Top 8 Supply Chain Challenges to Expect in 2024

The world of supply chain management is ever-changing. With new technologies and trends emerging every year, it’s difficult to predict exactly what challenges we will face this year. Nevertheless, last year was a prime example of how the supply chain is vulnerable and adaptable to change. If you recall not so long ago, warehouses and distribution centers navigated major disruptions such as:

• The rise of robotics in the warehouse
• Escalating inflation
• Ongoing labor shortages across the supply chain
• New compliance codes

Many of last year’s challenges have evolved and taken a different shape in the modern era. 2024 will be no different in terms of navigating roadblocks and opportunities. Therefore, experts recommend focusing and preparing to address the following challenges:

1. International tensions - Trade conflicts between countries can disrupt supply chains, leading to delays and increased costs. Research estimates that 80% of workers are concerned about the impacts of global issues in their workplace. Last year’s tensions in Eastern Europe and the Middle East may still impact supply chain management this year with increasing fuel costs and material shortages. Therefore, companies will need to develop contingency plans to mitigate the impact of trade uncertainty on their supply chains.

To combat this challenge, businesses turn to diversification and automation. Companies can prevent shortages by working with multiple suppliers while bringing production closer to their customers. Automation is another positive way to  enhance shipping solutions as it further accelerates production and minimizes worker stress.

2. Demand for Sustainability - As consumers become more environmentally conscious, supply chains must adapt to meet their demands for more sustainable products and practices. Studies show that 81% of global consumers feel strongly that companies should help improve the environment, creating a growing demand for sustainable products since consumers consider the environmental impact of their purchases. As a result, companies prioritizing sustainability are likely to attract and retain more customers. 

Sustainable warehousing can involve many enhancements; however, the simple act of consolidating workflows can go a long way. By eliminating the need for disparate systems, such as clipboards and two-way radios, businesses reduce e-waste and energy consumption. Handheld computers have earned their place in the sustainable warehouse by streamlining data capture, computing, and team communication in one terminal.

Related: Learn how to preserve sustainability in these 5 crucial warehousing operations.

3. Persistent Cyberattacks – For the past decade, cyberattacks have remained a constant threat looming over the supply chain. Leading reports have estimated that 23% of ransomware attacks targeted manufacturing supply chains, costing approximately $1.85 million to remediate. With the increased use of digital technologies comes the risk of cyber threats.

A careful analysis of threat actors shows that most capitalize on user ignorance through social engineering attacks. Therefore, when enhancing your cybersecurity plan this year, consider prioritizing employee training, app allowlisting, and around-the-clock protection since most attacks happen during off-hours, weekends, and holidays.

4. Retaining Skilled Labor – While the job market reports steady employment improvements, worker retention continues to be a struggle for most supply chains, specifically within the distribution and transportation From order volume increases to complex system training, workers face a myriad of stressors, each contributing to turnover.

As warehouses prepare to process more orders with fluctuating labor pools, automation becomes a means to alleviate pressures while empowering the workforce. Surveys show that about three-quarters of warehouse workers prefer jobs that include technology to facilitate tasks over higher pay and long hours. For example, hands-free and voice-picking systems reduce training times with easy-to-follow auditory cues while increasing productivity by 30% since fewer touchpoints are required to complete orders.

5. Deglobalization - The trend towards deglobalization has been accelerating since 2016, with companies nearshoring their operations to reduce the risks associated with global trade. While many struggles associated with the 2020 pandemic are long gone, 88% of companies still report longer lead times for materials. This shift in global trade has had a significant impact on supply chains, leading to increased complexity and prices, thus affecting consumer satisfaction.

While there are many shipping solutions dedicated to navigating deglobalization, special attention should be given to direct-to-customer shipping. In bypassing traditional distribution channels, manufacturers reduce operational costs, increase inventory control, accelerate shipping, and improve customer relations.

6. Demand for Supply Chain Transparency – Approximately less than 10% of warehouses confidently state they have complete visibility within their operations. While visibility technologies have been on the rise, many businesses still struggle to implement them. Moreover, seamless implementation is only half the battle if administrators aren’t able to leverage collected data into an action plan.

Between real-time order tracking and compliance code monitoring, visibility solutions are foundational to enterprise success. Therefore, strategic solution providers should incorporate scalable systems that are also easy to understand. This allows teams to turn collected data into actionable insights, such as demand forecasting and projected production levels, to optimize shipping and stay ahead of changes.

7. Integrating Artificial Intelligence and Other Emerging Technologies - Supply chains are complex and involve multiple stakeholders, including suppliers, manufacturers, distributors, retailers, and customers. Managing these stakeholders, along with the movement of goods, is a challenging task without automation. Therefore, emerging technologies such as artificial intelligence, Internet of Things (IoT) systems, and blockchain will continue to play a major role in modernized supply chain management.

AI can help businesses automate many processes, including demand forecasting, inventory management, and logistics planning. By using AI algorithms, businesses can analyze large amounts of data and make informed decisions in real-time. This helps to reduce costs, improve efficiency, and increase customer satisfaction. Similarly, IoT devices can help track products throughout the supply chain, providing real-time visibility into the location and condition of goods. This helps businesses optimize their inventory levels, reduce waste, and improve accuracy.

8. Addressing Pent-Up Inventory Demand - To combat shortages, supply chains increased their safety stock. Studies estimate backup inventories increased by 11% within the past five years, demonstrating a push for resiliency amidst change. However, pent-up stock can become problematic in the long run as it takes up space and costs more to store as is the case with cold storage. Nevertheless, failure to maintain proper stock levels can lead to stockouts and missed sales.  

Maintaining proper inventory levels while accommodating more orders and diverse suppliers requires dependable visibility and communication. Unsurprisingly, digitized inventory management systems have served as a dependable solution to preserving accuracy within cycle counting. When paired with reliable connectivity systems like 5G and Wi-Fi 6, teams can use data from their IMS to adjust inventory levels and reduce carrying costs.

RELATED: SEE HOW MODERNIZED COMPUTING EMPOWERS SEAMLESS MATERIAL MOVEMENT FOR JUST-IN-CASE INVENTORY MANAGEMENT.

Remember, this list is by no means exhaustive. As new changes emerge, specific risks faced by individual businesses will vary depending on their industry, location, and size. Equipped with risk awareness and contingency plans, businesses may improve their chances of success in the ever-changing world of supply chain management.

Learn more about how these disruptors may affect your workflows when you meet with our strategic teams.