No one knows for sure what might happen to the supply chain in 2022. It’s a complex brew with far too many variables outside of anyone’s control. Climate change, geopolitical challenges, and an ongoing pandemic (to name a few) are colluding to create a murky vision for 2022.
All that said, here are some possible outcomes.
The Chaos will Continue
To understand what might happen in 2022, consider how things have evolved over the last 20 years. Despite multinational supply chains continuing to lengthen and gain complexity, many companies still appear to be focused on costs, ignoring many of the “softer” aspects of shipping, like ease and speed. Shippers are also dealing with decreasing inventory. Production methods like “Just In Time” – or lean manufacturing – created to reduce time in the system can work well when times are good, making companies more efficient. When things go sideways–as we’ve seen over the last couple of years – safety stock practices can seem more appealing.
As 2022 rolls in, there are increasingly long supply chains with less safety stock. The world, to say the least, is also increasingly chaotic. Manufacturers moving products are subject to extreme weather everywhere – typhoons in the South Pacific, hurricanes in the Gulf of Mexico, or tornadoes in the Midwest. That’s in addition to geopolitical challenges further complicating the landscape.
Thanks to the foundational changes spurred by e-commerce, consumer expectations are also higher than ever. They can buy in various ways and expect choice and convenience in most cases above all. The pressure on company supply chains is immense. More efficient shipping alternatives can make a huge difference in a company’s potential for success and mitigate the impact of unexpected events.
Supply Chains will Become Less Transactional, More Strategic
Calling it a supply chain by definition implies links that could break. It might make sense to think of a more flexible material that allows a natural evolution rather than stoppage or pauses. It’s the difference between rigidly dictating circumstances and rolling with the punches.
What may happen in 2022 is a movement toward strategic supply chain management. It starts with a shift of thinking from “selling” something to “providing” something: providing means the job isn’t done until the product is in hand and the customer is satisfied.
In my experience, the current shipping industry is unidirectional, and the assumption is that each player in the chain must see itself as a singular player. This year, the industry may blow up that assumption and bend toward bidirectionality. Retention – retaining strategic partners, rewarding the best carriers, keeping employees happy, thinking long term so people are invested in a mutually beneficial future – could become a priority.
By creating strong relationships with other links in the chain – via software, communication tools, repeat business, and more – you can reduce the possibility of a breakdown.
Fulfillment could Become a Key Driver of Customer Loyalty
Loyalty can come from many sources – namely, “awesomeness,” price, and ease. While “awesomeness” and cost were once considered the one-two punch, future consumers may focus on companies that can supply products instantly (if not sooner).
Ease could soon be the number one differentiator between a successful business and an unsuccessful one. The chaos of the last few years could drive decisions toward anchors – sticking to things that just work. The thinking will be: if I got it once quickly, and it was a reasonably good product, I’ll try it again in the future to avoid a hassle.
Bottom line: Brand loyalty can be reinforced by the ability to deliver. That doesn’t happen without a vibrant, working supply chain.
One thing we know we can expect in 2022 is more surprises; they can come from a million corners. Businesses must invest in supply chain management to understand what’s happening and quickly respond. Agility might just be the most sought-after superpower in the New Year, and, luckily, it is not out of reach.