2022: Supply Chain Trend Forecast
We hope that we can promise to never refer to COVID-19 again in the new year; however, supply chains are still not fully recovered. A recent Statista survey found nearly 72% of businesses suffering detrimental effects related to the pandemic. Nevertheless, 2021 has proven to be the year of perseverance and as we look onward to 2022, we see light ahead in the road towards recovery.
We refer to 2021 as the year of perseverance regarding the supply chain because supply chains proved just how agile they can be. Since the onset of the pandemic, supply chains have implemented changes rapidly to survive and navigate the volatile global trade landscape and fluctuating demand cycles.
It has been made abundantly clear that supply chains can weather the storm. In 2022, we hope to see supply chains shift from a fight or flight, survival mode to a thrive and dominate mode. We hope to see supply chains transition from a reactive model to a responsive model.
Because of global shutdowns and regional lockdown mandates, many companies found themselves scrambling to invest in digital technologies out of necessity to sustain operations. With the replacement and exit of antiquated business models and legacy infrastructure, many companies are poised to enter 2022 on a solid foot to optimize supply chain efficiency and operational effectiveness from end-to-end.
Here are some of the trends on our forecast for supply chains in 2022:
1. Circular supply chain
We first saw circular supply chains appear in the retail industry; more specifically in fast fashion as a means to reduce the industry’s carbon footprint. Now this approach seems to be taking hold in more than just one industry. According to recent Gartner surveys, 70% of supply chain leaders plan to invest in the circular economy, while 51% expect their focus on "circular economy strategies" to increase over the next two years.
The circular model discourages waste by encouraging sellers to repurpose discarded materials for reuse. This model helps to reduce supply chain costs and eliminate total company waste.
2. Supply chain elasticity
Supply chains have truly proved just how capable they are in these past two years and we do not expect the flexibility they have demonstrated to disappear. Rather, supply chains are forecasted to leverage their agility by developing strategies with built in elasticity to keep up with the ever-changing consumer profile.
An elastic blueprint enables supply chains to scale up or down quickly and effectively to keep up with unprecedented changes that are sure to take place, as foretold in 2020 and 2021. This approach cuts supply chain costs and improves company service offerings which helps to sustain customer relationships and build brand equity.
3. Green supply chains
We would be mistaken to not address the sustainability movement that is stretching far across the global business landscape and appearing in each companies 2022 strategy meeting.
The green supply chain implies exactly what it declares. How will companies integrate sustainable practices into their supply chain model in 2022? There are many approaches companies can take like starting with the circular supply chain model, procuring materials and services from sources who pledge environmental safety protections, establishing a standard for sustainability for the business, etc.
As the eco-friendly consumer further develops and more and more global corporations pursue ethical environmental responsibility throughout the supply chain network, environmentally friendly supply chains are projected to advance in the coming year.
We can’t predict the future, but we can forecast trends to help supply chains position themselves as successfully as possible. These trends will help supply chains to begin to compete again in the new normal and build out their competitive advantage for market differentiation and future business success.