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Five Supply Chain trends that will define our 2023

Supply Chain Trends in 2023

Working in the supply chain over the last two years has been an exercise in crisis management. Planning was difficult as most of us were in survival mode. Whilst there are glimmers of “normality”, we are still faced with challenges around global disruptions due to factors such as the war in Europe and shipping constraints. Immediate hurdles to overcome are rising inflation, taxation, energy supply constraints and changes in consumer spending.

2023 will be a year of continually realigning our plans within that fluctuating economic landscape. Businesses will have to move from being reactive to being more proactive. Accenture’s view for 2023 is “to contend with an uncertain future and build long-term value, European businesses need to redesign their supply chains around three key ideas: Resilience, Relevance and Sustainability”. 

Focus on limiting risk

Traditional supply chain risks present in the pre-COVID-19 years will still apply. Added to these risk areas are problems carried over from 2022, some of which we have little direct control over such as labour shortages, freight delays, energy supply constraints and the possible resurgence of COVID. A return to “normal” is not on the horizon due to geopolitics affecting the supply of raw materials and fuels. What we can do is create contingency plans to ensure business continuity, COVID may reappear, climate change may bring us drought or floods. Cyber-attacks are also a real threat. They can include the theft of customer master data as well as hacking and taking data hostage. Companies in 2023 need to assess their exposure to this risk and take preventative action. 

With these issues in mind, we have identified five main trends:

The development of automated vehicles and their application in the warehouse on the road will continue. Machine learning will be used to identify patterns and trends so that adjustments to systems can be made easily with less human intervention. A warehouse management solution (WMS) will help reduce operating expenses. The right one will provide clear visibility into the storage and movement of goods, increase security and strengthen relationships with suppliers and customers. Along with mobile technology tools that use IoT techniques you can improve inventory tracking and automate picking and packing processes. 

There will continue to be an increased focus on sustainable practices in all their forms due to tighter legislation and public commitment to environmental, social and governance (ESG) goals. Companies are under pressure to reduce their environmental footprint e.g., carbon emissions, eliminate waste, reuse packaging and conserve energy. Businesses that recycle products to make new ones not only save money but use fewer raw materials. The consumer is also exerting influence on these eco-issues and is even prepared to pay a premium for it. 

  • Data visibility and digitisation

Organisations need access to better-quality data in real-time to stay competitive. Data visibility means transparency, i.e., being able to track and trace shipments throughout the supply chain from sourcing to delivery. The lack of immediate access to reliable fresh data and the drawbacks of error-prone manual methods are limiting the growth of businesses. Digitisation using technology tools streamlines existing processes. Investing in analytics solutions that include the latest intelligent tools such as AI and blockchain will increase efficiency at every stage. The latest software platforms can easily integrate multiple stand-alone software solutions with enterprise resource planning tools (ERP). Technologies that prioritise data visibility will be a necessity beyond 2023.

“Green” logistics is becoming more important. There is a notable move towards electric and hydrogen-powered vehicles which is accelerating. It is anticipated that shipping and carrier transport rates will drop (or rise more slowly) as supply bottlenecks decrease and fuel prices stabilise. Partnering with 3PL providers has many benefits beyond cost savings such as access to streamlined processes using the latest transport management systems (TMS). When consumer spending slows, more transport capacity becomes available softening rates.  Exploring alternative sources of supply and transport providers is recommended.

  • Managing labour shortages in a tough market

Since 2020, partly propelled by Brexit and COVID-19, there has been a shortage of workers in the supply chain, especially HGV drivers. As a result, companies are having to upgrade working conditions, be more flexible and increase wages to retain employees. More broadly, the skills that are required are changing, partly due to the use of improved technologies. Recruiting and retention will continue to be a challenge in 2023.

Modern supply chains are becoming more complex. The Supply Chain Consulting Group helps companies find cost-effective solutions to address some of the issues that will arise in 2023. These may be to mitigate risk, optimise processes or advise on selecting suitable warehouse or transport technology solutions.

If you’d like to learn more about how The Supply Chain Consulting Group can help you, contact us at Contact SCCG LTD – The Supply Chain Consulting Group 

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