Top trends driving supply chain design decisions

Last year companies were grappling with higher e-commerce order volumes, an uncertain global tariff environment, a tough political environment and stiff competition for both labour and warehousing space. Immediate reactions included reshoring manufacturing operations, seeking out new, non-Chinese sources of supply, transforming physical stores into full-blown delivery hubs and investing in more technology and automation.

With the pandemic entering year two, companies are retracing the steps they took in 2020 and finding more enduring ways to shore up their supply chains not only for the pandemic, but also with a longer-term view in mind. For some, this means taking a close look at e-commerce volumes and trying to figure out just how long the current “spike” will last, and how much it will recede once customers can feel safe returning to their favourite brick-and-mortar stores.

SCMR came up with a good article detailing the top trends driving supply chain design decisions for the coming year—and beyond.

5 forces of change that are affecting supply chain design and prompting organizations to rethink how they run their global supply chains.

1. Geopolitical disruption and uncertainty abound. Companies find themselves wading through a contentious election environment, uncertainty over global tariffs and Brexit.
2. China Plus One and other strategic moves. Lot of companies started looking around at alternate sources of supply. Some adopted a strategy now known as China Plus One by maintaining their presences in China while also diversifying into at least one additional country.
3. Balancing cost, service and profitability. some companies are converting a portion of their physical store space into micro-fulfilment operations dedicated to buy online/pickup in-store. “Others are picking up now-empty retail space and using it to get their fulfilment operations closer to the end customers,”
4. Leveraging the right tech to improve resilience. forecasting errors spiked to levels almost 45% higher than their pre-pandemic baselines. Companies gave up on their systems and had to do major manual excel lifting. It exposed how inadequate the current systems and processes for companies were.
5. Preparing for more macro and micro shifts. More companies are redesigning their supply chains with their customers front-and-center, knowing that both B2C and B2B buyers have the upper hand when it comes to vendor selection, cost, and shipping preferences (among other things). To compete effectively, Jorgensen says supply chain managers have to ask themselves questions like: What are our customers’ expectations? How does our supply chain measure up, based on those expectations? And, what actions can we take or what trade-offs can we make to improve upon that?