From the food we eat to the clothes we wear, supply chains are involved in almost everything we do.
They are integral to the movement of goods and services the world over.
Staying updated with the state of logistics and distribution networks is crucial to provide context to economic trends.
That’s why we’ve created this list of the most essential supply chain statistics in 2024 and beyond.
Top Supply Chain Stats
Here’s our pick of the most relevant supply chain statistics:
Over half of business leaders think their supply chain requires improvements.
37% of companies say they changed their operating model in 2023.
The majority of supply chains align themselves with the tech industry.
Around two-thirds of businesses have found their tech is underperforming.
The state of supply chains
Recent global events have emphasized the importance of robust supply chains. Factors like the pandemic, geopolitical tensions, and severe weather have halted production and caused delays worldwide.
Without effective logistics and distribution, getting products to consumers and meeting demand becomes more and more challenging.
In this section, we explore statistics that reveal more about the current state of supply chains and how the global situation is developing.
Surveys indicate the majority of supply chains align themselves with the tech industry. (Verusen)
30% of companies are in tech followed by 25% in equipment manufacturing. The rest of the companies are evenly split between other sectors such as consulting, utilities, and packaged goods.
Experts predict that global supply chain management will reach over $30 billion by 2026.
As demand for international products grows, the value of distribution and logistics software rises.
The technology enables companies to streamline operations and gain better oversight over their supply chains.
52% of business leaders think they could improve their supply chain. (SAP)
Many companies say they’re still struggling to adapt to changing consumer habits. As a result, they have lower revenue and need to secure business loans.
Over half of manufacturers say their biggest priority is supply chain visibility.
Research shows that companies of all sizes are prioritizing supply chain visibility. Source
Around half of companies say they’re reevaluating their supplier relationships.
Many businesses are assessing whether their goals and values align with suppliers. It’s part of a strategy to ensure they maintain resilience.
Key challenges with supply chains
Supply chains face unprecedented risks. Rising global demands mean routes are longer and more complex which makes them more susceptible to disruptions.
Issues like climate change and geopolitical tensions compound these challenges. Here we’ll take a closer look at the different challenges that affect supply chains.
A third of supply chain leaders say they struggle with a lack of investor funding. (Gartner)
As companies struggle to secure financial backing, they have to maximize their resources and focus on raising productivity levels.
The Red Sea shipping crisis affects 30% of global container trade. (JP Morgan)
Rebel ships around the Suez Canal are forcing hundreds of cargo ships to take a long route around Southern Africa.
The crisis is having a deep impact as expert analysis indicates it’s even driving up inflation.
“The current disruption in the Red Sea is unexpected and fast-moving. The most obvious problem is that with the much longer route through the Cape of Good Hope to the US East Coast, there is a 20-30% increase in transit times.
The damage gets exponentially worse once you get more technical about the issue. A 20-30% longer transit means a higher cost of operation for the vessel. We’re talking about the crew, fuel, etc. A longer transit time also sucks out a massive amount of vessel space from the market.”
Developing inventory buffers and diversifying sources are the two most popular ways to build resilience. (McKinsey)
78% of survey respondents said they had used these two strategies. However, more and more companies are also looking into finding suppliers closer to production sites.
In the wake of the pandemic, many companies are reducing their inventory by up to a third.
Many businesses stockpiled during COVID-19 so they could still guarantee deliveries to customers. Now many have to reduce their inventory to become more cost-effective.
Many industries have to decrease inventory levels after creating buffers during the pandemic. Source
45% of brands are increasing manufacturing capacity and improving collaboration in response to challenges.
To build resilience and mitigate risks, leading companies are scaling their operations and building robust networks with supply chain partners.
Technology and innovation in supply chains
Technology is the backbone of modern supply chains, enabling them to be more efficient and adaptive to changing market demands.
This section will explore how recent developments like AI and data analytics have impacted logistics and distribution companies.
Most businesses aren’t getting the results they expected from tech investments.
69% of companies say they haven’t seen a high ROI on tech investments. Experts suggest the issue is due to a combination of factors such as a lack of employee training and data silos.
Due to various issues, supply chain technology isn’t delivering results. Source
76% of organizations have installed planning and scheduling systems.
A recent McKinsey survey revealed a surge in the use of APS systems. Many companies are increasing their usage in response to customer demand.
51% of companies believe AI will seriously impact supply chain management.
However, this number is lower among engineers — only 38% believe AI will significantly change how their organization handles distribution.
91% of manufacturers plan to combine AI technology with supply chain data analytics.
60% are already using AI in data analytics today. A further 31% are in the process of introducing it to their company.
“With a keen focus on lean data analytics and generative AI, small manufacturers are leveraging advanced technologies to optimize operations and drive growth.
Despite challenges like asset intensity and familial operations, these manufacturers are proving to be early adopters, recognizing the real ROI in integrating data with financial insights.”
Sustainability and social responsibility in supply chains
Growing awareness and concerns over environmental and societal issues have led to further demand for ethically sourced products.
Logistics and distribution are under pressure to meet these new standards. Here we’ll look at how they’re addressing issues and preparing for the future.
The majority of companies still don’t have a net zero goal.
65% of organizations haven’t set a target and only 6% say they’re increasing their commitment to climate change mitigation.
Experts say the tough economic climate in 2023 derailed many business leader’s long-term initiatives.
53% of businesses say incorporating environmental practices into their supply chains is a priority.
Other environmental initiatives are also taking center stage. 45% of companies are aligning sustainability goals with suppliers and 43% are measuring their progress.
Implementing a code of conduct for suppliers is the most popular sustainability practice.
A whopping 80% of companies have introduced codes of conduct. Other commonplace initiatives in 2024 are audits, mapping, and certifications.
“There’s a growing emphasis on reducing carbon footprints and embracing circular economy principles. This shift isn’t just ethical; it’s economical. Consumers are demanding it.
In our business, meeting ethical and environmental standards is non-negotiable. We rigorously vet our suppliers to ensure they align with our values, focusing on those who demonstrate a commitment to fairness, sustainability, and reducing their impact.
We’re also innovating in the materials and processes we use, prioritizing eco-friendly options that help us meet our goal of minimizing our footprint.
Collaboration is key. We actively work with our partners to enhance their sustainability practices, ensuring our stakeholders are informed and engaged.
By embedding these principles in our operations, we not only uphold our commitment to ethical and environmental standards but also lead by example in the security solutions industry.”
Breaking news stories often give us insights into the state of different industries. Here’s what media outlets all over the world have to say about supply chains:
The US just passed theOcean Shipping Reform Implementation Act with 393 votes to 24. (The Load Star)
Now the Federal Maritime Commission has more authority to regulate the technology and practices that international transport systems use.
Leading manufacturer and supplier Unilever has pledged to reach net zero by 2039. (GreenBiz)
The UK company intends to reduce 42% of its energy and emissions within the next six years. Unilever is behind many well-known, global brands such as Dove, Ben & Jerry’s ice cream, and Knorr.
The EU has passed a law requiring companies with over 1000 employees and a net turnover of over €450 million to audit their supply chains. (The Guardian)
These organizations have to review their distribution and logistics management to check for environmental issues and human rights violations.
However, the law faces criticism as the high eligibility thresholds mean it doesn’t cover many EU businesses.
Experts voted Schneider Electric as the top supply chain of 2023.
Schneider Electric topped the list of the best supply chains in 2023. Source
The poll ranks companies based on their growth, inventory, and ESG (environmental, social, and governance) strategies.
Cisco Systems and Colgate-Palmolive came in second and third respectively.
Recent trends in supply chains
In the aftermath of the pandemic and the Ukrainian conflict, supply chains are beginning to normalize.
Now leaders are considering their priorities and developing new strategies. In this section, we explore the trends and developments that will shape logistics and distribution in the coming years.
The top three drivers of supply chain productivity will be technological advances, changing demographics, and competition for skills. (Gartner)
58% of business leaders agree these will be the main priorities for distribution and logistic companies over the next three years.
Only 40% of businesses are reskilling employees as a talent strategy.
This number marks a significant drop from 2020 when 70% reskilled their existing workforce.
Instead, leaders are using recruitment initiatives to secure the talent they need.
Less than half of supply chain companies are training their existing workers to plug skills gaps. Source
Two-thirds of companies are now using near-shoring strategies.
That’s double the number of respondents who reported using this strategy the year before.
Localizing supply chains enables companies to become more cost-effective, agile, and resilient.
Cybersecurity and data privacy regulations are the biggest focus in 2024.
52% of supply chain leaders say they’re investing more in digital solutions to stay compliant with stringent data protection laws. Quality control is shortly behind at 47%.
Wrap Up
While supply chains have stabilized after recent global disruptions, there are still many obstacles and risks.
Modern logistics and distribution companies have to stay proactive to overcome challenges and weather tough economic conditions.
Technology remains key to success. The supply chains that keep pace with developments like AI and data analytics are the most likely to thrive in 2024 and beyond.
