Over the last year or so, we’ve seen an acceleration in e-commerce that has resulted in disruptive progress to supply chain management propelled by a raging pandemic. To deal with these developments, supply chains have quickly evolved to use better planning and automation to serve global markets and disintermediated channels.
Now, as we contemplate how these changes will pan out over the next 10 years, we can’t help but think that we’ve already witnessed some long-term shifts in the way we do business.
But here’s the thing, predictions by their very nature are uncertain. A lot can change by 2030, and startups like ours are doing our best to keep up with the pace. However, the fact of the matter is that countries, businesses, organizations, and people in this industry must realize that any attempts to resist change are futile.
The procurement, sourcing, and supply management industries are evolving at never-before-seen speeds – a revolution is at hand.
Potential Outlook – The Supply Chain of the Future
The coronavirus pandemic has outlasted all expectations and predictions. It has also devastated global value chains, rocking businesses that depend on supply chain management for their everyday operations.
But despite the setbacks, the global supply chain management market will double in size and achieve over 37 billion US dollars of economic growth by 2027.
That’s good news. But there is a possibility that entire production mechanisms will have to transform to keep us with the fourth industrial revolution and make this progress possible. There is no telling how this will affect the sourcing industry. As long industrial production continues to increase, and there is greater economic exchange across global regions, chances are that we’ll still have a job.
To keep up with the sourcing needs of businesses in 2030, supply chain businesses must anticipate the forces that can impact them and adjust their approach accordingly.
Here’s are a few ways we see companies embrace and capitalize on future challenges for their supply chain and achieve their sourcing priorities in the process:
1. Prepare for the Impact of AI and Automation
Emerging technologies such as artificial intelligence and automation are at the forefront of change in the supply chain industry. According to a McKinsey report, automation has the power to increase global productivity from 0.8 to 1.4 percent. This is good news for businesses and worldwide economies as it promises economic growth and higher GPD for manufacturing nations.
However, the same report also predicts a loss of $15 trillion in wages because many jobs will be taken over by machines by 2030.
So, chances are that businesses will have to deal with a very volatile work environment by fostering inclusive labor practices. Suppliers play an important in this uptake of automation. They must be a part of the plan to support workforce transition and training for an automated future.
This will include using technologies to help workers understand their rights and learn new skills that keep them relevant to the supply chain industry.
2. Setup Regional Sourcing Hubs for Ease and Affordability
We’ve already explored the unprecedented growth in markets and demographics that we’ll witness by 2030. This progress will increase the demand for customized products and services.
Businesses will have to fulfill these new requirements and consumption patterns. They’ll have to source goods from locations and in new formats.
In such circumstances, the only leaders will be regional supplier networks that can meet the sustainability goals and commercial targets. If the pandemic has taught us anything, it’s not to put all our eggs in one basket, i.e., China.
Companies will continue to build on this lesson and look for ways to develop intelligent sourcing models in emerging hubs like Pakistan, Malaysia, and sub-Saharan Africa.
3. Enhanced Supplier Assessment and Engagement Strategies
Supply chain leaders looking towards a lucrative 2030 will have to find ways to become a customer of choice to access benefits such as access to specialized and scarce resources that could serve account relationships, more favorable terms, and priority allocation of goods.
This is a vital strategic advantage that’ll set good businesses apart from the best ones.
Besides, today’s remediation and audit tactics will hardly satisfy the needs of AI and automation training programs of the future. The suitable suppliers will partner up with supply chain leaders to guide corrective action for an automated, AI-enabled yet sustainable future.
4. Greater Need for Supply Chain Transparency
Supply chain businesses must prepare for possible scenarios that mandate the need for in-depth visibility into their practices and necessary disclosures.
The future is uncertain. Any number of issues can overwhelm global trade or unpredictable regulations, leading to mandatory corporate disclosures about sourcing companies and other issues. It’s better to be safe than sorry in 2030 when free trade will be dependent on enhanced transparency.
Enhancing the quality of business transparency and accountability will help suppliers and practitioners face any regulatory requirements of the future. This will also help everyone weather through increased stakeholder scrutiny and find unique ways to collaborate with global suppliers and clients.
5. Plan for Climate-Smart and Sustainable Supply Chains
The speed at which our environment is changing, chances are that the physical environs will be quite different ten years down the line. This begs the need for sustainability drives that mitigate related supply chain risks and help businesses deal with global climate changes.
This issue can disrupt supply chain planning models, compelling businesses to have a backup of alternative materials and resources where necessary. This is the only way to secure their supply and minimize possible disruptions due to inclement weather and other natural phenomena.
Suppliers will become an essential part of this drive to create greater climate awareness and action. The right ones will offer technical and management skills as well as policy commitments. All in all, climate-smart supply chain planning must be made a fundamental part of good management today and through to 2030.
In Conclusion: The Future Is Hopeful
There is no doubt that sourcing and supply chains will look entirely different in 2030.
As professionals in the industry, it is our responsibility to understand emerging trends and understand their impact on the future. It’s time to find ways to embrace new technologies while also uplifting the people who’ve made it all worthwhile.
Diversity and sustainability should continue to be the drivers as we look towards a hopeful future.