Home » The top supply chain trends of 2023
The world of supply chain is constantly changing, with new trends always emerging. Understanding these top trends is necessary for companies looking to stay ahead of the competition.
In 2023, there will be a few surprises in the world of supply chains, specifically in the technology and consolidation arenas. Experts say companies need to rapidly engage and improve technology to remain competitive in this ever-changing landscape.
According to Heath Zarin, founder, and CEO of EV Cargo, the global demand may increase during the year’s first half. Subsequently, the second half comprises softer economic activity.
In this sense, strategies such as mergers and acquisitions (M&A) are crucial for businesses trying to stay ahead of the curve. Procuring inexpensive transportation is the major goal of supply chain managers, as they aim to maximize the efficiency of their supply chains while keeping costs low.
Development of trends
As 2023 is upon us, companies must be aware of new supply chain opportunities and potential disruption. These are ushered by rethinking distribution, increasing investments into technology, focusing on sustainability initiatives, and enhancing visibility into multi-dimensional data sets.
“The pandemic increased the cadence, variety, and intensity, which overwhelmed an already-burdened system. The earlier companies engage and leverage technology, the more impact and improvement they can realize in logistics and value chains,”Julie Gerdeman, CEO of Everstream Analytics, noted.
Companies should look for signs to make supply chains resilient to ensure they are ready for any issues on the demand side. They should put emphasis on faster response times to constantly changing market conditions and customer needs.
The projection for the blockchain technology market is that it will reach an average CAGR of 51.3% from 2022-2028. Analysts expects that the market size could surge from US$253 million in 2020 to US$3,272 million by 2026.
A new supply chain technology, such as blockchain technology, offers several advantages that can improve how companies manage their supply chains. Notably, decentralized applications of this technology have led to increased efficiency in various areas.
In 2023, companies will invest more in blockchain technology to improve their supply chain visibility, become supply leaders and reduce delays caused by waste or low-quality products. At the same time, they’ll strive to increase efficiency and reduce costs.
Blockchain-based platforms let companies create smart contracts and access real-time data analytics, leading to improved foresight based on supply, demand, and economic trends.
There has been development in cross-border payments, remittance, exchanges, internet banking, trade finance, Know Your Customers (KYC), and risk and compliance. From these advantages alone, it becomes clear why many businesses are considering integrating this new supply chain technology into their chains in the coming years.
On the side, the digitalization and challenges posed by outdated systems render limited investment in blockchain technology. However, adoption rates are still low despite having the potential to thrive due to its long-term benefits.
A survey revealed that only 1% of chief information officers had implemented blockchain technology, and 8% were testing it. Although minimal, such move from execs imply that blockchain’s potential to solve problems in SME supply chains is recognized.
“We are excited about having the first trades going through the platform in the coming weeks and, from there, start demonstrating the benefits of the solution, in particular, the cost savings from streamlining operations, improving access to finance and enabling mineral provenance,”Lamora said.
Smart Logistics, IoT, and Robotics
Companies are now leaning towards smart logistics solutions that utilize the Internet of Things (IoT) and advanced robotics. Said technologies aid in addressing labor shortages, supply disruptions, and demand surges in the distribution and supply chain sectors.
A supply chain covers the constant flow of information, product, and funds between different stages. Specifically, companies emphasize the need for visibility and efficiency within the entire system.
IoT technology improves visibility by putting sensors all over the transportation system. It also provides real-time tracking updates. Such data enables business owners to optimize assets for a better return on investment (ROI).
Advanced robotics is also playing a role in the technology supply chain and helping businesses manage their supply chains efficiently and more reliably than ever before. Automating processes such as sorting items into bins or filling orders with things picked from shelves can be quickly completed with robots while eliminating human errors.
A better supply chain transparency through IoT devices would help companies build resilience against disruptive events by better-anticipating issues. Additionally, robots can offer predictive maintenance, one of the current trends in supply chain management.
AI and Machine Learning
Both artificial intelligence (AI) and machine learning usage in the supply chain industry is predicted to grow in 2023 . They are considered major supply chain trends.
Both have the potential to revolutionize supply chains by automating decision-making and customer service. They can also aid in optimizing inventory flow with little to no human involvement.
Companies using AI can benefit from improved quality products, a new perspective on manufacturing supply chain practices, and better efficiency gains from automated production processes.
With increased investment into technological advancements, businesses can use optimized analytical systems that leverage data efficiently. At the same time, they can reduce costs associated with manual labor.
Supply chain kinks force small businesses to be more agile and creative. AI can help make processes more efficient by automating tasks such as ordering materials or predicting customer demands.
Those who have adopted AI in their supply chain operations have seen remarkable results compared to traditional methods. With a 15% decrease in logistics costs, a 35% increase in inventory levels, and a 65% boost in service levels reported by early adopters alone. AI enables end-to-end planning in the supply chain, one of the key factors contributing to the said impressive results.
Adopting cutting-edge solutions such as AI for businesses is garnering attention. It presents an opportunity for cost savings and streamlined efficiency.
The realities of climate change have made 2022 a challenging year for supply chain opportunities across industries. Unexpected floods, fires, and hurricanes devastated countries, leading many businesses to take a toll.
Climate change and environmental pollution have always been major global concerns. Now, businesses are doing their share of the responsibility to protect the environment. Sustainable means have emerged as key procurement trends for 2023.
There is a boost in awareness of proactive climate supply chain planning and issues among key industry players. Some “trends to watch” in understanding the risk interdependencies include sustainable recycling, reducing transport distances, convenient delivery vehicles, and using renewable energy resources.
According to KPMG, a global organization, climate-smart supply chain planning is set to be an important factor this year. Businesses are encouraged to use predictive modeling techniques and smart analytics tools. Such will allow them to understand potential risks and plan for future disasters.
Notably, green logistics trends involving the use of energy management systems to monitor and decrease carbon footprints will also be apparent. Thus, using sustainable means and ensuring a sustainable supply chain trends will protect the environment while increasing profits and customer loyalty.
Improved Home and Last Mile Delivery
Better home and last mile delivery ushered by real-time shipment tracking is becoming a critical supply chain trend. Businesses need to be aware of the latest trends in manufacturing. They should aim to meet the demand for fast delivery services.
“We’re noticing a huge push and pressure on the fulfillment side to get orders turned around on a much faster scale, and pace than a lot of the technology is capable of doing today,”Michael Armanious, Vice President of Sales and Marketing at Datexcorp, stated.
Consumers and shippers can now monitor their deliveries actively and proactively manage unexpected exceptions. Yet the growing number of delivery providers presents operational supply chain challenges for all involved parties.
Implementing dynamic route optimization techniques and real-time exception management technology is vital. Automation will become an integral part of shaking up this process to lessen labor shortages, drive efficiency, and free up time for core customer service.
In 2023, supply chain professionals must also focus on end-to-end planning. This is to stay ahead of the competition and mitigate disruptions in their supply chains. Predictive analytics will also play an important role in supply chain opportunities. It will enable shippers to anticipate future problems or needs before they occur.
The global supply chain industry faces new possibilities in 2023. Sustainable initiatives, blockchain technology, AI, and machine learning are predicted to be some of the top supply chain management trends.
Said trends provide an exciting glimpse into a future of modernized logistics. Such will ultimately benefit both customers and companies alike. However, many businesses face challenges posed by outdated systems and limited investment in digitalization. Thus, leading to low adoption rates of these technologies.
It is crucial for companies to invest in technology to become supply leaders. Being aware of the trends is important because it provides the opportunity to plan ahead.