What will be the top supply chain trends of 2023?
2022 has been a tumultuous year for global supply chains, driven particularly by geopolitical tensions that show no signs of easing in the short term. So, what trends will impact supply chains that businesses need to consider in 2023? Here are the main themes:
Challenges to international cooperation
Ongoing geopolitical tensions have seen nations step back from interdependence and cooperation and focus their attention inward. This is an understandable caution, as global tensions always cause fears of material shortages or affected trade routes. Governments are looking at ways to boost self-sufficiency for manufacturing and materials supply, and building trade links with close, friendly nations (nearshoring) to boost goods supply.
International crime-fighting bodies are warning businesses that cybercriminals are likely to increase their activity to the next level in 2023. When it comes to stealing your business’s data and finance, cybercriminals are becoming increasingly sophisticated at hacking system vulnerabilities and gaining access to business networks. Whether it’s via a warehouse barcode reader or a partner IoT device, supplier networks will be forced to invest in powerful new security technologies and review their supplier networks.
Continuing material shortages
Global supply chains are likely to continue to experience a lack of available materials. Businesses may struggle to obtain the materials, parts and maintenance components that they need to manufacture and maintain their factory lines. Commodity prices may fluctuate as availability is constrained, with categories such as timber, steel, resin, plastic, diesel and fuel particularly vulnerable. Businesses will be working hard to build strong supply chains that can adapt and overcome these supply chain challenges.
Changing manufacturing footprints
The escalating costs of energy and key manufacturing inputs will mean that footprints will change. Manufacturing businesses will look at nearshoring again or look to bring their operations onshore entirely. This won’t happen overnight, but plans are likely to be initiated now. Online retail costs will also rise as businesses look for customisation in their product ranges, in response to customer demand for personalisation.
Supply chains will merge for retail and distribution
It can be challenging for businesses to get their products into the hands of their customers, even with more channels than ever. Retailers are looking at their stock distribution networks and working out how they can unify their commerce and distribution for a more cost-effective, reliable solution that meets the needs of increasingly demanding customers. These will include strategies such as the development of micro-fulfilment centres, investment in unified commerce technologies, and supplier reviews.
Greater technology investment
The trend for investing in cloud-based technology will also grow, to transform customer engagement, back-office functions, supply chain management and operational capabilities. There will also be more investment in warehouse automation and supply chain analytics to reduce costs and waste, build more stable businesses and improve operations. This technology investment will also help businesses to run cleaner, greener operations as part of their sustainability strategies – another core focus for 2023.
In conclusion, 2023 looks as though it could be a challenging year for the supply chain industrry. Those businesses that plan, invest and have the flexibility and adaptability needed to thrive will be best placed to meet these challenges with a stronger, successful operation.
At IFC, we are well positioned to meet these upcoming challenges and trends, get in touch to learn more about how we can support you.BACK TO NEWS