Specialized company presents 8 topics that should dominate the logistics and supply chain field in the coming years

So Paulo – Supply chain and logistics leaders have never faced so many challenges, especially those exposed during the pandemic. These challenges certainly started well before Covid-19, but will continue after the disease is fully under control, such as global conflict, overheated demands, shortages of people, equipment and supplies, rising costs and customer expectations, in addition to the increased focus on decarbonising the supply chain. Therefore, these leaders need to rethink their strategies.

At the same time, recognition and understanding of the importance of the supply chain has grown. Today, leaders in this field have more say in business decisions as it is understood to be a critical issue for a company’s bottom line. That’s why Descartes, a company specializing in logistics and supply chain management solutions based on cloud computing, has identified eight trends that should dominate the segment. Organizations that understand and act on these nine themes have the ability to not only survive, but thrive in the chaos and scarcity to come.

1 – Geopolitical conflicts

Tensions between nations have always existed, but have increased over the past decade, affecting logistics processes as a whole as current supply chains have become globalized. Instead of physical conflict, countries are using economic regulation to enforce their interests, not to mention cyber warfare has become a focal point.

While war is difficult to predict, many conflicts are apparent and evolve over the years, so there is time to minimize supply chain disruptions before they occur. One of the industry’s biggest challenges is investigating business partners and sanctioned individuals to determine whether it is possible to continue doing business with them and avoid fines or reputational damage.

In addition, supply chain resilience, once defined as the ability to respond to disruptions, must now include the ability to withstand attacks on today’s IT infrastructure. Alternative logistics and sourcing strategies should be part of the company’s annual risk assessment to diversify the impact of regional or commercial partners.

2 – Global Navigation Crisis

The pandemic has had many business impacts, including the global transportation crisis. It looked like it would be a temporary thing, but it won’t end anytime soon. Many services, such as travel and leisure, have seen less investment as consumers use their money to buy other goods.

The buying pattern has changed since the start of the pandemic. For example, the US imported 22% more containers of goods in 2021 than in 2019. The dramatic imbalance between shipping capacity and consumer demand has ground to a halt in global and domestic supply chain and logistics operations. This does not appear to be a short term situation. The implications for the global supply chain and logistics operator are significant and cannot be ignored, so purchasing and logistics strategies need to be reassessed. Shipment visibility, transportation costs, optimization and seamless border handling have become more important than ever.

3 – Capacity Shortage

With more freight traffic, the current logistics infrastructure cannot keep up with demand. In addition, there is a major imbalance in logistics assets, which means that flows of goods cannot flow. For example, the skyrocketing growth of e-commerce during the pandemic has shifted the capacity crisis to last-mile truck and logistics as consumers shop more online and less in-store. Added to this is the shortage of labor logistics, a challenging situation that was already identified before the pandemic.

We know that infrastructure changes will take place in ports and roads around the world to cope with unprecedented growth, and this will bring long-term benefits. But today’s supply chain and logistics operations need to be more productive and efficient with the resources that already exist, to give greater visibility to assets and maximize their use, and rebalance their location over time.

Optimization will also be key to reducing warehouse space, transportation inefficiencies and increasing the effectiveness of currently available assets. The network effect will be instrumental in taking logistics operations to a new level, as companies work together to unlock the capacity of stalled transportation, creating efficiencies that never occur in the individual supply chain.

4 – Shortage of inventory

Rising demand for consumer goods, the global shipping crisis, a lack of shipping capacity and a shortage of staff to plan and move the goods – all of this has led to a shortage of supplies. As a result, retailers, manufacturers and distributors have topline limited due to lack of stock. In some cases it is worse because of the growing uncertainty about capacity shortages in the global supply chain and logistics. Retailers, manufacturers and distributors want to increase their inventory, but are unable to do so in a timely manner.

It is critical for manufacturers, retailers and distributors and their logistics partners to better understand inventory moving and at rest in the supply chain to make the best decision on how to deploy it to maximize revenue and minimize costs. In addition, it is essential to know the condition of the inventory to ensure that what is available is properly maintained to minimize loss.

As inventory becomes available, the speed and efficiency of its movement through the supply chain and customs processes for cross-border trade becomes much more important. Once in the hands of retailers, inventory accuracy becomes paramount to ensure a differentiated customer experience and not oversell what is available or miss a sales opportunity.

5 – Rising costs

Across the board, costs are skyrocketing due to rising demand, commodity shortages and inflation. Probably nowhere has the impact of higher costs been greater than in shipping. In some commercial routes, container shipping costs are ten times higher than pre-pandemic levels. Scarcity of materials (eg computer chips), rising wages and other factors are pushing inflation to levels not seen since the 1980s.

The focus on the growth of the past decade is now shifting to cost control. Companies are looking for ways to mitigate the impact of rising logistics costs and inflation by efficiently using the resources they have, eliminating non-value-added activities and changing service policies. Factors such as supplier sourcing, logistics and supply chain optimization, and automation and cost-benefit analysis challenge organizations to find less, do more at a lower cost, and rationalize how they serve customers to improve margins.

6 – Customer Experience

Even amid the chaos that exists today, the customer is king. Companies that offer a differentiated experience can attract and retain more customers, resulting in stronger growth and greater profitability. Supply chain and logistics operations have moved to the forefront of differentiated customer experience strategies. Superior experience is no longer just about reliable and consistent delivery service. The ability to influence the shopping experience, engage the customer throughout the delivery lifecycle, and provide the customer with valuable real-time delivery information is what sets the industry leaders apart from the rest of the pack.

A digitized logistics operation has the ability to transform the end-to-end customer experience as it touches the entire process from purchase to delivery. By providing customers with value-added services while they are shopping, businesses can increase sales and reduce delivery costs. Real-time delivery status updates keep customers informed about their orders and ensure they are available to receive them. For B2B customers, this information is very useful for pre-determining how they want to deploy the delivered goods and maximize their resources.

7 – Sustainability

As more governments put environmental plans into practice and consumers make purchasing decisions based on a company’s sustainability, supply chain and logistics operations must become a large part of efforts to reduce greenhouse gas emissions. That is why CO2 reduction is an opportunity. It’s time for supply chain and logistics performance improvement programs to give operations the sustainability credit they deserve.

There are many ways to create performance improvement programs to help reduce greenhouse gas emissions and other polluting activities. Significant positive environmental impact can come from providing the greenest delivery options to minimize distance and fuel consumption, optimization solutions to digitize paperless logistics processes, and more. If ever there was one place companies could improve their performance and help the planet, it’s with their logistics operations.

8 – Innovation

A convergence of new business models and technological advancements is redefining how companies use supply chain and logistics operations to achieve new levels of business performance and create competitive advantage.

studies of benchmark show that companies perform better when their executives understand the strategic importance of logistics and associated technology. Now there are many ways in which technological innovation can advance supply chain and logistics and improve operational performance. Cloud computing enables supply chain and logistics solutions to scale to solve complex problems that extend beyond individual companies and use real-time data to make better decisions.

Artificial intelligence (and machine learning) is being applied to the vast stream of real-time GPS data and transactional data that supply chain and logistics operations can generate to gain deeper insights into operational performance, predict results more accurately, and tune.

The ability to interact

The automation of the supply chain and logistics, combined with customer-centric solutions, gives customers the ability to communicate on-demand with their logistics partners, retailers and others to create a seamless and differentiated experience. Descartes is willing to offer its customers the best technologies in the segment, according to the trends identified.

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