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Twelve Post-Pandemic Supply-Chain Trends for 2021

Photo: Bloomberg

Article: Supply Chain Brain

As vaccines roll out more broadly, and countries begin to get the coronavirus under control, attention will turn to the recovery and a return to normal operations. The supply chain will play an integral role in this effort, and will itself emerge in a different shape, with COVID-19 leaving a lasting legacy on many areas of transportation and warehousing.

Following are the 12 most significant trends expected to shape the industry in 2021, and how those trends will influence companies’ strategic plans in the coming year.

Three trends accelerated by COVID-19. The global pandemic applied pressure to the supply chain in ways not previously seen, forcing many companies to look toward third-party experts, advanced digital capabilities, and accelerated e-commerce operations.

  • Outsourcing. In 2020, many companies recognized that outsourcing their supply-chain activities to specialists — particularly those with an integrated, end-to-end offering — allowed them to reduce risk, increase flexibility, focus on their core business, and respond more quickly to changes in the market. This trend is expected to continue into the new year.

  • Digitization. The drive toward greater automation was already underway, but the importance of digitization was reinforced amid the pandemic. Companies that made investments in digital technologies were able to quickly respond to fluctuations in demand, while also enabling productivity increases to absorb additional volumes, even with strict social-distancing protocols in place.

  • E-commerce. The huge increase in online shopping will remain at a higher level than originally anticipated post-pandemic, speeding up e-commerce adoption by nearly a decade in just a few months. Coupled with unpredictable consumer behavior, this trend has made it more difficult to forecast, and has underscored the value of being able to react quickly o customers’ needs and demands, through a well-thought-out strategy and physical infrastructure roadmap.

Three trends expected to resurge after COVID-19. With so many lives on hold during this difficult time, COVID-19 has slowed the progress of some existing trends that are expected reemerge in 2021.

  • The labor shortage. While many industries closed down and unemployment rose in 2020, logistics providers needed workers. As the economy begins its recovery, talent-gap pressure will return with a vengeance, and attracting and retaining people with creative H.R. solutions and a positive working environment will once again become the primary competitive battleground in the supply chain.

  • Intelligent forecasting. Consumer behavior was erratic during the pandemic, making it difficult to use historical trends to forecast and manage inventory. As we return to a more stable environment, artificial intelligence and machine learning will reclaim their place at the forefront of advanced analytics and forecasting.