After three years of disruption from the pandemic and its legacy of global economic uncertainty, supply chain leaders might be forgiven for lying down and taking a well-earned, three-year-long rest.
How can we think about planning for the future when the present is in such turmoil? After experiencing everything from a blockage in the Suez Canal to a shortage of container boxes, hurdles are seemingly impossible to predict.
But the challenges of supply chain management continue, and 2023 promises to be a different kind of year. The obstacles that have been hurled at our logistics over the last three years have created a spotlight on the concept of a resilient supply chain. No company can be successful today with a poor supply chain.
It’s not enough to be low cost or to shift goods from one location to another reliably; the real test is the ability to withstand curveballs — wild curveballs, at that.
What Will Supply Chains Look Like in 2023?
Are we in for another year of stumbling around in the dark, or is there light at the end of the tunnel? The answer, perhaps, is yes and yes.
On the one hand, challenges continue for supply chain leaders as they attempt to evolve. Missed sales, working capital issues, excess inventory, unrealistic expectations and bad margins will haunt many of us for a while longer. And though these problems are clearly apparent, the solutions and adjustments needed to fix them are less obvious.
However, with a growing awareness of these problems — and of the flaws in traditional, siloed planning and decision-making — efforts can be made to transition to intelligently optimized operations. Time, effort and budgets are finite resources. Today’s business complexity demands rapid trade-offs and compromises as supply chain leaders reimagine their operations to drive profitability while ensuring stability and continued growth.
We might have been through the worst. Dynamics between traditional and new-age supply chain modules have shifted. We have, painfully, adapted. The impact of the pandemic and other political and economic disruptions has shown that previous models don’t react and adjust adequately to the changing market to produce or move the right products at the right time. But more resilient, flexible supply chain management can.
Navigating the Uncertainty of a New Year
A new (unpredictable) year is here, and the only viable way ahead for supply chain planners is through integrated, automated, and data-driven supply chain networks that enhance business agility and predictability. Here are some ways to make that happen:
1. End-to-end supply chain visibility and actionability.
Crises develop fast in today’s world, yet only 13% of the supply chain and risk management industry executives surveyed by KPMG in 2022 believed they had complete visibility into their supply chains. We need end-to-end visibility to enable better, more integrated planning and to access accurate revenue forecasts. All this means a more proactive approach to decision-making and more sustained, resilient profitability.
2. Accurate demand sensing and forecasting.
With data-driven supply chain software, businesses can accurately plan and forecast demand. When companies have end-to-end supply chain visibility, they acquire the power to sense demand for the near term, taking into account real-time fluctuations that cannot be factored into traditional demand forecasting models. This, in turn, informs intelligent inventory decisions that ensure availability of the right amount of product at the right place and time. No risk of overstocking or understocking means popular products don’t run out, and cash flow and margins remain healthy.
3. Collaborative planning.
One reason supply chains fail is that traditional operating models are built with siloes in mind. Departments and links of the chain are separate and have their own discrete goals and language. Instead, collaborative planning connects members of the logistics team across locations and functions. Collaborative supply chain planning can sync sales, supply chain, and operations teams toward unified business goals, leading to fewer misunderstandings.
4. Time to value.
A supply chain’s success is in its ability to transport and stock goods reliably, meeting demand as close to real time as possible. However, the bottom line of supply chain planning is that it can create a trusted relationship with customers and assure them that a purchase from the company is money well spent. Supply chain fluency equals maximum ROI in the least amount of time. This time saving can free your team to create value elsewhere, nudging your business to the next level.
The supply chain challenges we faced in 2022 might not have faded with the New Year’s fireworks, but things are looking up. If supply chain leaders can get access to integrated, automated, and data-driven supply chain tools and throw away the siloed, traditional models that no longer provide adequate visibility into the wilderness that is today’s environment, then the light at the end of the tunnel will start to show.
Anita Raj is the vice president of product marketing at ThroughPut Inc.