Future supply chains will be more agile and responsive

Accounting for approximately 17 percent of GDP and 14 percent of employment globally, the manufacturing sector is the engine of global trade – 70 percent of the entire global trade volume stems from manufacturing companies.

Against this background, a report released by DHL titled “Engineering & Manufacturing 2025+ – Building the World” highlights that supply chain concepts need to be regionalized, interconnected, more resilient and sustainable as well as more agile to comply with trends such as shifting markets, customization and increased compliance.

The report predicts that supply chain managers will have to deal with even more complexity in the future as customers expect a broader, more customized product portfolio. In combination with shifting growth markets, more suppliers, a lack of qualified workforce and new technologies, this will cause companies to rethink their current supply chain models.

To help organizations exploit these trends for future growth, the report identifies and explores the major transformations anticipated by 2025 and beyond – the switch from production sites to smart factories, the adoption of more sustainable manufacturing processes, the development of new customer-centric business models, and greater innovation through sometimes unexpected collaboration.

Regionalized supply chains require greater resilience
According to the report, companies have begun to restructure their production processes and adapt their business models to become more customer-centric and competitive. In the future, this will also include intelligent and sustainable manufacturing and new collaboration models along the value chain.

As emerging countries are prospering and companies shift their production closer to these markets, supply chains must adapt. A global network of more regionalized supply chains will be required to speed delivery and respond immediately to changes in customer demand.

The greater volatility in customer demand consequently also implies that future supply chains must become more resilient. Companies will be forced to constantly compromise between efficiency and redundancy with contingency planning becoming imperative.

As the demand for supply chains to become more agile, fast, efficient and responsive, solutions such as 3D-printing, smarter inventory management and inbound-to-manufacturing and lead logistics provider concepts could come more into play.

Supply chain sustainability will be key
Customers increasingly choose their suppliers and products based on their ecological performance. To reduce their environmental impact, the report recommends that companies increase visibility along the supply chain to track carbon emissions of all suppliers.

Part of this solution is connected and integrated supply chains: By analyzing data gathered from suppliers and their sub-suppliers, supply chains could be connected end-to-end and in real time. This would lead to higher visibility and improved collaboration across various supply chain stages.

Download the report.