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Supply chains in 2023 witnessed improvement since the economic downturn triggered by the Covid-19 pandemic in 2020-21. Operations became more streamlined, experiencing reduced congestion and a more harmonious supply-demand equilibrium. Valuable insights from the challenges posed by the pandemic underscored the significance of contingency planning, adaptability, and transparency across all tiers of the supply network, spanning stages from raw materials to the delivery of products. The resilience of supply chains saw improvement, marked by heightened transparency, improved communication and collaboration, greater digitization, an emphasis on sustainability, and a shift towards shorter supply lines as participants reassessed their sourcing strategies. These transformative developments were propelled by swift advancements in technology and information-sharing, and this trend is anticipated to persist into 2024.
In the midst of a landscape characterized by perpetual disruptions, and escalating consumer expectations, traditional methods of network management fall significantly short. The ground beneath the feet of supply chain professionals continues to undergo dynamic shifts. As we move into 2024, the spectre of supply chain disruptions looms large, urging professionals to navigate an environment marked by constant change and evolving challenges.
Commencing this journey involves organisations initially embracing the defining trends anticipated for 2024. This encompasses familiarizing themselves with emerging technologies such as AI, distributed ledger technologies, low-code and no-code platforms, and the electrification of fleets. Subsequently, there is a necessity to adeptly manage the transition to a new digital architecture and flawlessly execute this process.
A paramount focus for organisations in Bangladesh will be the meticulous extraction of pertinent, clean, and well-governed data to maximize the benefits of their newly-adopted technologies. Additionally, data assumes a critical role as organizations face mounting pressure to fulfill evolving Environmental, Social, and Governance (ESG) commitments.These structural shifts are poised to configure novel operating models and enhance comprehensive processes. To evade lagging behind, it is imperative for organisations in Bangladesh to comprehend these trends and implement targeted actions to initiate their transformation sooner rather than later.
Potential areas in the supply chain that we should consider for a successful conclusion in 2024 include:
Unforeseen disruptions are unpredictable and have the potential to inflict damage on every supply chain. An essential component of logistics planning involves identifying areas of risk and vulnerability and devising strategies to mitigate their impact. While there are elements beyond control, companies can implement measures to minimise or completely evade the consequences of disruptions.
In 2024, the integration of technological innovations continues to play a pivotal role, especially in elevating the delivery and visibility of goods within the supply chain. Notably, advancements in technology have substantially diminished delivery times, offering a comprehensive overview of the product journey. Despite these advancements, unforeseen events may necessitate deviations from the plan, emphasizing the need for logistics partners equipped with 2024's cutting-edge technological solutions capable of adjusting speed, slowing down, or pivoting as needed.
In view of scenarios involving moderate to severe bottlenecks in 2024, an increasing number of businesses, including those in Bangladesh, will seek collaboration with partners boasting substantial advancements in visibility, tracking, and predictive programmes. Notably, the role of generative AI in supply chain management will become increasingly crucial, aiding companies in proactively addressing disruptions and enhancing overall resilience.
Depending solely on a single supplier in Bangladesh exposes one's business to substantial disruption risks. Unforeseen circumstances like civil unrest or severe weather events have the potential to render a supplier entirely inoperable for an extended duration. To safeguard against such risks, it is crucial to identify reliable suppliers and logistics partners who can ensure the continuity of shipments, even if one supplier faces operational disruptions.
A recommended approach is to scrutinize lead times, comparing the performance of carriers and suppliers, while also considering industry benchmarks for similar routes within Bangladesh's context. Through a thorough analysis, one can enhance one's understanding of the supply network, enabling one to make informed decisions and prioritize the selection of the most dependable carriers. This strategic approach is particularly pertinent in 2024, as businesses in Bangladesh navigate a landscape where resilience and adaptability are paramount in mitigating potential disruptions.
Engaging in proactive supply chain planning involves simulating scenarios that assess the comprehensive repercussions of decisions across the entire supply chain. From the selection of production sites to determining shipping routes, each decision can set off a chain of consequences. Scenario analyses empower planners to visually assess the effects of their decisions and experiment with various options at the click of a mouse. When faced with the need to redirect shipments, what modifications should be applied to the network design? If there's a shift in production locations, how might it impact shipping routes and lead times? In this context, the adoption of Integrated Business Planning (IBP) becomes imperative, enabling data-driven decisions that factor in multiple considerations.
In Bangladesh, businesses must have contingency plans for disruptions. For example, if a local supplier's factory closes, alternate suppliers should be ready. In the case of international conflicts affecting shipments, a reshoring plan is vital. Each threat requires a specific plan with detailed protocols and department responsibilities. Regular vulnerability assessments are crucial to adapt to the evolving risk landscape. This dynamic approach ensures readiness for unforeseen changes.
In the dynamic landscape of supply chain management in 2024, it is essential for supply chain managers to define precise parameters for quantifying performance. Key Performance Indicators (KPIs) play a pivotal role in enabling businesses to pinpoint strengths and inefficiencies, facilitating the establishment of data-driven goals. Paramount among these critical metrics are the Inventory-to-Sales Ratio and supply chain cycle time. These metrics, reflective of the evolving supply chain environment, empower managers to make informed decisions and enhance overall operational efficiency.
The economy of Bangladesh has experienced ongoing challenges, with a notable and persistent concern being high inflation. Adding to this complexity, Bangladesh is set to graduate on November 24, 2026. It is imperative to closely examine disruptive elements in supply chain logistics alongside other crucial economic indicators. As the nation navigates these economic dynamics, a vigilant focus on supply chain resilience becomes paramount for sustained growth and stability.
The writer is president of the Supply Chain Street, and previously Head of Supply Chain Advisory Services at KPMG Bangladesh. He now resides in Winnipeg, Canada.