Let’s Get a Clear Picture of Your Supply Chain in 2024

We’ve discussed potential customer expectations for the coming year, but proactive planning also requires that we spend time examining the enterprise landscape to pinpoint growth opportunities 2024. While we have seen the resolution to some major disruptions, such as strike negotiations and new compliance codes, many challenges are set to persist into the coming year and give way to new changes. For the modernizing supply chain, this can be good news since change provides the opportunity to improve systems and stay ahead of competitors. To fully understand the domino effect of supply chain changes, let’s take time to review some of the most prominent disruptions and their impact within the past year:

• Material Shortages – Virtually every industry was affected by low production rates stemming from material scarcity. From silicone to eggs, the supply chain navigated longer lead times and increased prices to compensate for shortages. Studies conducted by the IHL Group suggest stockouts have contributed to an estimated $1.8 trillion lost globally to inventory distortion. As a result, manufacturers are expanding supplier lists while also near-shoring production to prevent shortages and reduce shipping timelines.
• Increasing Cybersecurity Threats - As supply chains become more digitized, they also become more vulnerable to cyber-attacks. Google registered one of the largest cyberattacks in history this year, roughly 5x larger than previous attacks. Ranging from data breaches to ransomware attacks, cybersecurity threats significantly impact business operations and may even taint a company’s reputation, resulting in missed sales. Therefore, in the coming year, adaptable, user-friendly cybersecurity plans will be crucial to protect sensitive data and empower workers to play a part in safeguarding information.
• Truck Driver Shortage – Talent shortages have been an ongoing challenge in past years, affecting different parts of the supply chain at any given time. However, large trucking corporations saw a decline in driver retention in 2023, disrupting the transportation and logistics High demand for drivers in 2020 coupled with low fuel prices had made trucking a profitable line of work for most people, yet once fuel prices began to skyrocket again, many independent drivers, who make up approximately 15% of the industry, are now exiting the field. Consequently, supply chain analysts expect to see a push for innovative shipping solutions and evolving connectivity systems to empower delivery teams while alleviating worker stress.

Related: See how warehouses safeguard productivity during disruptions in logistics.

• Foreign Tensions – Conflicts in Eastern Europe and the Middle East have greatly affected global supply chains with uncertainty, interrupting the flow of goods and services. For example, trade disputes and tariffs increased the cost of importing materials, leading to higher prices for consumers and, as mentioned before, shortages. Additionally, geopolitical tensions can lead to transportation delays as countries may restrict shipping across borders. Overall, foreign tensions contribute to a higher level of unpredictability in supply chains, making it difficult for businesses to plan and operate effectively. Forecasting and intelligent computing will be essential to properly estimate stock levels and automate replenishment for increased efficiency.
• New Compliance Mandates - Regulatory compliance is a critical aspect of supply chain management, but it can be challenging to navigate. New regulations from the US Food and Drug Administration (FDA) demanded optimized traceability from the food and beverage industry in 2023, while many international entities now require sustainability disclosures for incoming shipments. Moreover, businesses need to comply with a variety of local regulations, including safety standards and labor laws. In doing so, businesses may also attract and retain skilled labor while reducing the risk of recalls.
• Increasing Space Costs –Studies show occupancy expenses have increased by 4% compared to last year and now account for at least 24% of total operating costs. The e-commerce boom has heightened the need for more storage space to prevent stockouts for high-demand products. Moreover, many companies are increasing their SKU volume to offer a greater variety of products, thus requiring more storage space. Once again, new shipping methods along with urban warehouses have become popular solutions to reduce warehousing and last-mile expenses simultaneously.  

This is by no means an exhaustive list of supply chain news. However, each one of these changes offers a promise of optimization for the coming year. By partnering with strategic solution designers, businesses get a clear vision of how the supply chain may evolve, uncovering insights to increase efficiency.

2023’s Challenges May Be the Start of 2024’s Opportunities

As businesses dealt with the challenges listed above, several innovative solutions have emerged. Consider the following solutions as dependable foundations for simplifying supply chain management.

1. Embracing Automation and Forecasting

In today’s digital age, it has become vital for businesses to leverage enterprise-ready systems such as barcode scanning, artificial intelligence (AI), and the Internet of Things (IoT) to eliminate costly errors from hiding within their workflows. These technologies help supply chains track inventory in real time, analyze data to predict demand, reduce lead times, and improve supply chain visibility. For instance, intelligent data collection systems help businesses gather actionable insights to forecast inventory demand and maximize product availability.

2. Diversifying Supplier Relationships

Another solution to consider is supplier diversification as it helps to prevent stockouts. With material shortages affecting virtually every industry, it is now essential for businesses to work closely with their suppliers to ensure they receive the materials they need on time. By building strong supplier relationships with multiple businesses, manufacturers can adjust production with different materials in the event of another shortage. For instance, this year, some companies entered into long-term contracts with their suppliers to secure the materials they needed, while others collaborated with their suppliers to find alternative sources of materials. Moreover, supplier diversification can also help establish sustainable practices since companies can select suppliers that best align with their sustainability values.

Related: Check out two sure ways to diversify your supply chain in our blog.

3. Optimizing Material and Inventory Shipping

The truck driver shortage was one of the most significant challenges that supply chains faced in 2023. Shipping workflows are crucial for the overall success of the supply chain. Therefore, businesses are encouraged to enhance shipping and on-the-road tracking with long-range connectivity and user-friendly data-sharing tools as these connect transportation teams with administrators. Enterprise connectivity networks sustain signals as drivers venture into remote areas, so they can continue to manage arrival times, verify fuel levels and prices, and report order status.  

4. Prioritizing Solution Support

Finally, one of the most helpful tools to preserve business continuity is reliable technical support. When disruptions happen, having the right support team at your side minimizes complications. For example, asset management teams can help you monitor device lifecycles and schedule maintenance before systems begin to break down. Mobile device management plans can also collaborate with your IT team to establish reliable cybersecurity parameters on your devices. Moreover, in the event systems need to be upgraded, a reliable support team like AlwaysOn walks you through your affordable options throughout the implementation process to reduce disruption.

While it may be impossible to accurately predict the state of supply chains in 2024, proactive planning based on past obstacles will set businesses on the right foot toward enterprise success. To learn more about how you can prepare your operations for next year’s challenges, meet with our automation team and explore the new frontier of modernization.