Done well, sourcing and procurement can drive value and competitive advantage for an organization. Those that optimize their sourcing and procurement departments through well-defined procure-to-pay processes and strategic automation can focus their employees on supplier relationship management, creating long-term, mutually beneficial partnerships.

After retiring from industry, I was appointed as a professor at NYU, where I taught supply chain management for over ten years.  I also taught a Certified Supply Chain Professional (CSCP) course to managers in major corporations. I was thus able to see first-hand how corporations monitored their supply chains, and contrast it with how we taught the subject. I found there was a considerable dichotomy between the field practices and academic precepts.

Digital technology in the supply chain, such as artificial intelligence and machine learning, supports end-to-end decision-making, and visibility into both network-wide supply-demand information and operational level response. These technologies run on data, which makes timely and accurate data collection, validation, management and analysis fundamental to advancing digital optimization strategies. That’s especially the case in today’s highly volatile market, where it has become increasingly challenging to accurately predict capacity and demand.

In today’s tight transportation market, finding carriers to cover loads has become increasingly difficult. Capacity constraints, labor shortages, rising shipping costs and growing shipping volumes are all expected to continue throughout 2022 (and possibly beyond), making traditional approaches to procurement insufficient. Addressing both short-term and long-term capacity needs requires a more modern and strategic approach. Digital freight matching can help overcome these challenges by accessing untapped capacity and connecting carriers with freight.

Brick-and-mortar retailers have found an advantage over online retailers by implementing ship from store (SFS). By fulfilling e-commerce orders directly from stores, they can cut the time it takes for orders to reach customers and increase the number of orders they can process across their network. Although the path to an efficient SFS operation is different for each company, following is how the trend will generally evolve in the years ahead.

The use of lithium batteries, which power laptops, cell phones, medical equipment and more, continues to grow. The trend has brought with it stricter rules and harsher non-compliance penalties around lithium battery shipments, creating greater challenges for companies that manufacture and distribute them, and the technologies that rely on them. To maintain a safe and efficient supply chain in the face of these e-commerce challenges, companies need to rethink their approach to packaging.

Artificial intelligence is expected to significantly impact supply chains by 2023. AI’s value lies in more than the automation of tasks. It opens opportunities for organizations to focus on strategic problem solving, relationship building and predictive insights. AI brings the latest, best, and most relevant information to employees through intelligent capabilities. Although AI is “smart” automation, its success still depends upon people — the organizations and employees who deploy it.

Talent availability and fit is consistently a topic of concern among senior supply chain leadership. The competitive job market, impacts from the pandemic, and increased regional demand for hourly talent have amplified this ongoing challenge. Labor growth strategies have historically focused on acquiring talent through pay incentives. However, sophisticated companies have matured past simply competitive hiring strategies, and have now turned to forms of development and investment in their current talent to meet future demand.

Safely and compliance in shipping and handling dangerous goods and hazardous materials have become increasing complex and challenging. This makes DG compliance across the supply chain a moving target, one that requires proper training. Unfortunately, for many organizations, DG training is insufficient and ineffective, putting them at risk of serious operational, financial and environmental consequences.

The COVID-19 pandemic has produced and will continue to produce artificial demand and supply shocks, and it will take time to rebalance the equilibrium.

Dangerous goods (DG) shipping regulations can be complex and vary by country and transportation mode, making it challenging for shippers to ensure that all shipments are compliant. This is especially true for organizations with multiple locations or business units, which often have different shipping processes or partners, and manage many variables and priorities across the supply chain.

In a world where supply chain disruption is wide-ranging and unrelenting, supply chain leaders need to embrace and adapt to change, or risk falling behind. To jump the disruption curve, they must lead their organizations to Resilience 2.0, the next level of agility where adaptability and flexibility are built into the very foundation of the company.

The Harmonized Schedule is commonly referred to as our industry’s “universal language.” Its logical and systematic format is not only the basis for identifying goods and their corresponding duties and taxes, but is also for devising trade policies, monitoring controlled goods, developing specific rules of origin, determining freight rates, analyzing transportation statistics and more. Don’t let the 300-plus updates to the schedule in 2022 slow down your supply chain.
 

The ability to optimize routes utilizing algorithms, artificial intelligence and other technology tools has been around for a while, replacing manual tools such as spreadsheets and, in some cases, nothing at all. Dynamic pricing can soon become a reality for last-mile deliveries. By adding dynamic pricing to dynamic routing, a carrier can reduce costs and save time and provide more accurate pricing based on demand.

The less-than-truckload (LTL) market has accelerated its transformation in the last 18 months due to the pandemic. Healthy economic conditions have caused a shift in consumer buying behavior, resulting in more online shopping. The truck driver shortage and labor crunch add to the capacity deficit. In the past, demand was predictable, but with inventory shortages, carriers went from drought to feast.

The growth of e-commerce and retailers’ investments in multichannel strategies are resulting in the need for additional last-mile network alternatives. National last-mile providers such as FedEx, UPS and the U.S. Postal Service, struggled to deliver on time during the early days of the COVID-19 pandemic due to the rapid shift of online ordering. They have since focused on righting their networks. For UPS, in particular, that has meant focusing on profitable growth instead of volume.

The warehouse management system (WMS) market is mature, but these applications need added functionality to keep up with growing customer demand, transportation capacity issues and labor shortages. Current WMS software is insufficient for optimizing processes, such as balancing inventory, labor and space, that will lead to meeting customer requirements for on-time, in-full deliveries. Warehouse resource planning and scheduling needs to be used with the WMS to optimize and orchestrate activities within warehouse operations.

More companies are deploying robots to increase fulfillment speed and capacity, cut costs and survive the tight labor market. are leasing bots to quickly implement game-changing automation, with the flexibility to scale up or down as needs change over time. Robots as a service (RaaS) may be an attractive option, but it’s not without risk.

Higher freight costs, due to the perfect storm of port congestion, truck driver shortage, capacity shortage, and COVID, are here to stay. Shippers are passing these increased costs onto the consumer. To avoid backlash from increased freight costs and a hit on margins, companies are looking at ways to improve efficiencies within their transportation operations to keep costs down. Shippers are reaching out to their carriers to help them reduce costs.

In today’s rapidly evolving environment, where demand is outweighing supply, shippers are prioritizing access to diversified and scaled capacity networks. Shifting away from traditional, demand-reactive sourcing methods to a dynamic capacity network ensures shippers are building sustained resilience and versatility in their supply chains.

Today’s supply chains were designed to optimize efficiency and speed while minimizing costs. Unfortunately, the COVID-19 pandemic exposed crucial weaknesses in the paradigm. Resource shortages, product scarcity and end-to-end traceability gaps have caused system breakdowns and rampant distribution delays. Transformation is needed to create a more forgiving, sustainable supply chain that can better navigate future challenges.

Since 2017, our country has dealt with numerous unprecedented disasters, including a global pandemic. These catastrophes have had the positive effect of inspiring businesses to intensify their disaster preparation and humanitarian efforts. At the same time, they have increased the possibility that companies will want a break from that level of vigilance and selflessness once things return to normal. Now is the time to adopt best practices that will help offset the dangers of disaster ennui and compassion fatigue.

Sustainability has been touted as the next big disrupter that organizations will face after COVID-19. Unlike the unexpected and unplanned disruptions from the global pandemic, however, sustainability risks are certain to materialize in the future. Sustainability and corporate social responsibility have shifted from a “nice-to-do” to a “must-do.” How does an already stretched organization make sustainability and social responsibility a reality? Through a process-first approach.