Supply chains form the backbone of most, if not all, retail businesses. Your company needs to keep all its supply chain components operating as smoothly as possible. You must deliver goods on time despite shifting customer demands and interruptions brought on by the pandemic and international conflicts. With 2023 around the corner, it's a good idea to keep up with the most recent supply chain trends.
- Six Supply Chain Trends in 2023
- Implementing Supply Chain Trends in Your Business
Many supply chain managers had strategic plans in place or formed ones even as 2022 ends in a month or so. But if you still need to start one, now's the time. To be prepared, executives should evaluate the major trends affecting supply chain management in the upcoming year and beyond.
Supply chain networks experienced severe interruptions as a result of the COVID-19 pandemic. It exposed and aggravated pre-existing problems that plagued supply lines. According to a survey by the Association for Supply Chain Management (ASCM), 66% of respondents reported “some or major” supply chain disruptions.
Since then, supply chains have worked hard to recover from the pandemic and achieve stability. For 2023, supply chain trends were impacted as logistics systems needed to be resilient and agile. Because supply chains risk constant disruption, businesses want to respond to challenges rapidly. Inflation, a decline in consumer expenditure, and a rise in carrier capacity are other important factors influencing the trends.
Seven Supply Chain Trends in 2023
Technology has been a game changer in providing competitive advantages in supply chain management. Companies in retail and consumer products industries have made significant investments to automate their supply chain processes. Management software and robotic systems are among the most desirable upgrades. In recent years, there has been a more significant push to automate supply chain systems to expand on earlier developments.
- Integration of Artificial Intelligence for Automation
Automation and artificial intelligence (AI) are becoming more ubiquitous and used in various industries. Automation involves a machine performing a series of chores and is hardly an innovation. Technology is used in automation to eliminate the need for human input. Automation is usually incapable of independent thought, so the equipment needs to be manually programmed first to function properly.
On the other hand, artificial intelligence (AI) tries to mimic aspects of human intelligence and can "learn" independently. This results in the ability to assist with harder, more challenging tasks. While AI still requires some human input, it uses machine learning to make independent decisions without direct human intervention.
The logistics industry is incredibly complex, necessitating the capacity for planning, resiliency, and flexibility. With the right platform, automation can enable production operations to be decentralized to cost-efficient areas and increase customer satisfaction. Streamlining also helps control costs and reduce the workforce required. Your staff can spend less time doing tedious tasks and focus on more important responsibilities.
There are several ways to incorporate AI and automation into your business's processes. For instance, several companies use AI-based solutions for intelligent inventory management. They even use AI to get efficient transportation route planning. In the future, automated supply chain tracking may be made possible by AI.
- Improved Forecasting
Forecasting economic trends can be incredibly challenging. It's hard to pinpoint which predictions will be relevant to your business. Forecasting has many variables, from seasonal financial performance to data inconsistencies and product shortages.
According to McKinsey, 32% of businesses (the highest among all answers) blamed poor forecasting for their COVID-related supply chain woes. In the “consumer goods” category, only inventory issues weighed higher.
Businesses must develop new strategies to react rapidly to customer needs and improve their forecasting. Make an effort to incorporate cutting-edge technology into your systems. Demand sensing and inventory planning platforms are emerging as some of the most practical innovations to aid forecasting. These could help business leaders better anticipate and understand consumer dynamics and socio-cultural trends.
- Digitization of the Supply Chain
Digitization is converting information into a digital format. It's a growing necessity for future supply chain efficiency. A digitized supply chain can be streamlined, highly mobile, and resilient. All these can help increase your business's bottom line.
With electronic records, you can reduce paper waste through digitization. Additionally, this enables supply chain managers to improve supply chain visibility. Your staff can easily track materials and products through every supply chain step with greater visibility.
The transition to digitization can be challenging. You must pick the best technology for your organization's needs and implement it effectively. Address any urgent internal problems that may develop. But do consider digitization.
- Cloud-based Software
Similar to digitization, cloud-based software solutions are the way of the future for supply chain management. Localized and conventional solutions need to be improved to handle fast-paced online transactions. You need precise, flexible, and accessible solutions for your company to be competitive. It's also equally important to supplement supply chain changes like automation and digitization.
Software-as-a-service (SaaS) products are helpful for supply chain management. SaaS is not only trustworthy and secure but also incredibly efficient and helpful. Since your organization's data gets stored on the cloud, you and your team can access it whenever possible.
- Greater Transparency & Visibility
One of the most important factors for successful supply chain management is transparency and visibility. It tracks components or items on their journey from the manufacturer to fulfillment facilities, then finally to the end user. Added visibility will help management understand the supply chain's overall state and the individual links' status. This additional oversight helps strengthen the overall supply chain. Visibility also ensures that data is accessible to all stakeholders, including customers and internal parties.
With the digitization of the supply chain, achieving increased visibility is much easier. With the right technology solutions, you and your team can rapidly access information on each link in your chain.
One of the most frequently utilized technologies for supply chain visibility is supply chain management technology. It incorporates the internet of things (IoT), AI, machine learning, RFQ management software, container tracking, and a real-time port congestion database. With a transparent supply chain, you can avoid minor issues like order errors or delivery delays and quickly respond to problems. You must have quick and easy access to that information to increase efficiency and dependability. It'll also boost the resilience of your organization's whole supply chain.
Due to increased consumer demand and stricter government requirements, companies are working hard to minimize their carbon footprint along the entire supply chain.
Most top businesses in the world have already planned to fulfill their commitments to sustainable development goals.
Businesses must search for more sustainable ways, including employing circular supply chains and sourcing sustainable raw resources. The purpose of circular supply chains is to refurbish used goods for resale to customers.
B2B buyers are focusing on sustainable purchasing. According to Amazon Business' 2022 State of Business Procurement Report, 63% of B2B buyers indicate that one of their main priorities is to make their purchasing habits more sustainable.
Implementing Supply Chain Trends in Your Business
Due to recent industry upheavals and global events, supply chain management is more complex than it once was. But thanks to tech developments, business owners have several options for streamlining their supply chains and operations.
The less impact supply chain disruptions have on your company, the better off you'll be if you stay on top of these trends. Ensure that your company's supply chain is adaptable enough to withstand global trade challenges, labor shortages, and other unforeseen events. It's never too early to start supply chain planning.
Invest in strategies and solutions that help improve the customer experience. Your goal is to provide products and services to people. Keeping your customers happy by ensuring consistent and reliable service is a great way to generate more sales.
It’s challenging to build a 100% "future-proof" supply chain. However, that might not be necessary given the industry's adaptability and digital development over the past few years.
Cultivate reliable connections with a variety of supply chain partners and logistics service providers, especially if they are local companies. Their convenient location can act as a safety net to help you get through the next supply crisis.
Additionally, you don't need to wait for a catastrophe to support your investments. Preemptively strengthening supply chain resilience can mitigate other issues, such as rising transportation costs.
These contemporary supply chain trends are also powerful tools for bolstering supply chains and enhancing their adaptability and toughness. Technology integration will be crucial for supply chain success in the future. That's why many companies are digitizing their operational procedures. Finding patterns is a critical first step in safeguarding supply chains and improving their effectiveness for the future year.
And getting ahead of supply chain trends is now easier. Planning out your future supply chain strategies is easier with Aratum. Our software suite focuses on providing tech-powered supply chain solutions for businesses. Sustainable and scalable, book a demo today.