Supply Chain Trend Roundup

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The world’s supply chains have come to the forefront of everyone’s minds lately. A term that was once reserved for industry and technical publications has become mainstream, and everyone is paying attention. Here are some of the top supply chain-related trends and happenings that made the news headlines in February. 

Walmart Hits Supply Chain Climate Goal Six Years Early

In 2017, Walmart announced a bold ambition to work with its suppliers to reduce, avoid or sequester 1 gigaton (1 billion metric tons) of greenhouse gas (GhG) emissions in product value chains by 2030. Known as “Project Gigaton,” the initiative found Walmart merchants and suppliers working—project by project, year by year—on energy efficiency, packaging redesign, food waste reduction and trucking load optimization.

In February, Walmart announced that its suppliers have reported projects that are expected to exceed that 1 billion metric ton mark— helping the retailer reach its goal six years ahead of schedule. 

Now, Walmart says it’s working to improve and expand Project Gigaton for the benefit of its customers, suppliers and the planet while staying the course toward the retailer’s goal of zero operational emissions—Scopes 1 and 2— by 2040. For example, it’s enhancing estimates of its Scope 3 footprint and working with suppliers on new initiatives. “We are also considering how we can engage customers in lowering emissions in ways that will help them save money and live better,” the company says. 

Red Sea Ocean Traffic Disruptions Continue

Shipping routes are adapting to Middle East tensions and finding ways to get oceangoing vessels safely through an area where rebels continue to disrupt normal traffic. In February, Maersk warned that Red Sea disruptions could extend into the second half of the year, and that heavy congestion could delay U.S.-bound goods. And as with any typical supply-and-demand situation, the delays and issues may also drive up shipping rates. 

“Be prepared for the Red Sea situation to last into the second half of the year and build longer transit times into your supply chain planning,” Maersk’s head of North America, Charles van der Steene said, as reported by Reuters. “Many customers factor a cost per unit into their budgeting, and if that fundamentally changes due to all of this volatility, it could have a big impact on overall costs.”

The U.S. Department of Defense (DOD) says it’s taking steps to restore stability in the Red Sea area. Since November, the Houthis have conducted at least 48 attacks against commercial shipping and naval vessels in and around the Red Sea through which 15% of all global trade flows.

The DOD says that the U.S., in coordination with allies and partners, is taking “military, diplomatic and economic steps to impose costs on the Houthi leadership and degrade their ability to conduct attacks on commercial shipping.”

Is Generative AI the “New Oil” for Supply Chains?

Just when we all thought artificial intelligence (AI) was impressive enough, along comes generative AI, or the “deep-learning models that can generate high-quality text, images, and other content based on the data they were trained on,” according to IBM.

The supply chain is one area that experts see as being ripe for an infusion of GenAI. In “How Generative AI Will Enhance The Supply Chain,” futurist Bernard Marr says GenAI can be used to forecast demand, manage risk, source/manage suppliers, automate negotiations with vendors and optimize logistics networks. The technology can also be used to enhance the production process by accelerating design and using predictive maintenance to get out in front of issues that would otherwise result in equipment downtime. 

“Supply chains have always been in a state of evolution. Generative AI is the latest technology to offer improvements and innovation – potentially the most transformative technology – but it won’t be the last,” Marr writes. “As has always been the case, those organizations that can embrace transformation in a strategic, thoughtful way are most likely to succeed. Everyone else risks being left behind.”