Supply chain trends 2023
The COVID-19 pandemic caused major disruptions within supply chains and worsened issues supply chains had already been facing. This year, supply chains have had to work towards recovering from the pandemic and reaching stability. This has affected the supply chain trends for 2023. Other factors affecting the trends are inflation, decreased consumer spending, and increased carrier capacity. Here are seven supply chain trends for 2023.
1. Businesses within supply chains will become more proactive
The pandemic was a major disruption within supply chains and led to many other little disruptions throughout the supply chain. Businesses and supply chain professionals fought to overcome these obstacles and have finally reached a point where things are normalising. But to prevent this from happening again, many businesses will likely use a proactive approach. Businesses would do this by reviewing their supply chain strategies and business models to see what can be improved to handle potential crises in the future.
2. Carrier rates will decrease
Because of the pandemic, consumer spending had increased, and capacities had decreased. This led to carriers increasing rates for transportation while their service standards decreased due to labour shortages, global lockdowns, and backlogs. This demand has decreased, so capacities have normalised and backlogs have lessened. Because of this, carriers are likely to decrease their transportation rates and improve on their service standards. Businesses now have an opportunity to become competitive within their field again and build customer loyalty through better service delivery.
3. Businesses will start reducing their stocks
Before the COVID-19 pandemic, businesses tended to practice lean inventory management. Lean inventory management means that businesses would only have stock of the items they need and would only order more when necessary. This is a smart tactic, but it backfired when the global lockdowns were implemented. Because of this, businesses along supply chains did not have stock for long periods of time, and this negatively affected businesses. Once the global lockdowns were eased, businesses increased their stocks to prepare for possible additional lockdowns. But since the pandemic seems to be in its end stages, businesses are likely to go back to lean inventory management.
4. Digitisation will remain a priority
Even before the COVID-19 pandemic, digitisation had been a prominent trend. Digitisation decreases the need for paper and requires electronic documents. It also allows supply chain managers to increase visibility across supply chains. With visibility, supply chain managers can track materials and goods all along the supply chain.
5. Wars will affect supply chains
Geopolitics have and will always affect supply chains. A major geopolitical event has been the Russian-Ukrainian war which has negatively affected supply chains across the globe. Another geopolitical event that could affect supply chains is the trade relations between China and the United States.
6. Cyber security will be prioritised
Software supply chain attacks continue to grow and are becoming more sophisticated. Cyber hackers could attack a supply chain to access its data and use it for financial gain or to steal confidential customer information. Businesses within supply chains, and many other industries, will focus on assessing their business for risks and improving their protection against cyber-attacks.
Businesses across supply chains will strive to reduce their carbon footprint because of customer demands and stricter government regulations. Businesses will look for ways to be more sustainable, and examples of this are finding sustainable raw materials to use and using circular supply chains. Circular supply chains function to refurbish used products to sell back to consumers.
The Bottom Line
Many of these mentioned trends have been coming on for years, while others are working towards taking supply chains back to where they were before the pandemic. No matter what trend is being implemented, following new trends can be risky and difficult. Businesses should evaluate the specific trends they would like to make use of to make sure that the actions taken would be beneficial to the business.