Trends that will still impact the supply chain in 2022
There are fewer events in history that have had the impact that Covid19 has had on the world supply chain. It’s been two years and the Rube Goldberg machine has not stopped. Going in to the third year some of these effects are still strong and it looks like we still need to hold on a little bit longer. Fore warned is fore armed. So, let’s have a look at what baggage we can still expect to include with our 2022’s new year’s resolutions and what we still need to improve to make the best out of this hand we have been dealt.
There are fewer events in history that have had the impact that Covid19 has had on the world supply chain. It’s been two years and the Rube Goldberg machine has not stopped. Going in to the third year some of these effects are still strong and it looks like we still need to hold on a little bit longer. Fore warned is fore armed. So, let’s have a look at what baggage we can still expect to include with our 2022’s new year’s resolutions and what we still need to improve to make the best out of this hand we have been dealt.
- With the advent of Covid19, the growth of Last Mile as a Service was accelerated. People want the delivery turnaround of online shopping like that of going to the shops, without the health hazards associated with that-instant gratification. Many businesses have outsourced this to 3PL (Third Party Logistics) and these businesses, due to their large sizes and internal red tapes are not reacting at the rate that pleases customers. This has resulted in lot of entrepreneurs entering this space to fill this customer needs. Big businesses are still lagging. Your 3P Logistic companies need to be more agile and pivot in accordance with the customers expectation or you may lose business to your hungrier competitor due you’re your choice of rigid Third-Party Logistics.
- Increases in online shopping has shifted the focus of logistics businesses from large warehousing to improvements in cross docking facilities. Cross Docking facilitates faster turnaround for goods delivery. Improving your cross-docking facilities will increase delivery times and in turn improved sales.
- The boom in online shopping has also highlighted an area of the logistic business that is always overlooked- Reverse Logistics. That is delivery failures, returns and end of life items. Physical locations (Brick and Mortar) reverse logistics were easy as customer brought back items to a dedicated counter within the store and the cost was mostly on the customers. Now, when customer buy online, they expect to have returns on the platform they used. Most businesses were not set up for this as there are numerous points to take into consideration. e.g. Is your warehouse set up to receive back stock? What is the cost of return vs Sale of item? Etc.
- At some point all countries were locked to outsider and we all had to stay home. Global supply of products collapsed and when we finally reopened, the back logs of delivery were months long. Businesses were forced to look locally for products and then some went into backwards integration in a bit to secure stock. We saw local sourcing grow, a trend that will continue in 2022 as we are still seeing port congestion going into the festive season, the increasing cost of freight is negating the benefits of international procurement.
Have a look at how your business has embraced the changes that are brought about by Covid19. Are you pleased? If not know that your competitors are eating your lunch and you need to pull your socks to stop the sales bleed.
