SUPPLY CHAIN TRENDS FOR 2022

What can we expect for 2022? The Good The Beauty, The Bad, and The Ugly?

Supply Chain Trends for 2022
Supply Chain Trends for 2022

Depending on who you ask about supply chain, you may hear that it has found workarounds to ensure the flow of goods and services across borders again. Or it has not.


Whichever response you hear, one thing is for certain, supply chain is not what is used to be, pre-pandemic. As this article is being written, the latest casualty in a string of consumer electronic makers is Apple.


Nikkei Asia had the scoop about the latest iPhones and iPad devices not being to make it into Christmas stockings this festive season, due to a 'perfect storm of pandemic factory lockdowns, logistics troubles, and energy generation squeezes.'


Up to over 2000 components goes into the making of an iPhone device, and Nikkei Asia reports that the smaller, cheaper components are the worst affected by supply chain disruptions.


As a result, total production of iPhone 13 units till end of 2021 was only about a maximum of 230 million units, instead of an initial target of 245 million, a steep shortfall of at least 15 million units.


Needless to say, this is a scenario that is playing out not only for consumer electronics, but the manufacturing industry overall - automobiles, machinery, and more.


What can we expect for 2022?


We take a look at Forrester’s predictions for 2022.


The analyst company starts off their report by pointing out that disruptive forces is going to necessitate bold decisions. Supply chain disruption, and needing to capture customer trust, are just two in a long list of issues to address.


From Forrester’s predictions, we discover some notable points which we share below. Taken with a pinch of salt or not, these points are useful to know as we head into a New Year that has not quite settled into any one Normal.


Pandemic-accelerated digital transformation won’t slow down


It should come as no surprise that the pandemic changed everything, especially among those digitally advanced companies, those transforming, those wishes they had done so earlier, and those that still scrambled and struggle to digitally transform as they were caught off guard by the pandemic.


In 2020, 85-percent of firms viewed digital as nice to have. In 2021, every company learned that digital is critical to business success.


Leading companies are equipping their employees with advanced software and technologies like robotics automation, and advanced digital platform such as PaaS and SaaS.


And customer experience needs to follow suit. According to a forecast by Forrester, online retail sales in Asia Pacific will grow from $1.5 trillion in 2019 to $2.5 trillion in 2024 with China remaining the largest market, 66-percent of Chinese consumers will buy more things online than normal.


Hence, there is higher expectations that digital experiences will work well.


Anywhere commerce and its building blocks

Big annual online sales pioneered by online Chinese marketplaces like Alibaba/Tmall and JD.com, give some indication of how much hold these marketplaces have over merchant brands that populate their online ecosystems.


And these merchant brands leverage these ecosystems that are tightly integrated with payments, logistics, delivery, and more.


However, Forrester also notes that Western merchant brands are going to spend 2022 working with niche marketplaces, and even mini programs via companies like WeChat, Douyin, and Little Red Book.


The priority is to make direct relationships with customers, and to ‘pursue presence in every possible shopping moment’.


This will lead to investments into software enabling digital commerce building blocks like warehouse management system, logistics software, fintech, inventory control, and more.


Digital society and trust

APAC is ahead of other regions implementing digital identity, digital currency, and data interoperability. Notable initiatives are China’s with their digital yuan, Singapore-Australia and their digital economy agreement, and India-Singapore efforts which link payments.


This is nascent opportunity to leverage these digital initiatives to offer differentiated capabilities to customers and gain their trust.


Persistent and personalised digital engagement

‘Always on’ is the digital marketing strategy for 2022. About 17-percent B2B buyers say that competence demonstrated by marketers during the buying process is most significant driver of purchase choice.


Hence marketing technology’s portion of budget spend (for example on autonomous and automated solutions with complex tech stacks) will increase from 19-percent to 25-percent in 2022. But lack of buyer insight will blunt these efforts; more customer-centricity needs to go into planning and execution processes.


Automation framework

Automation is the new weapon every company needs to have in their arsenal.


Automation tech like robotic process automation (RPA), robotic warehouse management using Autonomous Mobile Robot(AMR), integration platform-as-a-service (iPaaS), Software as a Service(SaaS) providing auto upgrade and enabling users to always use the latest version, and digital process automation will complement an advanced automation framework that builds, orchestrates, and governs workers as well as links AI and automation components and innovation programmes, to achieve desired business outcomes.


Changing work trends

Workplaces are gradually opening, with over 60-percent of APAC firms preparing to bring vast majority of workers back to office full-time.


For the region’s large manufacturing sector, only 32-percent of workers can work anywhere, while the balance need to be on-site.


Supply chain risk

The Business Continuity Institute (BCI) shared that 27.8 percent of organisations surveyed reported over 20 percent supply chain disruptions, an increase from 4.8-percent in 2019. In response to this, organisations seek to make their supply chains more resilient and transition from ‘just-in-time’ to ‘just-in-case’ contingency.


This has led to organisations doubling the size of their third-party ecosystem, which leads to third party security risk. Forrester data shows 38-percent of security pros in APAC sharing that their organisation experienced security incidents involving supply chain providers in the past 12 months.


Organisations seek to make their supply chains more resilient and transition from ‘just-in-time’ to ‘just-in-case’ contingency.

The supply chain is and will continue to evolve. These companies that are doing well will ensure their current tech stack includes risk assessment, supply chain management and advanced supply chain execution, real-time intelligence and business continuity management.


As the supply chain continue to evolve, one thing is for sure, companies need to keep up to the pace by digitally transformation or be left behind.

By Cat Yong, posted on EnterpriseItNews. (https://www.enterpriseitnews.com.my/supply-chain-trends-for-2022/)