Why new technologies are key to supply chain sustainability in the face of increasing challenges

In recent years, supply chain challenges have increased as an uneven post-pandemic recovery has been juxtaposed with geopolitical tensions, new economic challenges and a growing climate emergency. While these shortages are likely to persist for the foreseeable future, new technologies could provide those affected with much-needed peace of mind.

So far in 2024, geopolitics and technological advances have become increasingly important issues in supply chain management and the way business is conducted across the industry.

According to the 10th annual research paper “Supply Chain Management Priorities and Challenges” released by APQC earlier this year,
fewer organizations of the 350 professionals surveyed worldwide were able to achieve their business goals in 2023. But as maturing technologies like generative AI, blockchain and process automation continue to provide new use cases for businesses, help could be on the way.

Unprecedented supply chain challenges

The state of global supply chains became clear in early 2024 when attacks and delays in the Suez Canal, as well as drought caused by the ongoing climate emergency in the Panama Canal, disrupted global supplies for a wide range of companies.

By sea transport accounts for around 80% Due to the global movement of goods, there is a risk that these problems, in addition to their longer-term impact on the environment, will also permanently damage the sustainability of companies.

Additionally, geopolitical tensions have led to a rise in tariffs, bans, and various other trade restrictions
disturb the pace of supply chains. With no signs of conflict flaring up and worsening tensions easing, companies may need to quickly adapt to slowing supply chains.

This pressure results in an undesirable series of additions to a global supply chain crisis This is due to severe delays during the COVID-19 pandemic, widespread labor shortages and reliance on legacy industrial infrastructure.

In the United States, these complications have led to clogged ports and warehouses at full capacity.

Finding solutions in technology

Despite increasing bottlenecks in the industry, technological innovations are helping to make supplier management and the global trading network in general more resilient.

In a technology boom that will herald Supply Chain 4.0, growing automation and connectivity tools will have a transformative impact on the world of international logistics.

Artificial intelligence (AI) and the Internet of Things (IoT) will drive this change. Recent developments in blockchain have also catapulted the technology to the forefront in the world
Struggle to optimize supply chain management.

These technologies promise to automate logistics management, provide real-time insights and streamline essential processes at every step of the supply chain.

Additionally, there is evidence that companies have been quick to adopt these innovative new tools. Accordingly
Economist Impact dataAccording to the Trade in Transition report, 98% of executives surveyed said they are already using AI tools to optimize at least one aspect of their supply chain operations.

Digitalization as the key to optimization

When it comes to supply chain and supplier management, digitalization is key to tackling an increasingly complex industry.

Data from Catena Solutions’ Supply Chain Trends & Insights: Innovation report suggests that companies nearly doubled their average spending on supply chain innovation in 2023
67% of CEOs intend to to increase their investments in disruption detection and innovation processes in the future.

While these processes were once considered a luxury, labor shortages, adverse weather conditions, geopolitics, inflation and rising consumer demands have made digitalization an essential aspect for all organizations directly involved with supply chains.

To address the complicated landscape in 2024, we are likely to see innovation
Directly improve supply chain visibilityoptimize logistics and improve adaptability.

There are many new use cases that have brought automation into the supply chain management landscape. When it comes to the provider
PayoutsThe use of real-time AI-driven payment and analytics platforms can help ensure that all actors within a chain are paid on time, while discrepancies are quickly identified and resolved.

This means payout to specific providers can be made in a fully compliant manner, while a bespoke analytics suite ensures companies can track their relationships across every step of the supply chain.

Blockchain in the supply chain

Blockchain is likely to be one of the most powerful technologies that will ensure greater sustainability in supply chains in the coming years.

As an immutable ledger, blockchains can help provide crystal-clear clarity for tracking the provenance of goods and building trust throughout the supply chain.

As the diagram above shows, any changes or transactions on the blockchain are subject to network validation, which requires consensus before a new block is added.

Because all transactions recorded on the blockchain cannot be tampered with or edited, the technology creates a more holistic audit trail that makes this possible
Help organizations track vendors much more comprehensively than traditional accounting.

Additionally, blockchain technology supports smart contracts that are automatically executed when a certain set of criteria are met. This means payments can be linked to quality control teams to ensure issues or faulty components are quickly and accurately identified and resolved before a transaction is made.

When it comes to identifying counterfeit goods and fraud in high-risk industries, blockchain can help provide greater transparency, trust and security for both organizations and suppliers, without relying on manual processes to ensure quality.

The growing role of AI

The ongoing boom in generative AI has helped uncover some of the biggest and most transformative opportunities for supply chain management. Through the technology’s ability to analyze large amounts of data and apply algorithmic solutions, AI can provide comprehensive insights and recommendations for business decision markers.

Actionable insights leveraged by AI will help companies optimize their supply chain management, strengthen resource allocation, and improve efficiency in the near future.

Artificial intelligence is also one valuable asset in the decision-making process and can help eliminate human error across the landscape. For example, orders can be automatically generated based on fluctuations in demand or emerging consumer trends for products. This means AI can predict inventory shortages long before they become a problem and place the necessary orders to avoid disruptions.

The age of the cobot

Robotics will also play an important role in the development of supply chains, and collaborative robots, also known as cobots, will be able to do this
Supporting human warehouse workers to optimize time-intensive tasks that may be prone to human error or misjudgment.

Using cobots in warehouses across the supply chain can help improve task efficiency, accuracy, throughput and workload management.

Crucially, this additional help at a key stage of the supply chain means employees are less prone to errors in high-pressure, deadline-driven work environments. In addition, these Internet of Things (IoT) cobots can work automatically to record inventory depletion and even independently fulfill new orders based on the outflow of goods.

Anticipating new frontiers in supply chain management

With the digitalization of the supply chain, many new technologies will come into play to address the industry’s growing problems on a global scale.

More mature technologies such as artificial intelligence, blockchain and process automation will come together to deliver greater value to businesses and reap the benefits of lower-cost and resource-efficient processes.

By using these technologies, companies can continue to achieve higher levels of trust and efficiency in supply chains, which may become more complex over time as geopolitics, macroeconomics and climate change continue to be felt.