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Cloudleaf 2021 Predictions: What Supply Chain Resiliency Will Look Like in 2021 and a Post-Pandemic World

vmblog 2021 prediction series 

Industry executives and experts share their predictions for 2021.  Read them in this 13th annual VMblog.com series exclusive.

What Supply Chain Resiliency Will Look Like in 2021 and a Post-Pandemic World

By Mahesh Veerina, CEO, Cloudleaf

The COVID-19 pandemic has tested the strength and agility of global supply chains in nearly every industry, highlighting weak spots within the pre-COVID supply chain. Sudden demand influxes in the past 12 months have urged supply chain organizations around the world to adopt innovative technology, such as IoT Sensors, artificial intelligence (AI), machine learning (ML) and advanced analytics, to enhance their digital processes as well as increase visibility and efficiency to support ever-growing demands. As we look ahead in 2021, these new digital advancements will play an essential role in reshaping the "new normal" of the supply chain and its surrounding ecosystems.

The acceleration of e-commerce buying behaviors spurred by the pandemic will necessitate a new digital standard to enable more agile supply chain operations. The eCommerce boom has completely changed the last mile distribution and how products are delivered to customers. The sudden increase in online shoppers, including purchases for both shipping and in-store or curbside pickup, in 2020 will fuel the need for supply chain organizations to adopt new digital touch points to help deliver products both safely and efficiently. In the next year, the last mile distribution will see larger retail sellers move from operating through large distribution centers, to utilizing stores as drop-off points and act as micro warehouses to complete micro fulfillment operations. However, unlike distribution centers, stores are not equipped with the necessary software to track and manage product flows, inventory, logistics, condition -- which is especially vital for products that require cold chain storage, such as grocery items. In 2021, supply chain organizations will require continuous, real-time visibility to gain access to valuable insights -- such as the location, quantity, environmental conditions and temperature of products -- in order to optimize inventory, planning and logistics, as well as keep up with ever-increasing eCommerce demands and mitigate risk.

Supply chains will become more resilient and agile in view of new standards set by the pandemic. The adaptation of strategy and technology occurring in the COVID-19 nightmare scenario will serve supply chains of all industries in becoming more resilient and agile in the year to come. Adoption of IoT sensors to establish real-time ground truth about where products are at all times and what condition they're in will enable companies of all types to better meet supply and demand. This will be especially critical for providers whose traditionally vulnerable supply chains are essential to seeing the world through the pandemic, including the pharmaceutical and food supply chains. The real-time visibility and capability to act before an unwanted incident occurs, that sensor-based ground truth provides will be the foundation that helps these industries save billions in the longer term, beginning in 2021.

Technology advances like digital twin, AI/ML, and IoT will enable more granular item level tracking and will impact the end-consumer experience. Today, IoT is a ubiquitous technology for supply chain tracking purposes. In recent years applications for AI/ML and digital twin technology have also risen in relevance for the industry. Beginning in 2021, companies will start to employ a concerted strategy around these technologies to construct a complete and real-time picture of products as they move through the supply chain, as well as to obtain prescriptive and predictive analytics to make informed business decisions. In this strategy shift, we will see the gaps of visibility close where the supply chain has remained most weakened even with the use of IoT alone, such as in low coverage areas when product is in flight, adding critical value to pharmaceutical and food supply chains, which lose billions annually in spoiled products. Additionally, we can expect to see this visibility get even stronger as 5G takes complete shape most likely in 2022, offering more connectivity and even more to-the-minute information.

Artificial intelligence and machine learning will play a much more integral role in supply chain strategy than in previous years. The need for more real-time insights throughout the supply chain will continue to grow in 2021, especially as supply chain organizations re-evaluate their operations as a result of sudden changes in buying behaviors during the COVID-19 pandemic. To address this need, supply chain organizations will need to look to artificial intelligence (AI) and machine learning (ML) enabled technology to upgrade from current, descriptive and prescriptive analytics, and leverage predictive analytics -- which provide recommended actions before an incident occurs based on previous actions. Oftentimes, companies experience a mess of silos and fragmentation due to being acquired by large companies that have different systems. In 2021, supply chain stakeholders will look to deploy digital twins across all the silos as an extra layer of visibility and to ensure synchronization between a company's existing systems and new technology, such as sensors and nano sensors, which are coming to market in increasingly larger volumes and greater economic viability.

The State of the Supply Chain in 2021 and Beyond

Today's supply chain organizations are in a unique position to augment their processes in order to operate at unprecedented levels of speed and efficiency, to manage order lifecycles and deliver a positive customer experience. Beyond COVID-19, supply chain organizations will continue to invest in and adopt innovative technologies like IoT Sensors, AI/ML, Digital Twins to digitally transform supply chain operations. This digital transformation will play a vital role in further refining levels of supply chain efficiency and agility -- ensuring that supply chain organizations are fit to prevail in the event of another global crisis. Technology will help power these next generation digital supply chains, enabling business leaders to make the right decisions in real-time to increase revenues, avoid disruptions, deliver better business outcomes, improve customer satisfaction and increase sustainability.

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About the Author

Mahesh Veerina 

Mahesh is a seasoned Silicon Valley entrepreneur, technology executive and investor with more than 25 years of experience with companies including Ramp, Nokia, Motorola, Azingo and Barnes & Noble. He enjoys travel, golf, wine and family.  

Published Monday, January 25, 2021 7:34 AM by David Marshall
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