Final 2021 Supply Chain Management Trends to Remember

Unhappy returns.  Online shopping may be a highly convenient way to get just about any product that’s sold, but given the somewhat impersonal nature of this purchasing channel, those same products are prone to being returned. As the year winds its way to a close, business owners were expecting to see more customers sending back their merchandise, further complicating an already highly unstable supply chain. Nearly two-thirds of respondents in a recent Reverse Logistics Association survey anticipated an increase in product returns. Additionally, more than half of those same participants said they expect their costs stemming from those returns to rise as well. Tony Sciarotta, executive director of the Reverse Logistics Association, noted that return activity had intensified throughout 2021, which has contributed to the supply chain crisis. “The number of returns and costs associated with them continues to climb adding to an already tough environment of rising freight costs, capacity constraints and delays,” Sciarrotta says.

Constrained networks. Brian Whitlock, Senior Director Analyst with Gartner, told SCMR in an end-of-year interview that global transportation markets continue to be challenged across all modes, with high demand putting pressure on transportation capacity through 2022. “In many cases,” he says, “transportation networks are more constrained than ever, with no data to indicate that we’ve turned the corner. While supply and demand dynamics are important, shippers also need to pay attention to ongoing risks that could push the recovery timeline or could exacerbate current conditions. What can we bet on in 2022? Continued COVID-19 outbreaks and lockdowns; China’s rationing of coal and diesel fuel impacting manufacturing and supply chain infrastructure; port labor disruptions; weather events; labor shortages; high energy prices…and more. It’s likely the market conditions we see today will be around for a while.”

Technology investments. Underlying drivers expected to make an impact on IT investments in the supply chain in 2022 and beyond have been another area of recent conjecture. According to Simon Ellis, program vice president, Global Supply Chain Strategies at IDC, disruption had been front and center again in 2021 and has largely validated the supply chain transformation journey that so many companies are on. “In fact, companies that have aggressively pursued business transformation are outperforming those that have not,” he says. “The supply chain will – and must – continue on its journey of almost unparalleled levels of change with digital transformation at the center of efforts to both improve efficiency and effectiveness and be resilient to further, inevitable disruption.”

Seaway surge. U.S. Great Lakes ports and the St. Lawrence Seaway reported a rush of activity late last year as manufacturers stockpiled raw materials and businesses took advantage of the congestion-free waterway to export overseas. “U.S. Great Lakes ports have roared back this year – recovering from major 2020 declines in traditional cargoes like iron ore and steel but also developing new business and seizing on opportunities for infrastructure investment. This story of recovery and renewal is mirrored in the latest St. Lawrence Seaway cargo numbers,” said Bruce Burrows, president and CEO of Chamber of Marine Commerce. “Throughout the pandemic and amidst global supply chain disruptions, Great Lakes-Seaway shipping has once again proven it’s a reliable, ‘safe harbor’ in a storm.” According to the latest figures from the St. Lawrence Seaway, general cargo shipments, including steel, aluminum, and oversized machinery were up 71% last year.

Nervous consumers. A new survey shows that consumers are not optimistic that the new year will bring much improvement. According to the consultancy, Supplyframe, 47% of Americans believe the shortages will continue through 2022. And even this estimate is optimistic, as data shows electronics supply chain shortages are expected to last into the first half of 2023. In addition, 52% of the Americans surveyed said that they understand the delays, but are frustrated that they are happening. Furthermore, 25% said that they feel bugged about the wait times and think that businesses should factor in delays for their purchase orders. Only 10% said they are willing to wait longer than two weeks for shipping, despite widespread news coverage of supply chain issues. This illustrates that manufacturers’ current approach to supply chain risk management is not sustainable, says Steve Flagg, CEO and founder of Supplyframe. “Supply chain constraints have hit a level not experienced in more than 30 years. Manufacturers can’t simply ride out these challenges,” he concludes.

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