Supply chains have been through a transformative couple of years, and industries across the globe continue to battle with the disruption that comes with it. Twelve months ago, all eyes were on global shortages and their impacts on product availability for customers. Almost overnight, Russia’s invasion of Ukraine caused inflation and recession to become the number one agenda item, having clear knock-on effects on supply chain management and strategy.

Industries across the globe are striving to optimize execution, diminish risk, improve dexterity and identify ways to gain a real competitive advantage. To achieve these goals, it will be essential to create data-driven networks, maximize the latest digital transformation capabilities, prioritize risk management and resilience, streamline logistics, and much more. Getting ahead of these supply chain trend s and other key trends enables supply chains to proactively shape a successful, sustainable future. Read on to discover what’s coming in 2023 and beyond.

1. Digital Supply Chains

The first supply chain trend we will tackle is Digital Supply Chains. Successfully digitizing supply chains requires large-scale sensor implementation via the internet of things; digital twins; shared internal and external interfaces, such as cloud-based networks; and process automation and verification. Best-in-class organizations will adopt digital supply chain capabilities or be left behind by nimbler and more efficient competitors.

Remember that switching to digital can be difficult if you haven’t gone completely digital. To fulfill the needs of your organization, you must choose the appropriate technology, deploy it properly, and resolve any internal issues that may arise. You cannot, however, afford to ignore digitization.

2. Cyber Crimes

In 2023, cyber criminals will likely be even more sophisticated when it comes to infiltrating supply chains to damage or steal from businesses. The supply chain can offer vulnerabilities that provide external parties with a pathway to get into your systems, particularly via your supplier network. Criminals could also hack in through basic warehouse equipment such as a barcode reader or via Internet of Things (IoT) devices applied within your manufacturing and other operational sites. Cyber risk will likely be compounded if you rethink your supplier networks and make changes to friendshore/nearshore, or invest in new technologies.

3. Labour Shortage

Supply chain leaders have seen a massive labour shortage in recent years, largely due to the external challenges we’ve faced such as pandemics, inflation, political instability and so on. Labour shortages in every industry create a ripple effect to multiple sectors, making this issue all the more difficult to solve. Take an understaffed factory for example. The lack of available workers causes production to slow and, in some cases, stop completely, resulting in skewed inventory levels, with distributors feeling most of the shock. In logistics, the labour shortage impacts the transport of goods between parties, resulting in delays and unhappy customers.

As the world is constantly shifting and adapting, we are urged to change the way we work. To manage such an eminent risk, supply chain leaders are encouraged to re-evaluate their hiring process, retention practices, compensation, and strive to create a balanced work environment for all employees.

4. Green Supply Chains

Due to increased demand for sustainable practices from investors and consumers alike, there is growing pressure on businesses to adopt green processes in the supply chain. Most of an organization's indirect emissions are produced from their supply chain, so climate-smart supply chain strategies that reduce carbon footprints will be significant in 2023. 

A sustainable supply chain is one that adopts environmental and socially sustainable practices at every stage of production in order to protect both people and the environment. Growing legislation is making eco-friendly supply chain strategies a legal requirement, meaning now is the time to adapt. When it comes to sustainability in the supply chain, environmental impacts are not the only aspect businesses should consider – it can also reduce waste and associated costs, as well as allowing companies to create improved partnership opportunities through increased legitimization of the business. Developing a supply chain strategy that accounts for excess waste and environmental impact will be essential in 2023 to ensure a robust supply chain that is equipped to deal with volatility.

5. Automation Through AI

The last supply chain trend we will look at is Automation through AI. Integrating AI into supply chain management strategies allows processes to be automated. AI can also identify patterns in the supply chain, which is crucial for forecasting and planning heading into 2023. By using an AI-based software solution, such as one provided by Flowlity, businesses can better manage their inventories and leverage algorithms to have the right amount of products at the right place. 

Automation takes a lot of the guesswork out of planning and forecasting, and increases efficiency in the supply chain by reducing human error in calculations. AI systems can also alert users to potential disruptions and risks of over or under stocks, allowing organisations to react before it becomes costly. Solutions like this will become an integral part of any supply chain process.

Disruption to supply chains is a permanent fixture, and at PLS we believe these supply chain trend s will be integral to getting control of what's ahead in 2023. 

What supply chain trend did we omit? Let us know in the comments section.