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12/20/2021

CSA Exclusive: Three key supply chain trends for 2022

Dan Berthiaume
Senior Editor, Technology
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Abe Eshkenazi
Abe Eshkenazi, CEO, Association for Supply Chain Management (ASCM)

Innovative solutions and strategies will be crucial to ensuring a bright new year for supply chain operations. 

Chain Store Age recently spoke with Abe Eshkenazi, CEO, Association for Supply Chain Management (ASCM), about what he sees as the supply chain trends poised to have the most impact in 2022. According to Eshkenazi, supply chain organizations that take advantage of the “three As” (analytics/automation, agility, and artificial intelligence (AI) will have the best chance of overcoming disruption and other supply chain issues to have a successful year.

Following is a summary of Eshkenazi’s comments in each area.

Advanced analytics and automation
In 2022, the implementation of analytics and automation will revamp how businesses approach planning, manufacturing, warehousing and logistics. Advanced analytics and automation will continue to accelerate, leading to more digital and agile supply chains that can better mitigate the impact of uncontrollable circumstances, such as the pandemic, weather or other unexpected events.

Automation will streamline all the key steps in the supply chain, from manufacturing the products with minimum human intervention, to managing the distribution process with storage and retrieval systems, automated guided vehicles (AGVs) and drones, among others. Additionally, leveraging predictive and prescriptive analytics, as well as big data, algorithms and robotics, will have broad-reaching effects across the supply chain.

Organizations that harness the power of these solutions will have an advantage in driving execution efficiency, greater visibility, data-driven decision-making, predictability and profitability. However, to be as effective as possible, organizations will need to re-skill the workforce and invest in data security and governance. 

Supply chain agility
Supply chain agility will be essential to creating networks that can effectively respond to ever-increasing uncertainty. Dynamic customer demands will drive organizations to be more flexible and reactive to stay competitive. There is no one-size-fits-all approach — but it will be important to proactively identify ways to increase responsiveness through variable cost structures, such as short-term contracts and more modular, later-point product differentiation.

This trend in agility is a reaction from increasing uncertainty and shorter-term contracts. In 2022, organizations should look to foster continuously innovative cultures to be more flexible and respond more quickly to changes. 

Artificial intelligence and machine learning 
Artificial intelligence and machine learning will prove foundational to integrating people, processes and systems in a wide array of operational environments. The technology-driven evolution to industry 5.0 — which involves a more collaborative approach, as well as partnerships between humans and robots — will have significant impact on supply chain functions such as planning, demand management and fulfillment.

As machines learn, improved insights will be discovered, leading to significant transformation, advancement and competitive advantage. For example, detecting demand changes earlier allows upstream supply chain departments to respond with more agility and higher responsiveness. 

Survey – Retailers expect supply chain woes in 2022
Fully 100% of surveyed senior retail executives in a recent study by First Insight and the Baker Retailing Center at the Wharton School of the University of Pennsylvania agreed that supply chain disruptions would affect sales, prices and promotions during the 2021 holiday season. And 98% agreed that supply chain issues will continue impacting the retail sector through 2022 and beyond.

According to the study, the top three ways retailers are combatting supply chain issues is by improving their forecasting, finding new manufacturing or vendor partners, and streamlining assortments.