7 Supply Chain Trends to Look Out for in 2024

As the world grappled with the profound impacts of the pandemic, it became evident that relying on a single nation for manufacturing posed significant risks to global economies. The disruptions in worldwide logistics served as a wake-up call for major powers, prompting the necessity for a 'China +1' strategy.

India, with its combination of cost-effective labor, abundant raw materials, robust technological and scientific infrastructure, a thriving entrepreneurial spirit, and a rapidly expanding economy, emerges as a promising candidate for this crucial 'plus one' role.

Despite these strengths, one formidable challenge looms on the horizon: India's logistics infrastructure. However, encouragingly, government initiatives such as MUDRA (Micro Units Development & Refinance Agency Ltd.) Yojana, SFURTI (Scheme of Fund for Regeneration of Traditional Industries), ULIP (Unified Logistics Interface Platform), PM Gati Shakti, Production Linked Incentive (PLI), and more, signal a clear commitment to establishing India as a formidable player in the global supply chain.

With such significant brushstrokes in the logistics landscape, shippers, transporters, and manufacturers alike need to brace themselves for the upcoming supply chain trends in 2024.

1. ‘Go Green’ for Overall Supply Chains

   Sustainability is no longer a buzzword but a business imperative. With new ESG (Environmental, Social, Governance) reporting requirements circulated by SEBI (Securities and Exchange Board of India) in 2021, the top 1000 listed companies in India (by market capitalization) now need to mandatorily disclose their ESG parameters and share their sustainability goals in the BRSR (Business Responsibility and Sustainability Report).[Source]

   
   

   More than reporting data, the new BRSR format drives companies to work towards sustainability, all while maintaining transparency with investors. Simply put, investors can now assess and compare companies' sustainability risks, analyze their strategies for achieving carbon neutrality, and invest accordingly.
   
   

   Thus, in 2024, expect companies to channel funds and efforts toward carbon emission calculators and other infrastructure that allows them to measure and bolster ESG parameters (like resource usage, air pollutant emissions, GHG (Greenhouse gas) emissions, waste generation, and more).

   
   

   Having said that, E-commerce giants like Flipkart have already taken up a pioneering role in this matter.

   
   

   Flipkart has pledged to ensure net-zero carbon emissions in its operations by 2030. The plan is to increase energy efficiency in their corporate offices, warehouses, and other supply chain nodes by relying on renewable sources like solar.

   
   

   What’s more, understanding that a major chunk of their emissions comes from their network of suppliers and logistic requirements, Flipkart aims at ensuring net-zero carbon emissions across their value chain by 2040.[Source]

   
   

   However, it will be interesting to see how they pull it off, considering the adoption of commercial EV vehicles in India is expected to be merely 20-25% by 2030.
   
   

2. From Linear to Circular Supply Chain Models

   Have you ever played with Legos? Why do I ask? Manufacturers are drawing inspiration from these when shaping future trends in supply chain management.

   
   

   That’s right! Supply chains will soon transition from linear models to circular models. This entails designing products for longevity such that they can be dismantled into raw materials post-usage and refurbished as new products. It involves creating closed-loop systems where materials are continuously repurposed, minimizing the need for virgin resources.

   
   

   And guess what, you have most likely indulged with one such brand that has excessively adopted a circular strategy - it’s IKEA!

   
   

   IKEA’s take-back programs that allow customers to return used furniture for recycling and refurbishing purposes is one such initiative. Other initiatives like allowing the purchase of refurbished furniture, renting furniture (to promote the sentiment of ‘reuse’), and their suit of FSC-certified wood products are other cogs that reduce their impact on the environment.
   
   

3. Tech-Powering Operations with AI

   ChatGPT took the world by storm! It was the start of an AI revolution that aims to increase efficiency and reduce manual efforts on a massive scale. Well, the future of supply chains is also AI.

   
   

   Be it predictive analytics, demand forecasting, or automated decision-making capabilities; AI is set to dictate prominent supply chain trends in the near future. Generative AI’s self-teaching attributes are another advantage across industries.

   
   

   Did you know that Amazon has been embracing AI in multiple supply chain functions for a while now?

   
   

   Right from predictive AI models that analyze customer purchase patterns to predictive analysis for inventory management and restocking, Amazon leverages AI across supply chain touchpoints to ensure optimum customer experience!

   
   

   Well, this brings us to the next most important supply chain trend you need to look out for in 2024 - an increase in infrastructure to capture and analyze DATA!
   
   

4. Data is the New King

   Data is a gold mine for companies looking to scale up operational efficiency.

   
   

   Advanced analytics tools and real-time data streams will enable companies to gain deeper insights into their operations (like route analysis to figure out the safest/quickest passage, gauging demand-supply patterns for different demographics, datasets to train predictive and Gen AI models, and more).

   
   

   However, the supply chain industry has had a long-standing challenge in this regard. Lakhs of data sets are generated in the industry each day, even more so after the advent of online marketplaces and, with them, digital infrastructures like integrated devices, IoT systems, tracking devices, and more.

   
   

   The challenge is siloed data sets from the aforementioned touchpoints, which are difficult to track due to their diverse origins. Thus, solutions like control towers and unified tracking/visibility dashboards will be even more crucial for organizing and analyzing actionable data points in 2024.
   
   

5. Transparency and Visibility On Priority

   Real-time supply chain visibility will be crucial for companies to amass actionable data points. 

   
   Companies will invest in infrastructures that help them capture data regarding product flows in the supply chain ecosystem, visibility on ESG parameters (like Scope 1, 2, and 3 emissions), and real-time updates on in-transit assets to mitigate supply chain disruptions.
   
   This visibility facilitates the optimization of supply chain operations, for example, reducing TAT (Turnaround Time), preventing stock-outs, alleviating the need for buffer inventories, and more.

   
   Having said that, blockchain technology, GPS, GSM, and SIM-based tracking solutions are some ways companies can ensure end-to-end visibility across their supply chain operations.
   
   

6. SCaaS (Supply Chain as a Service) is the Newest Talk in Town

   The growth of SCaaS providers is one of the most recent trends in supply chain management as opposed to traditional models. 

   
   SCaaS providers offer end-to-end solutions, including logistics, warehousing, and fulfillment, on a subscription or pay-per-use basis. This flexible and scalable approach allows companies to adapt quickly to changing market conditions and customer demands.

   
   Moreover, as global economies are pushed towards recessions and investors are skeptical about their spending, SCaaS, with its tech-bolstered cost-effectiveness, will soon become the next best alternative for manufacturers and shippers.

   
   

7. Bolstering India’s Waterway Infrastructure

   One of the most recent and emerging trends in the supply chain landscape is the penetration of logistics in terms of navigating inland waterways.
   
   As the global supply chain seeks diversification and resilience, India's waterway infrastructure is gaining attention as a strategic asset. Initiatives like the Jal Marg Vikas (JMV) project have started being implemented to enhance the capacity and efficiency of India's inland waterways, offering a cost-effective and environmentally friendly alternative for freight transportation.

   
   The JMV aims to build a 1380 km-long fairway covering the states of Uttar Pradesh, Jharkhand, Bihar, and West Bengal that will facilitate the navigation of 1500-tonne vessels along the Ganga-Bhagirathi-Hoogly river.
   
   

   Additionally, the National Waterway -1 is another initiative that will connect east and southeast Asian countries, namely Bangladesh, Myanmar, Thailand, Nepal, and others via the Kolkata Port and Indo-Bangladesh Protocol Route.[Source]

Key Takeaways

As we navigate 2024, several pivotal supply chain trends are reshaping the global industrial landscape. India's ascent as a key manufacturing hub and the emphasis on sustainability underscore the shifting paradigms in the industry. With AI's transformative potential, challenges in data management are also coming to the fore, necessitating innovative solutions. 

Transparent operations, evolving sustainability metrics, and the emergence of SCaaS highlight the industry's adaptability and resilience. Furthermore, investments in waterway infrastructure signify a broader commitment to sustainable and efficient transportation. 

In essence, 2024 promises to be a transformative year for supply chains, driven by innovation, sustainability, and strategic diversification.