen” periods. Consider the historic data and process latency supporting new product launches.

To adapt and to truly leverage AI, solutions must bridge the need to align contextual data for directional planning, while scaling to consume transactional data to evaluate nearer-term risks. Thus, I think we’ll increasingly see a trend to address these issues with architecture organically built to support planning and execution, to consume and use transactional data more broadly, and to scale to support the requirements of today’s complex and high volume global supply chains.  

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Peter: While surface trends will undoubtedly continue to dominate the media space, businesses will be forced to confront the increasing digital supply chain network undertow.

Supply Chain Trends to Watch: "Regulations and mandates will drive companies to explore supply chain solutions that stretch more than one link up and one link down the supply chain." -Peter Nilsson Share on X

While most businesses have already embraced some type of multi-party collaboration tool, few are able to take full advantage of the enormous benefits that real multi-party/multi-tier networks provide. With the implementation of regulations such as DSCSA and FSMA 204, or new ESG and SCOPE 3 mandates, organizations will have to explore what they really need to combat uncertainty, volatility, and disruption in global supply chains.

Whether by serendipity, or a sudden epiphany, now is the time that organizations seriously start adopting supply chain solutions that stretch more than one link up and one link down.

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Greg: I think many companies are in for a rude awakening around their expectations for Generative AI as a cure-all for their supply chain woes.

There is no doubt that businesses have a tremendous opportunity to capitalize on this technology, not only for supply chain productivity improvements but for overall efficiency, resilience, and agility.

Unfortunately, the market is headed in the wrong direction.

The current market has tried in the past to solve the supply chain efficiency problems, or seize opportunities, by implementing planning technology to better plan the supply chain. Because I was heavily involved in defining these technologies at the time, I can say that the market achieved significant success with this first advancement of advanced planning solutions. Without this step, supply chains would be far less efficient than what they are today.

However, the market took a wrong turn when it decided to replace these tools with planning tools embedded in the ERP suite, and as Lora Cecere stated in a recent article, this for the most part proved to be a disaster. It created a whole new implementation, retraining cost, and new process efforts, yet created no additional value and we lost many years of opportunity to improve.

Unfortunately, now the market is poised to make its second major mistake by moving to what people are referring to as “modern planning tools”. These tools are however based on the same batch planning memory models of the past so this move will not achieve the promised goals. These systems will provide little to no value around supply chain productivity and it doesn’t matter whether you call it a “digital brain” or “concurrent planning” – it will not achieve the goals of significant productivity gains. At best, they will only be able to help in long-term planning.

“Companies will realize they need to move from decision-support technologies and plans that cannot be executed, to autonomous and prescriptive solutions.”

Greg Brady

I think the more innovative companies and leaders will soon realize that pursuing GenAI on an old technology is a dead-end; and that they need to move from decision-support technologies and plans that cannot be executed, to autonomous and prescriptive solutions. Only these solutions can scale to millions of buffer locations addressing problems throughout the day using data from all nodes in the ecosystem that is provided in real time on a single version of the truth.

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Geoff: The trend we are already seeing, and it is building momentum, is an increasing interest in ecosystems rather than the old B2B point solutions. We are seeing it in commercial space as well as in the government and public sector.

Organizations want the capability to easily collaborate and operate with other organizations. They want to balance supply and demand and to make predictions and plan accordingly. But they want to avoid the problems inherent in the old B2B world, where you’re trying to connect with other organizations with point-to-point IT connections, and then trying to digitize across legacy systems. It’s becoming evident that that really doesn’t work.

Supply Chain Trends to Watch: "The need for ecosystems that enable all parties to operate as peers, to plan, execute, collaborate, and use services to learn, predict, and make decisions automatically and semi-automatically." -Geoff Annesley Share on X

The ecosystem approach addresses many of these problems. You are able to digitize your supply chain network faster and with less IT maintenance. Then it enables all parties to operate as peers, to plan, execute, collaborate, and use services on the network to learn, to predict, and then make decisions automatically or semi automatically. This ecosystem makes AI far more powerful and practical. It can make recommendations on how to hedge, how to procure inventory at the right time, where to store it, how to move it through the network, working with a whole array of actors in the ecosystem, from manufacturers, suppliers, procurement service agencies to global logistics providers and LSPs.

I think the opportunities and potential of AI trained on massive amounts of data spanning large networks, verses AI trained on data from a single enterprise, will accelerate the move to supply chain solutions that can optimize planning and execution decisions across multi enterprise ecosystems in the next couple of years.

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So, What’s in Store for Supply Chains…

So, to sum up, if our experts are right, we are in for more…

• Focus developing data driven value chains
• Optionality to reduce risk and the effects of disruption
• Focus on planning and execution being considered holistically and synergistically
• Architecture and functionality that enables aligned planning and execution
• Reducing risk by prioritizing data from trading partners further up and downstream
• Disappointment with results from generative AI when it is coupled with legacy technologies
• Acknowledgement that we really need an ecosystem to achieve agile, collaborative, and resilient supply chains.

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