Technology and intelligence. These are the factors that will help the supply chain overcome the challenges in 2022. Despite this, logistics experts believe that most of the problems faced by the sector should be resolved only in 2023, which indicates that next year should be a year of transition.
Although many companies are already preparing for 2022, the impacts of the global health crisis continue to cause disruptions that affect the entire market. And this requires changes in form how the Purchasing sector deals with its supply chain, its critical purchases and the costs involved in acquiring products and services.
2020 was marked by the closure of factories, businesses and stores, but also by the boom in e-commerce. 2021 brought inflation, shortages of materials and transportation problems, caused precisely by the long-awaited recovery of the economy while e-commerce remains on the rise.
For 2022, it is believed that the problems must remain and be further impacted due to the lack of labor and the increasingly high freight costs, in addition to rising inflation.
What to expect from the supply chain
A PwC study showed that Brazilian companies have a well-organized ecosystem throughout the supply chain, but they still lack transparency in their processes and in the use of new technologies to make the supply chain more resilient – only 17% use artificial intelligence (AI) in their processes to make them more transparent. On the other hand, the adoption of intelligent logistics is higher than the world average, reaching 41%.
So what to expect from 2022?
Congestion at ports
In recent months it has been possible to notice several bottlenecks in ports around the world. The congestion of ships waiting to be loaded is likely to increase due to the increasing need for companies to obtain supplies to avoid interruptions.
Import and export operations are facing delays that have a direct impact on supply chain domestic. Although this is not a recent problem, port congestion has existed for years, and very little has been done to improve the available infrastructure, just remember the shortage of containers.
Shipping costs
Road and intermodal transportation costs are rising. In a country like Brazil, where the supply chain is highly dependent on road transportation, rising fuel prices and inflation have a direct impact on freight costs. In addition, sea freight has also skyrocketed.
To reduce the impact, companies need to reassess and restructure their logistics structures while also finding a new approach to partnering with carriers. This will perhaps be the biggest challenge for 2022.
Supply chain restructuring
2022 will be a year of supply chain restructuring. A year in which companies must seek greater resilience and more reliable purchasing methods. This means diversifying suppliers, seeking new logistics agreements and, most importantly, bringing more intelligence to purchasing processes.
It is a time to evaluate the need to bring the supply chain closer to the operation and work strategically with suppliers.
Shortage of labor and materials
The pandemic has caused millions of people to be laid off, which has had a major impact on the supply chain. With purchasing teams increasingly reduced, companies need to rely heavily on new technologies and automation to remain efficient. To do this, they need to seek out more qualified personnel to lead these teams.
Furthermore, the lack of inputs for the industry is expected to continue for a few more months. According to a report by the Institute for Supply Chain Management (ISM), the most important commodities are experiencing high prices or shortages.
This makes supply chain management even more complex, as it needs to adapt to longer delivery times and, most importantly, seek new supplier options.
Inflation
The math is simple: high demand and lack of supply lead to higher prices. Official inflation in Brazil has already exceeded 10% in the last 12 months. The highest rate in 25 years. This shows that companies are already passing on the increase to consumers in order to buy their inputs.
Basically, in Brazil, the increase is linked to the acquisition of raw materials, mainly due to the growth in purchases of minerals, grains and proteins, changes in consumption and the increase in the price of oil.
Demand forecast
Changing consumer behavior, rising unemployment and a lack of inputs have resulted in a major challenge for companies in predicting demand for their products. The lack of a benchmark for the future requires investment in data-driven technologies to predict long-term trends.
Now is the right time to rethink the supply chain, reevaluate processes and invest in new technologies. Count on our help to minimize the challenges that must be faced in the coming months.