Adapting to Demand: The Top Three Supply Chain Priorities for 2022

Autumn 2021

The logistics industry has witnessed intense changes over the last year. While the COVID-19 pandemic emphasised the need to safeguard supply chains in the event of worldwide disruption, black swan events such as the Suez Canal blockage revealed just how fragile supply chains are. But for retailers to consistently match customer demands, they must have the tools in place to overcome this disruption and adapt to the ever-changing behaviour of consumers. 

The current interruption caused by the lorry driver shortage in the UK due to Brexit and the ‘pingdemic’ highlights again the importance of creating resilient supply chains. With additional factors such as climate change putting pressure and uncertainty on the future of global logistics, retailers, manufacturers, and logistics service providers (LSPs) need to focus on building robust supply chains so consumers can continue to enjoy full availability and flexibility of purchases. In today’s competitive environment – customer satisfaction is key and the importance of ensuring the customer journey is not disrupted by external factors is essential.

The State of Supply Chain Execution Report 2021, conducted by Reuters Events Supply Chain in partnership with Blue Yonder, surveyed supply chain professionals and found that COVID-19, customer centricity, rising e-commerce complexity and costs, the need for direct-to-consumer (D2C), and the risk of financial peril is propelling retailers, manufacturers and LSPs to digitally transform. But what are the top three priorities and strategies of supply chain professionals when it comes to building these resilient supply chains, adapting to consumer demands and safeguarding the customer experience?

Organisations are focusing on rising e-commerce, risk management and adopting digital-first technologies to future-proof supply chains in line with changing customer behaviour. The key to building resilience here is through incorporating the latest supply chain technology to support business continuity and uncertainty throughout operations. I will therefore outline the top three supply chain priorities of 2022, including the growth of online shopping, the focus on risk management strategies and the importance of adopting digital-first technologies; plus I will explain how organisations can best address associated challenges to overcome (or at least minimise) disruption in order to protect the supply chain and the customer experience alike moving forward.

1) E-commerce

It’s no secret that retailers witnessed a dramatic rise of e-commerce over the pandemic. As consumers have become accustomed to shopping in this way, supply chains are having to adapt and modernise in line with this consumer preference. With online sales increasing more than 120%1 over the past year, LSPs have seen e-commerce volumes explode and this unprecedented rise has led to considerable change within the industry.

As a result of anticipated growth in this area, shippers and LSPs are modifying their logistics footprint, engaging in digital transformation, and renewing business models to cope with demand. In turn, this change has provided the opportunity for retailers to adopt an omni-channel approach to their customer experience, to appeal to consumers from multiple different selling channels. Companies looking to capitalise on these omni-channel opportunities created by the increased online order volume over the last 18 months are prioritising more agile delivery and fulfilment models. This includes direct-to-consumer (D2C) to deliver on consumer needs and maximise the customer experience. But what does this mean for retailers?

I expect most e-commerce channel volumes will at the very least remain at the level we are experiencing today. There may be further increases in some verticals, for example in apparel retail. Notably, some retailers are reducing or totally removing their high-street presence for an online-only model in Europe, such as the fashion retailer GAP.

Retailers are clearly pushing their LSPs to meet the uptick and (in most cases) the LSPs are meeting this, which is a great achievement for the industry after the dramatic changes witnessed. There’s a distinct air of greater collaboration between companies and also departments or functions within companies, meaning there is more pressure on the industry to improve visibility and planning in order to counter the stress of storage capacity and increased returns. Retailers are working together with LSPs like never before to manage the e-commerce growth. And, with an improved holistic view of their entire supply chain, retailers can be in a position to effect positive changes.

Investing in transportation management systems (TMS) and warehouse management systems (WMS), as well as end-to-end visibility, automation and cloud strategies will help supply chain professionals to build more sustainable, resilient and agile organisations for the future. In order to provide the best service for customers in line with the increase of online shopping and shift towards e-commerce, finding the best solution involves the optimal mix of customer centricity, cost and sustainability, and this is where technology excels.

2) Risk Management

In addition to the focus on e-commerce, the pandemic brought a multitude of risk factors into the supply chain that organisations needed to address to overcome disruption and deliver on customer experience. The State of the Supply Chain Execution report found that supply chain risk management priorities have shifted because of constraints on raw materials, labour shortages and growing cybersecurity threats on distributed networks.

Previously, risk management and resilience were widely ignored in favour of efficiency and just-in-time production. Now, organisations are making concerted efforts to break down silos in supply chain operations to enable long-term strategies and actions in their logistics infrastructure and technology to ensure that future shocks will be minimised, and the end-consumer will not be affected.


Solutions like the Luminate™ Control Tower  provide retailers with full visibility across the supply chain to help businesses make informed decisions around deliveries, stock and product lifecycle and help retailers to manage operations in response to risks. The enhanced and holistic view of the total supply chain makes it much simpler for companies to adapt sourcing and fulfilment channels. This gives answers to questions such as, “so what if my shipment is delayed?”, enabling retailers to mitigate risks and delays on their supply chain far more effectively than without supporting technology.

A crucial aspect of this is sustainability. Over half (53%) of retailers/manufacturers and half (50%) of LSPs plan to invest in sustainability as a strategy for risk management. Climate change affects us all. With the hottest July ever recorded  in 2021, the pressure is on for businesses and consumers to focus on sustainability to future-proof operations. Flash floods in Germany over the summer, for example, caused incredible tragedy, while delaying shipments and affecting global supply chains. By making a focused and concerted effort to introduce sustainability into supply chains, retailers will be able to protect their supply chains against future risks but also safeguard their operations against government and consumer pressure to be more climate conscious.

3) Digital-First Technologies

By prioritising risk management, organisations are highlighting how supply chains are vulnerable to external shocks, prioritising digital-first practices and technology investments. Greater visibility and orchestration over processes and suppliers make managing risk and modelling shock scenarios for local and global disturbances easier and more effective.

2020 – and even the first half of 2021 – have seen an acceleration in many emerging digital trends pre-dating the pandemic and the expectation of continued growth in these areas means that companies need to enhance their supply chain capabilities, rather than throw resources at difficult situations. Attaining interconnected systems, integrating key systems such as TMS and WMS as examples, and successfully leveraging the power of artificial intelligence (AI) and machine learning (ML) are irreversible trends, allowing supply chain operators to convert insight from end-to-end visibility into optimised and profitable action. 

Linking back to the growth of e-commerce, investment in modern supply chain technologies and new approaches have become essential for businesses to keep pace with shifting trends and customer expectations. The State of Supply Chain Execution Report 2021 found that pressure to reduce supply chain costs, improving service levels for retailer customers and dealing with labour shortages  are the main drivers of investment in supply chain technologies and digital-first practices for LSPs.

Moving away from legacy systems and prioritising technologies that enable visibility for both customers and operations, while automating processes and supporting enterprise agility, is essential for future-proofing the supply chain. Introducing digital-first technologies is becoming increasingly more important to lower costs, cope with demand and deal with changing consumer behaviour, and one that underpins supply chain strategies for all organisations.

Jim Bralsford

Senior Director, 3PL Industry Strategy
Blue Yonder

Jim joined Blue Yonder in February 2021 to continue his 20+ year career in supporting 3PL and supply chain solutions. His experience includes working for organisations in UK, EMEA, Asia-Pacific and Global roles, leading sales and solutions teams, to Senior Vice President level; notably with Unipart, Exel, Ceva and most recently E2open.