As the logistics industry prepares for 2021, uncertainty becomes a huge problem.
For most businesses, supply chains are an essential aspect. Nearly 70% of industry professionals
feel that improving the supply chain is the key to better customer service.
But when you’re dealing with a world-changing event like the current pandemic, you can never be sure what the future holds. Does that mean that you should give up and let things go?
Of course not. You can actually improve your supply chain. That’s what we’ll discuss today. Here are some of the things we’re going to cover:
-
- The state of the supply chain industry as a whole
- The impact of the coronavirus on the global supply chain
- The biggest supply chain trends for 2021
The State of the Supply Chain Industry
Although the pandemic has taken a toll on all of us, some industries have even managed to thrive in these hard times. For example, the ecommerce sector has managed to grow. Thanks to this, Jeff Bezos, the founder of Amazon became the first person ever to be worth more than $200 billion in 2020
.
Due to the increase in ecommerce sales, supply chain providers also had a busy year. While aerospace supply chains stalled in 2020
, local companies flourished. While the lockdown created a sharp decline in world trade, this trend was countered by the growing demand for the transport of essential and protective goods.
How Covid-19 Impacted Global Supply Chain
The coronavirus started affecting the global supply chain ever since it was first detected in the last few weeks of 2019. You see, China is responsible for the fifth of the global manufacturing output
. As the coronavirus spread rapidly throughout the world, supply chains became one of the first casualties.
Even though the industry managed to adjust to it, this is still the biggest thing to happen to the industry in the last few decades. As a matter of fact, 7 out of 10 supply chain decision-makers feel that the coronavirus is and will remain the biggest factor impacting the industry, according to Jabil’s recent supply chain industry report
.
Supply Chain Trends for 2021
When building a successful business, everything requires your immediate attention. Product, design, marking, and everything in between. However, one thing that people underestimate is customer service. Why is customer service so important?
If you really want to make money, you better prioritize customer service. Nearly 85% of companies that manage to improve their customer service report a significant increase in revenue
. All of this brings us back to our topic of the day.
The supply chain is an important part of your customer service. To improve your supply chain, you need to know in what direction the industry is heading. To help you with it, we’re going to look at the supply chain trends you can expect in 2021.
1. New Technologies Will Speed Things Up
The supply chain industry has been going through changes for quite a while. In the last couple of years, Artificial Intelligence has helped supply chain leaders solve changes around data silos and governance. In 2021, AI will continue to increase integration and visibility across a network of stakeholders that were remote or disparate in the past.
One of the bigger supply chain trends you can expect is the introduction of 5G. Compared to 4G, this new technology offers a lot more speed and processing capabilities. How quicker is 5G than its predecessor? About 100 times quicker
. For instance, running a 5G network in a factory can significantly decrease latency and increase real-time visibility.
The supply chain is an important part of your customer service. To improve your supply chain, you need to know in what direction the industry is heading. To help you with it, we’re going to look at the supply chain trends you can expect in 2021.
2. More Request for Sustainable Operations
As people continue working from home, companies are continuing to adjust to the “new normal.” Most people have to work, eat, and entertain themselves 20 minutes within their homes. You can expect the supply chain industry to follow suit.
Companies are abandoning the old concept of office space
. They’re opening small satellite offices around the country to make things more convenient for their employees. Moreover, they’ll continue working with most of their clients strictly online.
3. The Focus Will Shift to Ecommerce
The ecommerce sector has been growing for quite a while now. Due to the pandemic, it has grown significantly in a short period of time. How big is ecommerce now? Bigger than it’s ever been. Some studies show that ecommerce sales are likely to hit $4.9 before the year is over.
Seeing how consumers aren’t going to go back to their 2019 lifestyle anytime soon, supply chain providers are going to have to adjust to the situation. If supply chain providers want to stay afloat, adjusting their service to suit ecommerce clients is going to become a necessity.
4. Localization Instead of Outsourcing
In the last two decades, cross-border commerce has simply exploded. However, the expansion has slowed down significantly ever since the pandemic hit. According to the World Trade Organization, in 2020, global trade has decreased by 9% compared to the year before.
Businesses from all over the world are trying to cater to local consumers. Working with local providers is going to be one of the biggest supply chain trends this year. Although we’ll see some return to the international markets in the next couple of years, it won’t be big enough to make a massive difference.
Closing Thoughts
The ongoing pandemic has affected supply chain trends both on a local and a global level. That’s why watching current trends is more important than ever. Businesses that want to surpass their competitors need to keep an eye on the direction the industry moves in.
If you’re looking for a business partner that will help you manufacture your product, handle the packaging, and ship it safely, Mark One is the service for you
. You can check out our services page
for more details and contact us
i
f you have any more questions.
