This Is How Supply Chains Are Predicted To Shape Up In 2022

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The COVID-19 pandemic brought worldwide supply chain disruptions as lockdown measures impeded manufacture, transportation, and trade. Compounding the problem, the “just-in-time” model, which elects to make only enough goods to supply current demand, left producers flat-footed during the abrupt spike in demand for vital products such as personal protective equipment. While PPE supplies have largely been restored, an undersupply of many other goods remains, causing ongoing inflation in staples such as food, energy, and automobiles.

Given this context, many are anxious to know how supply chains will shape up over the next year. While no one holds a crystal ball, economic authorities appear to be optimistic that the crisis will ease before too long.

Jerome Powell, Chair of the Federal Reserve, stated last September that while supply-chain bottlenecks have lasted longer than expected, they will eventually abate as the economy continues to reopen, which will in turn assuage inflationary pressures.

John McEleney, corporate vice president of Strategy for OnShape, predicted that “operations will start to normalize” by Q3 2022, driven by new public-private partnerships and government funding.

Strategies to mitigate future disruptions include substituting the current just-in-time model with a “just-in-case” model that builds up inventory for use when needed and utilizing advanced data to identify strategic locations for building out supply chains to increase resilience.

The supply chain crisis pushed sustainability efforts to the back burner for many businesses: a third of companies in both the US and the UK cited supply chain disruptions as a reason for their recent inaction on greening their operations.

Supply chain leaders such as Oliver Lemanski point out that the crisis should be looked at as an opportunity: if the global economy must build back its supply chains, why not build them back sustainably? In addition to helping the planet and appealing to an increasingly climate-conscious consumer base, businesses will financially benefit from consuming fewer raw materials and generating less waste.