The world doesn’t stand still – especially when the supply chain is involved. 

Manufacturing companies, distributors, and consumers depend on raw materials and finished goods being in the right spot at the right time. When problems arise, everyone suffers from delays, higher costs, and short supply. 

Thankfully, 2024 has opened the door for many new and exciting improvements. Whether we’re relying more on data and computers, reducing physical and cyber risks, or targeting customers in new ways, manufacturers are helping drive innovation. 

But what trends can we expect in 2024, and how are they anticipated to change the game for manufacturers, distributors, and customers? Look into our Magic Eight Ball and see what we think will set the tone for next year!

What Does the Potential 2024 Market Landscape Look Like?

The economy has shown massive improvement since bottoming out three years ago. Despite a somewhat choppy 2023 marked with inflation, recession fears, and consumer habits changing, many manufacturers and companies are still focused on continued recovery and maintenance. 

According to information from BlueGrace Logistics, consumers have been hard-hit by recent economic changes, gripping their wallets just a little bit tighter in response to higher costs for everyday materials. The sentiment has also moved into construction, where housing starts have been on the upswing, but builder sentiment has been on the decline. 

For many manufacturers, higher costs and a potentially shaky economy are a recipe for caution. However, the uncertainty also opens the door for manufacturers to grab the bull by the horns and invest in new technologies. 

AI And Machine Learning Take the Stage 

Machine learning and artificial intelligence (AI) are nothing new to manufacturing. However, its application and reach are what will turn heads. 

Earlier this year, apps like ChatGPT and Google’s Bard made AI and machine learning mainstream. The technology has evolved dramatically in only a few months and will keep pushing the envelope. 

At its core, artificial intelligence and machine learning are extensions of us, using vast amounts of data to solve complex questions. With clean data and a steady stream of new information, AI can help manufacturers reduce costs and boost revenue by optimizing supply chain planning, improving forecasting, avoiding risk, and simplifying decision-making. 

That translates into more efficient operations, lower costs, and happier customers in the long run.

Nearshoring and Reshoring Pick Up the Pace 

Decades ago, companies learned it was cheaper to send manufacturing operations overseas because of lower material and labor costs. These days, companies are bringing some of those jobs back home. 

Nearshoring occurs when companies move manufacturing from overseas to neighboring countries. Reshoring brings jobs back to the United States. Both have grown in popularity for several years now, but why?  

Turns out, the supply chain plays a crucial role in both processes. 

Bringing manufacturing facilities closer to home shortens the supply chain, making it simpler and more cost-effective. Although labor costs increase because of higher salaries and other employee expenses, moving operations to Mexico, Canada, or the U.S. improves supply chain resiliency. The shorter travel distance for finished products reduces risk and allows faster shipping over shorter distances.

Recently, Bryce Williford, senior vice president of 3PL solutions for BlueGrace Logistics, discussed the recent uptick in nearshoring projects, saying the moves have proven great for manufacturing efforts in North America. Williford did note that reshoring will likely force manufacturers to think about logistics differently than they may have in the past. 

There is plenty to like about nearshoring and reshoring, but it includes high upfront costs. Besides higher labor costs, companies must consider the additional expenses associated with building new facilities, employee training, material sourcing, and other investments.

Better Risk Management 

Part of understanding supply chain models is knowing where, when, and how to minimize risk, but that’s easier said than done. 

Between COVID-19, geopolitical tension, and rising copper demand, companies have taken a step back and reanalyzed where to invest their time and money. Innovation will always come with a certain level of uncertainty, but being able to make educated decisions supported by data mitigates risk. 

Using lightning-fast computer processing and AI tools, companies can crunch numbers and other critical data faster. In turn, we can make fast decisions with up-to-the-minute data. Access to nearly instantaneous insights lets trailblazers stay ahead of the curve, helping them visualize and mitigate risks, plan for future projects, and develop successful strategies to increase revenue. 

Other risk management methods include constant monitoring and assessment of any upcoming changes in the supply chain, cultivating relationships with a variety of vendors to avoid scrambling during an emergency, and learning how every organization in the supply chain performs their duties. 

Digital Supply Chains Become the Norm 

Digital supply chains combine data supplied by historical and current conditions with analytics and enhanced visibility to create a vibrant, visible system. Basically, they combine the traditional supply chain we know and love, including sourcing raw materials, logistics, and delivery, with high-powered technology that improves collaboration, visibility, and quality. 

Digital supply chains are unique because they take a different approach to the product journey. Instead of focusing solely on the manufacturer, digital supply chains are more consumer-focused, relying on efficiency, speed, visibility, and partnerships to maintain stability. 

Typically, these systems rely on analytics, AI, the Internet of Things (IoT), and cloud computing to quickly deliver end-to-end insights. The impact is a digital transformation promoting collaboration between suppliers, manufacturers, distributors, purchasers, and others to keep products flowing. 

The result is improved efficiency, a more resilient and adaptable supply chain, and happier customers.

Cybersecurity Becomes Table Stakes 

It’s one thing to protect manufacturing facilities from physical threats. It’s another to protect proprietary data, customer information, and websites from unseen vulnerabilities. 

Companies and their customers produce, consume, and curate incredible amounts of data. Unfortunately, supply chain technology can’t always protect itself, and all that data means more protections are needed to prevent cyberattacks and other dangers from impacting the company. 

Today’s world is almost entirely interconnected – IT teams should be armed with the right tools to beef up security, maintain strict safety standards, and pressure test the system across every bit of their digital landscape. 

Part of a good cybersecurity program includes high-quality digital surveillance tools, but it also relies on workers not becoming weak links. Regular training and vigilance can help manufacturers and other companies avoid accidentally opening the door for bad actors while simultaneously giving IT teams more eyes.

More Diversified Investments 

Don’t be surprised by this one – increasingly complex systems require more money to properly establish and maintain. 

Although investments into supply chain management startups have plummeted in 2023, upgrades into company specific systems will continue to thrive. Upgrades to the supply chain include better data crunching and machine learning software, facility expansion or relocation closer to target markets, and vertical integration. As manufacturers and distributors address increasing customer demand, investments will remain critical parts of the process. 

Investments stretch beyond physical components, too. Companies on the cutting edge are eliminating mundane tasks through automation, allowing workers to build interpersonal and other soft skills through courses, training, and leadership programs. 

Beyond that, manufacturers are pushing for more sustainable practices to reduce their environmental impact. This could mean better scrapping programs, more sustainable shipping practices using lighter, more durable materials, or even switching their fleets to cleaner fuels.

Supply Chains Become Competitive Advantages 

One minor slip in the overall supply chain can throw everything off for weeks or months. Larger disruptions can bring the entire economy to a grinding halt. 

As personalization and customer service and enablement initiatives improve, tight and efficient supply chains are poised to become vital selling points for manufacturers and distributors. Companies with strong supply chain partnerships across multiple vendors can react and adapt to market changes much faster than their competitors because they have visibility across the entire supply chain.  

More resilient supply chains also make it easier to meet SLAs and other customer demands and improve the company’s industry standing.

More Visibility, Better Results 

When conditions are clear, you can generally see much farther. Similarly, better visibility into the supply chain makes for better forecasting. 

Data controls every decision, and anticipating when things might happen makes those decisions easier. When manufacturers can spot trends and issues in real-time, they can use that information to alert others further along the chain. 

The result is a program that increases operational efficiency across the system while reducing overall operational costs and delays tied to incorrect, late, or incomplete data. 

Visibility also works from the outside looking in. When customers know where materials and products are sourced, they can find materials that meet regulations and rules tied to federal programs like the Buy America, Build America Act (BABA). It’s critical information supply chain managers need to piece together the source of every material in the production process.

The Omnichannel’s Role 

Customers have seemingly infinite ways to interact with the brands they do business with. With that said, companies need to meet customers where they are, whether online, over the phone, or even within the four walls of their facility. 

Logistics should be on point throughout the supply chain. Delays anywhere in the system can impact deliveries, lead times, sourcing, and general availability. And as they say in sports, the best ability is availability. 

Investing and growing omnichannel operations means knowing how inventory is managed, what materials, components, and products are available, and how to personalize experiences based on the customer. 

True to its name, the omnichannel stretches across several arenas, but centralizes every data stream and control point into a single system. A robust omnichannel makes for better CRMs, ERPs, and customer profiles, leading to better customer profiles based on their interests. 

Beyond selling, manufacturers can get information to customers and prospects through digital and analog methods, ranging from social media, emails, and websites to sales calls, trade shows, and demos.

No One Has A Crystal Ball 

As we saw in 2020, sometimes the best-laid plans get tossed because of factors outside our control. Although we hope to see these trends take off in 2024, no one can predict the future. 

With that said, it’s not a stretch to say technology will keep shaping how companies look at supply chain disruption. Whether it’s using AI and machine learning, embracing the omnichannel, or beefing up cybersecurity, technology can be a game-changer for those who use it correctly. Additionally, understanding risk mitigation and developing competent investment strategies sets the stage for continued growth. 

The goal is simple – create and maintain efficiencies that take the stress out of supply and demand. Adapting and streamlining the supply chain will reduce delays, improve strategies, engage workers in new ways, and impress every customer.

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