The future of supply chains: key trends and technologies 2024

The year 2024 marks a decisive phase in the evolution of supply chain management (SCM). Technological innovations such as artificial intelligence, automation and the Internet of Things will fundamentally change the way supply chains are managed and optimized. This development goes hand in hand with ongoing challenges such as the growing shortage of skilled workers and the increasing focus on sustainability. This article highlights the key trends and technologies that will shape and transform SCM in 2024 based on analyses by SCM expert Ralf Düster of Bochum-based software developer Setlog and management consultants KPMG.

Complex challenges in modern supply chain management

SCM will face complex challenges in 2024. In addition to the ongoing shortage of skilled workers and the pressure for more sustainable processes, topics such as building resilience and transparency are playing an increasingly important role. Companies must find innovative solutions to meet these challenges. The use of advanced technologies such as AI and IoT offers promising approaches here.

Generative AI, data analytics and the Internet of Things (IoT) are leading to a paradigm shift in supply chain management. These technologies enable faster responses to requests, proactive problem solving and a reduction in errors and inefficiencies. At the same time, they create greater transparency and traceability, making organizations more resilient to future supply chain disruptions.

This resilience is particularly important in times of crisis such as the current one, when priorities must shift from cost reduction to supply chain management that responds quickly to pandemics, extreme weather events or political events. The desired resilience can be achieved through diversification within the supply chain, which consists of a selection of suppliers for sensitive components and the use of different supply routes. A combination of global and regional value chains is important here, which benefits from both the opportunities of globalization and local networking.

There is no improvement in sight for the shortage of skilled workers - the opposite is the case. Companies are therefore more in demand than ever before to offer their future employees attractive framework conditions. As Generation Z insists on flat hierarchies and modern IT technology in everyday working life, both should become a matter of course. At the same time, it is important to increase efficiency within the company and make workplaces more attractive.    

Adapting to technological change

To be successful in this rapidly changing environment, companies need to understand and embrace the latest technology trends. This includes learning about AI and distributed ledger technologies, low-code platforms and planning for an electrified fleet future.

The integration of AI and automation into SCM processes enables companies to react more quickly to market changes and operate more efficiently. Generative AI can help ensure procurement and regulatory compliance, optimize production processes and enable virtual communication in logistics. However, it is also very important that companies use these technologies strategically to effectively improve their core business processes. At the same time, central business processes need to be strategically rethought and redesigned, taking into account the opportunities created by the use of generative AI.  

In addition, companies need to focus on obtaining relevant and well-managed data in order to make the most of their technology investments and meet increasing obligations in the areas of sustainability and ethical corporate governance. The latter affects not only corporations, but of course also SMEs. In Europe, the Supply Chain Act is becoming more and more important, in the USA the Uyghur Forced Labor Prevention Act (UFLPA).  

The role of data in SCM

Data plays a central role in modern SCM. The challenge, which has been exacerbated by the use of IoT devices and digital tracking systems, is to efficiently manage the vast amounts of data and use it to make informed decisions. A solution-oriented approach can help to proactively address data quality issues and gradually refine and improve data sets. It is crucial to merge in-house systems and reduce the number of silos. On the one hand, this increases effectiveness through a faster flow of information; on the other hand, it reduces IT costs because the requirements for maintenance and interfaces are reduced and fewer updates are needed.

Conclusion

In 2024, SCM will reach a new dimension through a combination of technological advances and an increased focus on sustainability and efficiency. Companies that recognize and adapt to these developments early can reap the benefits of a more advanced, resilient and transparent supply chain.

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