Navigating disruptions: The supply chain outlook for 2024

2023 indisputably was the year of GenAI. According to a recent KPMG in India report, about 74 per cent of stakeholders rank GenAI as the most impactful emerging technology regardless of sector or function.1 Given this, stakeholders are widely exploring the extensive use cases of GenAI in reshaping supply chain management. By analysing an array of complex variables—such as historical data, demand fluctuations, production schedules, regulatory changes and seasonal patterns—this subset of AI can streamline processes, improve forecast accuracy, enhance resource allocation and mitigate risks. The self-learning algorithms within software engines, powered by GenAI, can proactively adjust to fluctuations, improve operational efficiency, reduce costs and ultimately foster a more adaptive and responsive supply chain ecosystem, which will be essential for achieving resilience. Leading e-commerce giants today are also evaluating innovative use cases of GenAI to enhance customer experience, marketing techniques and product listings, which will only scale up in the times ahead.  

As data generation accelerates, with millions of dynamic datasets proliferating across the supply chain landscape, data criticality has never been more pronounced. The effective utilisation of readily available and affordable data enhances real-time analytical capabilities, visibility and predictive insights, leading to improved decision making and better responsiveness to market dynamics. Given this, efficiently and securely handling intricate datasets becomes indispensable to improving complex supply chain operations. For instance, given the significant transformative potential of advancing AI, stakeholders must also prioritise robust cybersecurity strategies to mitigate adversities. Today, cyber attackers can potentially exploit AI tools to carry advanced phishing attacks, engineer elusive malware and deploy more sophisticated social engineering tactics, such as smishing and vishing, to target supply chains extensively. Attackers can also leverage new strategies to manipulate AI training data, infuse malicious algorithm and construct damaging prompts to disrupt the GenAI ecosystem. In 2023, the average number of supply chain breaches that negatively impacted organisations increased by 26 per cent.3 Given this, risk mitigation and data protection will remain a priority throughout 2024.

Green supply chains are the need of the hour. According to a recent KPMG Global report, direct manufacturing accounts for only 5 per cent emissions, whereas supply chain emissions can be 5 to 10 times higher.6 Given this, stakeholders are prioritising sustainability with an increased commitment to ethical and eco-friendly practices. For instance, while tracking Scope-3 emissions is a complex activity (compared to Scope 1 and 2), major global manufacturers have started setting targets for Scope 3 as well. Organisations are also drawing impactful strategies to reduce their ecological footprint by prioritising sustainable initiatives, such as green infrastructure, recycling practices and renewable resources. Further, with supply chains getting digitally integrated, setting up centralised systems can help in enhancing sustainability reporting. Additionally, increasing tech integration, such as enabling control towers and digital twins, is expected to further improve transparency, accountability and traceability throughout the supply chain. Besides this, EV fleets are also steadily growing across organisations. The Indian government is also likely to seek additional resources to enhance the FAME-2 scheme in the upcoming budget to boost EV adoption.

As 2024 unfolds, risk forecast, resilience and adaptability will remain key priorities as stakeholders continue navigating through the dynamic global ecosystem.