Supply chain trends for 2023 to guide investors come from a quickly developing logistics industry and the need to keep up with the current era’s rapid technological breakthroughs.
Although it can be challenging for supply chain managers and business executives to keep up with these developments, doing so is essential to maintaining the resilience of supply chains and boosting the success of a company. Staying ahead of the supply chain management (SCM) trends is preferable to investors becoming reactive.
Continue reading to discover the newest supply chain trends for 2023.
Risk Mitigation and Adaptability: Supply Chain Trends for 2023 to Guide Investors
Supply chains are continually in danger of disruption in a world that is becoming more volatile and unpredictably organized. There is no control over the weather, political outcomes, or the consequences of a pandemic that has never been seen before, but supply chain management can influence how to respond to such challenges.
It is SCM’s obligation to reduce risk as much as possible to ensure the supply chain is steady even in tumultuous times. If something changes, it is then possible to immediately pivot and lessen the effects of the disruption. Simply said, anticipating the disturbance and planning a strategy beforehand can help one succeed whether it is a part of supply chain trends.
Automation and Artificial Intelligence: Supply Chain Trends to Guide Investors
Automation and artificial intelligence (AI) are being used more often across a wide range of industries. Automation is essentially a machine carrying out a sequence of tasks, and it has been around for decades. Automation uses technology to reduce the need for human input. Automation lacks intelligence, so the machinery can only carry out the tasks for which it has been specifically programmed.
On the other hand, artificial intelligence (AI) aims to imitate elements of human intelligence and has the ability to “learn” on its own to help with harder, more complicated jobs. AI still needs some human input, but it also uses machine learning to make decisions on its own, without specific guidance from a human.
There are numerous ways to integrate automation and AI into a company’s process. For example, AI-based solutions for intelligent procurement, inventory management and even transportation routes in supply chain management procedures are currently being used in some companies. AI can potentially be used for automated supply chain tracking in the future.
The key is identifying chores and procedures that save time or energy; frequently, the best duties are laborious or difficult. These kinds of jobs can be automated, allowing companies to spend more time on things that only a person can complete and maximizing your investment. This is the most important of all the supply chain trends.
Customization: Supply Chain Trends for 2023 to Guide Investors
Expect to see a higher level of personalization in various supply chain segments, which may necessitate segmenting supply chains and developing unique strategies and approaches for each fragment.
Customization expansion becomes feasible as the focus of enhancing other supply chain elements shifts. For instance, if a supply chain can automate an order processing system by segregating regular orders into one area and customized orders into another, it will be easier to manage unique custom orders. Therefore, supply chain managers can focus more time and attention on product customization and ways to streamline other aspects of the organization.
Digitization: Supply Chain Trends for 2023 to Guide Investors
The process of converting information into digital format is referred to as digitization. Digitization is a must for guaranteeing the supply chain’s future. According to experts, successful supply chain digitization may streamline, mobilize, add resiliently and strengthen a supply chain to aid a company’s bottom line. In electronic supply chain management, or e-SCM, this is a significant development.
Digitization is also increasingly common, as carriers and even government agencies are beginning to require electronic documents. As a historically paper-heavy industry, these industry trends will push companies to prioritize going digital.
Remember that switching to digital can be difficult if a company has not gone completely digital. To fulfill the needs of an organization, choosing the appropriate technology, deploying it properly
and resolving any internal issues that may arise is essential. Supply chains and organizations cannot afford to ignore digitization.
Heightened Visibility: Supply Chain Trends for 2023 to Guide Investors
Transparency and visibility, or the capacity to trace components or goods from the manufacturer to processing facilities or the end user, are among the factors that are most crucial for supply chain management. To strengthen a supply chain, more visibility will enable management to better understand the overall state of the supply chain as well as the status of individual links. Additionally, visibility guarantees that all stakeholders, including customers and internal parties, have easy access to data.
Increasing visibility is now a highly attainable objective for many businesses as a result of the supply chain’s digitization. With the correct technical solutions, instant access to information on any link on a supply chain is possible. Modern management technology, which includes Internet of Things (IoT), artificial intelligence (AI), machine learning, container tracking and a real-time port congestion database, enhances supply chain visibility.
With more supply chain transparency, minor problems such as order errors or delivery delays can be more rapidly resolved. It is critical to have quick and simple access to that kind of information if a supply chain is to improve its effectiveness, dependability and resilience.
Cloud-Based Solutions: Supply Chain Trends for 2023 to Guide Investors
Cloud-based software solutions are the future of supply chain management, much like digitization. Solutions for supply chain management that are localized and traditional will not suffice. Organizations need precise, adaptable and easily available solutions to remain competitive. This is as crucial as digitization and automation supply chain trends.
For supply chain management, software-as-a-service (SaaS) approaches are advantageous. SaaS is not only dependable and secure but also very effective and practical. Accessing the data required at any time and from any location is possible when data is kept in the cloud. The effectiveness offered by SaaS solutions is essential to help an organization transition into an increasingly fast-paced future with a global and digital supply chain.
Need for Cybersecurity: Supply Chain Trends for 2023 to Guide Investors
As is true for most industries, cybersecurity is a growing concern in supply chain management. According to a recent report, software supply chain attacks in 2021 grew by more than 300% compared to the year before. Cyber-attacks on supply chains can hold data hostage for financial gain or steal confidential customer information.
Therefore, companies in 2023 need to assess their digital supply chains for risk and prepare for and protect themselves from potential attacks.
Reshoring and Nearshoring: Supply Chain Trends for 2023 to Guide Investors
For some manufacturers, reshoring and nearshoring will be a top priority.
While some companies increased inventories, others took a different approach to address supply chain pressures caused by the pandemic. Many companies have reshored or nearshored their manufacturing or relocated the process from Asia to the United States, Mexico or another country nearby.
This practice can come with both benefits and drawbacks. Manufacturing in the United States and Mexico is often more expensive than in Asia, but transit times are much faster. Reshoring or nearshoring supply chain components can also bypass any potential issues caused by shortages or backlogs. Therefore, it is likely more companies will reshore or nearshore in the year ahead.
Lower Carrier Rates: Supply Chain Trends for 2023 to Guide Investors
One of the most promising trends for 2023 is the continued downward trend in carrier rates.
At the height of the pandemic, consumer spending on goods skyrocketed and carrier capacity diminished. As a result, carriers hiked rates for both sea and land transportation, and service levels worsened as labor shortages and lockdowns caused transportation backlogs. Shippers had almost no choice but to deal with delays and other issues.
As demand has leveled off, capacity has increased and backlogs have subsided, this trend has started reversing and it is expected that the industry will continue to rebalance in 2023. Of course, some accessorial fees for issues like overlength and over-dimensional freight will likely stick around for a while. But in addition to lower overall freight costs, it is likely we will also see improving customer service as carriers once again have to compete for business and customer loyalty.
Geopolitics: Supply Chain Trends for 2023 to Guide Investors
Geopolitics have impacted supply chains for centuries and will continue to do so. In recent months, international politics and current events have come to the forefront of the supply chain conversation.
The Russo-Ukrainian War will have the potential to upend supply chains around the globe for as long as it continues. Meanwhile, any changes in the trade relationship between China and the United States could drastically transform the American import landscape.
Sustainability: Supply Chain Trends for 2023 to Guide Investors
Changing consumer demands and stricter government regulations will continue to push companies toward green practices in 2023. Businesses will continue to search for and adopt sustainable efforts, from sourcing sustainable raw materials to evaluating greenhouse gas emissions in transportation.
Furthermore, circular supply chains, where manufacturers refurbish discarded products to then return or sell back to customers, is becoming increasingly popular. Whether they realize it or not, consumers will be purchasing more recycled and refurbished goods in the coming years.
Supply Chain Trends for 2023 to Guide Investors: The Bottom Line
These modern supply chain trends can also be effective instruments for strengthening supply chains and making them more adaptable and durable. Future supply chain performance depends on technology integration, so many businesses are digitizing their business processes. The identification of trends is an important first step to protect supply chains and make them more efficient for the upcoming year.
Adam Johnson writes for www.stockinvestor.com.