Supply chains have been through a transformative couple of years. Twelve months ago, all eyes were on global shortages and their impacts on product availability for customers. Almost overnight, Russia’s invasion of Ukraine caused inflation and recession to become the number one agenda item, having clear knock-on effects on supply chain management and strategy. All the while, the industry continues to battle skills shortages across a range of key roles.
But despite some stark headlines over 2022, there are grounds for optimism and opportunity. This is a time of evolution in the role of the supply chain professional, with the focus shifting towards greater decision-making and progress towards sustainability goals.
In 2023, here are the key trends and forces that will shape the supply chain industry.
1. Supply chains will be top of mind for the C-suite as recession risks rise
As the economic landscape becomes increasingly fraught, business executives must ensure their supply chains are recession ready. The C-suite will realise the need to shift from siloed approaches to their supply chain, instead turning their attention towards integrated, concurrent supply chain processes supported by advanced planning solutions that provide the agility and resilience needed to successfully navigate financial disruption.
2. The continued threat of recession will make it essential to consider how much stock to hold
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Recessionary pressures will cause consumer spending to slow down and encourage purchases of lower-ticketed items and brands. To avoid getting caught out with too much or too little stock, supply chain planners will need to embrace advanced planning tools to rapidly sense changes in demand and plan scenarios and collaborate in real-time along the end-to-end supply network.
3. Businesses will need the agility to manage sudden swings in supply and demand
The bullwhip effect will be prominent for retailers, where previously in-demand supply begins to finally arrive in stock after lengthy delays, but the demand no longer exists. This will lead to excess inventory in many cases, highlighting the need for fast and accurate decision-making.
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4. Supply chain technology will combine execution and planning to enable agility and quicker ROI
Companies will continue to make great strides in aligning their supply chain management and planning. The latest innovations in AI and machine learning will empower them to act with speed and agility to maximise ROI.
5. Supply chain professionals will need to start communicating in the CFO’s language
As the link between supply chain agility and wider business performance becomes ever clearer, supply chain executives should seize the opportunity to truly connect with the C-suite. To do this, they will need to translate what they do into the chief finance officer’s (CFO’s) language, articulating the value that is created for the entire business to convince the board to justify further investments in supply chain.
6. Sustainability will be factored into every stage of planning
Heightened awareness and increased sustainability KPIs are transforming how planners make data-driven decisions. In 2023, we will see businesses embed sustainability into every link of the supply chain – from energy sourcing to the production, storage, delivery, and disposal of materials, and everything in between.
7. Resilience will be key to providing a tangible ROI
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Resilience is more than a buzzword in the supply chain world – it’s a strategic requirement. With disruption and volatility set to continue into 2023, businesses will need to systematically stress-test their supply chains to ensure they are resilient enough to handle whatever is thrown at them. This will not only help limit the impacts of the inevitable disruptions ahead but will also empower supply chain leaders to make more confident decisions faster, helping to drive further ROI.
8. Supply chain transformations will happen faster than ever before
As consumer demands intensify, supply chains are having to change and evolve at a faster rate. Therefore, we will see modern digital technologies continue to accelerate supply chain transformation initiatives, helping businesses to break silos and keep pace in a rapidly changing world with seamless, end-to-end supply chain planning.
9. Excel will lose favour to more agile, time-saving tools
Legacy technologies and Excel spreadsheets are simply no match for today’s globally connected multi-enterprise supply chains. More and more businesses will transition from Excel to advanced supply chain planning in 2023, reaping the benefits of more agile, intuitive, and concurrent digital solutions.
10. Supply chains will need to sense, plan, and execute changes faster than ever before
In today’s fast-paced and unpredictable world, rapid, actionable insights into every aspect of your supply chain can make the difference between sinking and swimming. Therefore, supply chains will need to have the ability to know sooner and act faster in relation to risks and opportunities - and they can achieve this with software solutions that provide end-to-end visibility across the entire value network of suppliers, partners, and customers.
11. Supply chain planners will no longer have to choose between speed and accuracy
It’s now possible to have the best of both worlds. New technologies are coming to the fore that empower supply chain planners to make fast and accurate decisions using multiple advanced analytical approaches. For example, a proper analytics platform will be able to automatically detect and fuse the best combination of heuristics, optimization, and machine learning to provide highly accurate answers at unprecedented speed.
12. Digital supply chains will be built to empower people, not replace them
The most agile and resilient supply chains are the ones that combine technological innovation with top human talent. Therefore, more supply chains will use AI in conjunction with digital process automation to complement and enhance the skills of employees, freeing them from tedious manual tasks to focus on more value-adding activities.
Matthew Spooner is an industry thought leader at Kinaxis
