Four supply chain trends for 2024: What do the UK’s professionals think?
Published on 16/04/2024 Written by David Jani.
Managing supply chains requires careful planning and when problems arise robust solutions are necessary. We asked 200 professionals about the supply chain challenges they foresee in 2024 and what they’re doing to overcome them.
In this article
- Trend #1: External factors continue to pose supply chain headaches
- Trend #2: Companies are targeting investments in AI, cybersecurity, and analytics
- Trend #3: It’s getting harder to find supply chain talent
- Trend #4: Professionals are concerned about cyberattacks affecting supply chains in 2024
- Supply chain trends for 2024
The importance of supply chains has been thrust into the UK public consciousness over the past few years. Brexit, COVID-19, and wars in Europe and the Middle East have all disrupted the global flow of goods. These disruptions have, at times, reached the point where consumers have noticed a lack of products on the shelves and higher prices for their weekly shop.
For the companies that sell and distribute goods, keeping these supply networks running has become increasingly challenging. Supply chain management software has long been available to help them overcome some of these challenges, but other factors like skills and security are also causing issues.
To identify the major supply chain trends for 2024, we surveyed 200 supply chain and logistics professionals. Our research looks at the challenges they face, their expectations for the coming year, and the tools and technologies they rate the most. Scroll down to the bottom of this article for our full methodology.
Trend #1: External factors continue to pose supply chain headaches
Supply chain professionals in the UK must manage complex journeys for their goods, involving multiple suppliers, technologies, and systems. But the biggest challenges they face, according to our research, are beyond their control. Economic inflation and the ongoing recession in the UK were the most frequently cited concerns for 2024. Below that, they also highlighted how a lack of skilled workers and changing consumer demands could make their job more difficult.
Perhaps because of the instabilities highlighted above, many UK respondents in our survey indicated that they are shifting their supply chains to be more local. One quarter said that they source all products from within or near the UK already, and another 57% said that most of their suppliers are located in the UK or nearby. The overall sector seems to be moving in this direction, too: a large majority (69%) said that their plans in 2024 are to source all or most of their goods from the UK or neighbouring countries. Only 12% said they don’t have any plans to use suppliers that are closer to home.
Key takeaway: It looks like UK firms are taking action to bring their supply chains closer to home to protect them against instabilities in global sourcing networks. Using local suppliers can help with fulfilment speed and improve communication. Working with partners closer to home (also known as ‘nearshoring’) or within the country can help with fulfilment speed and improve communication.
Supply chain and logistics professionals also foresee bigger economic problems on the horizon, as well as skills shortages. In the rest of this article, we look at the software they are investing in to address these challenges.
Trend #2: Companies are targeting investments in AI, cybersecurity, and analytics
Businesses represented in our survey see technology as a provider of solutions to the challenges highlighted above, and it continues to be a significant area of investment.
A plurality (42%) said that they have allocated between 6 and 10% of their total 2024 company budget on supply chain technology, and a further 8% said they spend even more than that.
There was no single overwhelming investment priority for 2024, but some areas are attracting more attention than others. Artificial intelligence, advanced cybersecurity, and advanced data analytics topped the list.
In fact, security and data analytics were seen as major enablers to the overall success of the companies we surveyed. A total of 58% and 53% respectively said these technologies were “very important,” and rated them by far the most business-critical technologies.
Supply chain management and logistics is often seen as a very black-and-white discipline. Either goods are in stock or they’re not. They’re delivered on time or they’re not. But when it comes to measuring the success of tech investment, the top KPI was sentiment-based: most respondents (55%) said they used customer satisfaction as a guiding metric. Other important factors were more prosaic though: cost reductions (45%), logistics KPIs (41%), and sales KPIs (40%) were all important.
Key takeaway: Three key technologies look set to be top-of-mind for supply chain professionals in 2024:
- Over the past 12 months or so, companies have turned to artificial intelligence software to automate processes, create content, and uncover new insights. In the supply chain, this can mean predicting disruptions long before humans can spot them or optimising inventory to meet fluctuating demand.
- Tools to defend against cyberthreats will always be necessary, and this field is constantly evolving. Today, cybersecurity software often incorporates AI to predict threats, generate risk profiles, and learn which users and actions are dangerous vs. safe.
- Data analysis tools have been a cornerstone of business software since computers were invented. Today’s products do more to aggregate across complex data sources and draw out the most valuable human insights so business owners can act fast.
Trend #3: It’s getting harder to find supply chain talent
The availability of skilled workers was the joint-third most highlighted challenge for 2024 among supply chain professionals in our survey. And talent shortages were the fifth most cited problem from the past six months in procurement.
Recruitment over the past two years has been a challenge in many areas, but respondents did not agree on any one specific discipline as a problem area. In our survey, data analytics, quality control, and logistics/distribution all presented issues.
In line with the other challenges highlighted in this article, most respondents said that attracting and retaining talent has become harder over the past two years. Over one in five (21%) believed they have struggled significantly more than in previous years, and 38% moderately more.
In spite of this, the people who already work in supply chains are well trained. Most (80%) have some form of qualification in it, according to our research. And 71% said they were keen to gain more certifications in the coming year or two— the most popular of these being Certified Supply Chain Professional (CSCP) from Association for Supply Chain Management (APICS) or Certified Professional Logistician (CPL) from The International Society of Logistics (SOLE).
The other good news is that the profile of the supply chain within organisations seems to be getting bigger. Just over half (51%) in our survey said their company has a chief supply chain officer, and another 23% said they plan to hire or promote one in 2024.
Key takeaway: Businesses recognise the need for more qualified professionals to manage the supply chain. The solutions to this aren’t easy, and require money, strategic vision, and co-operation between government and industry. But firms can work to upskill the staff they have now. According to the Software Advice Employee Retention Survey 2023, 25% of SME employees said that opportunities for learning, skill enhancement, and training contribute to their comfort at work. And 20% wanted employers to prioritise upskilling programmes.
The will is certainly there, and there is a wealth of training software available if firms are serious about implementing training for their workforce.
Trend #4: Professionals are concerned about cyberattacks affecting supply chains in 2024
Cybersecurity threats are the business issue that won’t go away. It continues to be top of mind for everyone from the CEO downwards. And the new possibilities for launching (and defending against) attacks with artificial intelligence over the past year have added more complexities to this already tricky area.
The prospect of a cyber attack and resultant business disruptions continues to be a concern for supply chain professionals. A quarter said they experienced disruptions linked to an attack in the past 12 months, and another 18% said this happened more than once. Looking ahead, 31% said they are extremely concerned about such a scenario in 2024, with another 42% moderately concerned.
What are supply chain attacks?
Supply chain attacks attempt to gain access to an organisation system by targeting less secure elements in its supply chain. For example, if you rely on third-party software as a component of one of your own systems, and that third-party software is compromised, your system that relies on it becomes vulnerable, too.
Preventing supply chain attacks means having the right cybersecurity tools in place, properly vetting suppliers, communicating the security standards that you expect them to meet, and regularly assessing and controlling the risks to your business. The National Cyber Security Centre has guidance for businesses on supply chain security and how firms can mitigate the risks.
Supply chain trends for 2024
The challenges of the past few years may continue for supply chain professionals into 2024. Respondents in our survey believe that ongoing macroeconomic issues may make it hard to deliver value to their companies. Skills shortages mean that there are fewer people to help address the problem. And security threats remain a concern.
Firms are continuing to invest in technology, particularly in AI and data analytics, to ensure that customers remain satisfied. There is also willingness among current practitioners to upskill with supply-chain qualifications. And UK firms are continuing to bring their supply chains closer to home to ensure better continuity of operations.
Methodology:
Software Advice's 2024 Supply Chain Plans Survey was conducted online in February 2024 among 200 respondents in the U.K. The goal of the study was to learn about the challenges and plans of supply chains. Respondents were screened for employment as supply chain or logistics professionals at a small- to midsize-business (<USD $500M in annual revenue, employing <1,000 people).
This article may refer to products, programs or services that are not available in your country, or that may be restricted under the laws or regulations of your country. We suggest that you consult the software provider directly for information regarding product availability and compliance with local laws.
About the author
David is a Content Analyst for the UK, providing key insights into tech, software and business trends for SMEs. Cardiff University graduate. He loves traveling, cooking and F1.
David is a Content Analyst for the UK, providing key insights into tech, software and business trends for SMEs. Cardiff University graduate. He loves traveling, cooking and F1.