Optimize your supply chain so you have the visibility to make accurate inventory decisions. What inventory management trends are affecting your business?
Supply chains remain an interconnected complex ecosystem, with each link in the chain bringing its challenges. Erratic customer demands, shortages of raw materials, and increased transportation costs add pressure on suppliers to reduce lead times, expand their product lines, and offer personalized services and new payment terms.
For businesses to remain relevant today, they must be able to respond and recover quickly from disruption. Research states that 87% of supply chain professionals plan to invest in resilience over the next two years. Businesses today need to start investing in the right demand planning tools to optimize their supply chain.
What does that mean for your business? We will continue to select and showcase the most impressive statistics that highlight inventory management and supply chain trends. By staying up to date on these trends, you can adjust your planning and remain competitive, making the necessary changes to ensure you optimize your supply chain and have that visibility you need to make data-driven decisions for your business.
We share insights that will help you better understand:
Inventory management trends
You need accurate, timely, and reliable data to help optimize your inventory and adapt to supply chain disruptions. Staying up to date with the latest inventory management statistics gives you the right information to review and potentially innovate your inventory processes.
- Reducing stock-outs and overstocks can lower inventory costs by 10%. [Zebra]
- The cost of inventory distortion in 2020 amounted to US$1.8trn in 2020. [IHL Services]
- By 2030, there will be a 25% decrease of Europe’s vehicle selling inventory from 280 million to 200 million vehicles. [PwC]
- 74% of businesses have experienced delays in shipments and much longer lead times. [Capgemini]
- 48% of businesses are reevaluating their warehouse locations due to shifting trade patterns resulting from changes in the US economy: taxes, tariffs, and the return of manufacturing. [BlueGrace Logistics ]
- 72% of retailers plan to reinvent their supply chain with real-time visibility enabled by automation, sensors, and analytics. [Zebra]
- 85% of distributors reported out-of-stock shortages in the chemical industry. [National Association of Chemical Distributors]
- A Bain and Microsoft survey indicates that 56% of respondents plan to increase their investment in demand forecasting and predictive planning in 2021. [Bain & Co]
- 68% of businesses are looking to reduce their reliance on working with only one supplier, and 62% diversify their manufacturing supplier base. [Capgemini]
- In a recent survey conducted by Thomasnet, 64% of North American manufacturers support reshoring. [Supply Chain Dive]
- Consumers can expect a 4-6 week delivery time of online gifts during the holiday season. The temporary closures of ports in China and Vietnam due to COVID-19 will result in long lead times. Experts are suggesting that consumers need to purchase their Christmas gifts online sooner. [CNN]
Supply chain trends
Supply chain disruptions are here to stay. The change in supply and demand has introduced new trends such as the growth of third-party logistics and the rise in nearshoring.
- Since 1980, the USA alone has experienced 298 weather and climate disaster events, with the cost of these exceeding $1.975 trillion.[National Oceanic and Atmospheric administration]
- Across all industries, we can expect more frequent supply chain disruptions, occurring every 3.7 years, lasting one month or even longer. [McKinsey & Company]
- 74% of businesses have experienced a shortage of critical parts and materials across all industries. [Capgemini]
- As of August 2021, 30 container ships are waiting to be berthed at Los Angeles Port.[Seatrade Maritime News]
- Expect a 50% increase in the cost f shipping raw materials. This is due to the manufacturing rebound in China and the global acceleration by countries rebuilding their inventories. [Bloomberg]
- The price of timber across Europe has increased by 120% with an expected two-week lead time since June 2021, where the lead time was previously two days. [pbc Today]
- The shipping container shortage has led to an increase in split shipping, increasing shipping costs by 30%. [Establishinc.com]
- Production of boxes needed for shipments has increased by 9%, and containerboard mills are struggling to keep up with the demand. [Transportation Insights]
- 50% increase in the price of wood pallets and supply is limited. [Transportation Insights]
- The plastic sector is now facing dire shortages and, as a consequence, there is a 35% price increase for ABS plastic which is used in the automotive industry. [Bloomberg]
- A 30% increase in paper and pulp volume in 2020. The increase in e-commerce has created a massive demand for packaging materials, with lead time up to three times longer. [Packaging Strategies]
- 52% of executives surveyed in 2020 have highlighted the rise of the autonomous supply chain. For example, driverless forklifts, robots in warehouses, and delivery drones will be adopted into supply chains by 2025. [E&Y]
- The changing demand in e-commerce has increased in 3PL [ third-party logistics] as consumer demands have increased. Global courier company, DHL has experienced a 150% increase in its fulfillment division. [Supply Chain Digital]
Supply chain technology trends
Finding an alternative solution to Excel spreadsheets will give you intelligent algorithms to produce accurate inventory forecasts.
- 63% of businesses don’t use technology to monitor supply chain performance. This results in a loss of productivity, increased customer complaints, and further financial losses.. [Inbound Logistics]
- Businesses that have invested in machine learning to manage demand forecasting have achieved 90% accuracy with a three-month lag compared to manual forecasting, amounting to only 60% accuracy. [McKinsey & Co]
Senior management acknowledges the benefits of investing in technology to increase inventory performance and resilience across the supply chain.
- Senior management now regards supply chains as an integral part of adding greater shareholder value. 40% of businesses will increase their supply chain investment with the primary goal of increasing speed, agility, and resilience. [Bain & Co]
- 90% of businesses plan to change their supply chain network to optimize their supply chain. [Bain & Co]
- AI-enabled supply chain management has enabled businesses to improve logistics costs by 15%, inventory levels by 35%, and service levels by 65%, compared to slower-moving competitors. [McKinsey & Co]
- In the recent 2020 E&Y survey, 61% of executives are committed to training and upskilling their workforce on using new digital technologies. A sharp focus on 63% increased automation and 63% investment in AI. [E&Y]
Investing in artificial intelligence (AI) and the Internet of Things (IoT) is changing how industries optimize their supply chain.
- 70% of retail and manufacturing businesses have started a digital transformation project in their supply chain operations. [Business Insider]
- By December 2021, manufacturing supply chains will have invested in supply chain resiliency and AI, resulting in productivity improvements of 15%. [IDC Manufacturing Insights]
- 92% of manufacturing executives said AI and cognitive computing would enhance performance in production planning. [IBM]
- The IoMT (The Internet of Medical Things) is the fastest growing industry, predicted to reach a $160 billion market size by 2022. [ROI]
- There are 500 000 medical technologies on the market designed to improve quality of life. [Deloitte]
- It is predicted that by 2050 passenger mobility will increase by 200-300% and that freight activity will increase by 150-250%. As the railway system grows, there is a growing focus on smart railway systems to help connect urban cities and reduce carbon emissions. [Mordor Intelligence]
Businesses should consider how these trends can help improve inventory management processes. Evaluating new technologies and trends affecting the various industries will help build a more resilient and streamlined supply chain.