Supply Chain Trends That Will Shape the Future

October 19, 2020
By Sue Doerfler

Three macro trends — the rise of digital business, new competitor and trade uncertainty, and sustainability and the circular economy — will influence supply chains of the future, analysts with Gartner, the Stamford, Connecticut-based research consultancy, say.

At the Gartner Supply Chain Symposium/Xpo 2020, EMEA, an event geared to chief supply chain officers (CSCOs) held earlier this month, the analysts noted that supply chains are experiencing an evolution that will change how organizations are operated. “CSCOs are tasked to design a supply chain organization that fits into this new era,” Mike Burkett, distinguished vice president analyst with the Gartner Supply Chain practice, said in a press release. “While in the past, a good supply chain was efficient and powerful, it must now be agile and fast.”

The rise of digital business. There has been much talk about how digitization is the way of the future. Many CSCOs feel pressured by CEOs to make their organizations more digitized, Gartner research shows, but they find it difficult to develop a comprehensive digital supply chain roadmap. Burkett noted that the move to digitization often rests on CSCOs, due to the supply chain’s role in ensuring customer satisfaction. “This is the greatest transformation of supply chain structures in a long time,” he said, “and it will not be easy.”

The top barriers to development of a digital supply chain are (1) culture, (2) legacy technology, (3) usable data and (4) legacy processes, according to Gartner research. To overcome these and enable digitization, CSCOs must work with partners across the business, analysts said.

New competitor and trade uncertainty. The U.S.-China trade war, Brexit, tariffs, the coronavirus (COVID-19) pandemic and other disruptions have boosted supply chain uncertainty and made it a constant factor for organizations to manage.

One issue is based on the uncertainty of the next disruption and its impact. According to Gartner research, nearly half of CSCOs “believe that their business is at risk of being disrupted in the coming years, with the greatest risk coming from nontraditional businesses such as startups,” the press release says.

“The ongoing uncertainty calls for a new approach to supply chain management,” Burkett said. “CSCOs must build more flexible and resilient networks that can respond effectively to global shocks and disruptions — be it caused by nature or a competitor.”

Sustainability and circular economy. Supply chains play big roles in each aspect — make, use, return, recycle and reuse — of the circular economy model, Gartner says. According to the 2019 Gartner Future of Supply Chain Survey, more than a quarter (28 percent) of organizations said they had implemented circular-design approaches in their innovation strategies, and nearly four in 10 (39 percent) said they planned to do so within the next two years.

“A supply chain that enables the circular economy has to have strong reverse logistics capabilities. The heavy equipment and machinery industries are already on a good path,” Burkett said. However, no industry — including consumer products — should miss out on this trend, he added.

About the Author

Sue Doerfler

About the Author

As Senior Writer for Inside Supply Management® magazine, I cover topics, trends and issues relating to supply chain management.