• 05-03-2022

logistics and supply chain industry: Expectations in 2022

The Covid-19 pandemic has caused devastation among supply chains all over the world. Over the past two years, the two waves have caused numerous problems, starting from procurement of raw materials to getting the finished product to the customer. However, at the same time, there have been a few learnings that can have long-term benefits for the industry.

Logistics sector outlook for the year 2022

All indicators so far point toward growth across organized manufacturing & core-sector organizations. Demand for Logistics & Transportation will also have a corresponding change. The large shippers will reduce risk in supplies by increasing the control they exercise on secondary transportation (intra-state & intra-region) to ensure product availability at consumption centers.

One good thing that came out of the pandemic is that it has accelerated technology adoption. The momentum for technology adoption by transportation & warehousing will continue to increase at an accelerated pace. The technology focus will be around cloud-based solutions for the digitalization of the transportation process. All the growth in transportation will be mainly distributed among organized players within the logistics Industry - preferably such organized players that are tech-enabled.

Understandings from the pandemic

One of the significant changes has been the reduction of supply chain redundancy. For years, just-in-time manufacturing and the concepts of Lean were popular among companies. But the pandemic has shown that perhaps such ideas can no longer be sustainable.

Instead, companies will build resilient supply chains - holding extra stock and maintaining multiple suppliers are some of the steps companies take to keep their supply chain resilient to outside impact. These redundancies can give some much-needed breathing room for organizations when they face any disruption in the future.

Another learning from the pandemic has been the need for sustainability in the supply chains. An organization must be aware of its environmental, social, and economic impact. A sustainable supply chain can help organizations reduce their total carbon footprint. At the same time, optimize their operations to increase their profitability and reduce their costs. Delhi State is the first geography to implement this with solid regulatory support.

Cross-functionality was a significant development thanks to the pandemic. Organizations have learned that communication between all parts of the supply chain is equally important to help ensure there is a robust end-to-end system in place.

The adoption of technology has been another development due to the pandemic. Organizations are investing in technologies to have end-to-end visibility of the entire supply chain. This makes it easier to respond to disruptions, with easy access to information helping with informed decision-making. They have also insisted that their vendor partners implement technology solutions to facilitate supply chain visibility. Both the sell-side and buy-side need supply chain visibility to keep an eye on stock levels and consumption rates. This way, there can be better planning in terms of inventory and productivity.