Small companies are still excluded from supply chain laws but must deal with them daily. The new "Supply Chain Directive" addresses environmental protection and human rights compliance.
Fremont, CA: Supply chain management is shifting from cost-cutting to addressing skilled worker shortages, sustainability, and resilience, according to industry experts, research, and customer data from around 100 fashion and fast-moving consumer goods brands using the OSCA tool, emphasizing the importance of these aspects in 2024.
The most essential SCM trends in 2024 are;
1. Skilled Labor Shortage Forces Action
The shortage of skilled labor puts industrialized companies under pressure, with demographic changes increasing management pressure. Companies must offer attractive conditions and career guidance, cater to Generation Z's needs, become more efficient, differentiate their recruitment strategy, offer retention programs, and show perspectives through flexible working hours, parental leave, training, and education campaigns.
2. Sustainability Laws and the Circular Economy Force Better Processes
Sustainability and CSR are becoming top concerns for large corporations and SMEs. The EU advocates for a comprehensive supply chain law, while individual states implement new laws. Few countries prioritize carbon dioxide emissions reduction and compliance with the Supply Chain Act. Executives are exploring circular economy strategies to reduce waste. Small companies are still excluded from supply chain laws but must deal with them daily. The new "Supply Chain Directive" addresses environmental protection and human rights compliance.
3. Building Resilience with Concurrent Cost Pressure
Supply chain managers prioritize cost reduction amid economic changes like extreme weather, political crises, and pandemics. Resilient supply chain management is crucial for quick recovery. Strategies include diversification, building a broad portfolio of suppliers, and involving employees in revenue and cost development. This approach ensures speedy recovery after external disruptions.
4. Transparency Is Becoming Increasingly Important
Transparency is crucial for resilient supply chains, enabling quick identification of affected parts. Companies are focusing on flexibility and trust-based collaboration due to economic volatility. Modern IT tools can help share data, pool resources, and make quick decisions in dynamic demand fluctuations. Companies using IT tools and algorithms are ahead of competitors who rely on emails or spreadsheets. Data exchange is ideally real-time using specific access rights groups.
5. Supply Chain As a Service Becomes Crucial To Competition
Software as a Service (SaaS) is gaining popularity for businesses outsourcing supply chain tasks like manufacturing, distribution, procurement, logistics, and transportation management. The future digital supply chain will increase the need for outsourcing using Supply Chain as a Service (SCaaS) or services from Fourth Party Logistics specialists.
