Recommendations: Take control of the Supply Chain in 2023

Madrid, December 23, 2022.- The KPMG Consultation has prepared an extensive analysis on the trends of the Supply Chain in 2023. Below, I publish a summary with the main keys that I have found most interesting for the management of any supply chain company transportation or logistics.

Disruption to supply chains is a permanent fixture, and at KPMG we believe these supply chain trends will be integral to getting control of what’s ahead in 2023. As we have seen, having sophisticated planning capabilities and agility, enabled by improved end-to-end visibility of your supply chain, will be both key to mitigating risks and areas of vulnerability, and harnessing opportunities otherwise difficult to convert to benefits. By proactively getting ahead of the these trends, you can have the capability to set yourself up for success.

In 2023, amid these disruptions, there will likely be some key supply chain trends to manage. Managing your organization’s response to these can be a critical opportunity in the year ahead. At KPMG, from within our Global Operations Centre of Excellence, we firmly believe that: nations will be skeptical about cross-border trade cooperation; cyber criminals will ramp up activity; there will be key material access turmoil; manufacturing footprints will change shape; retail and distribution supply chains are morphing rapidly; supply chain technology investments will accelerate; and on the ESG front, scope 3 emissions will be scrutinized – notably, by investors and regulators in addition to the environmentally conscious consumer.

To help set yourself up for success in dealing with these supply chain trends in 2023, there are three overarching things you should have in place. These are:

Capability: A mature supply chain planning capability to always be a step ahead and ready to tackle supply chain risks and opportunities

Agility: Making sure your supply chain is responsive and agile to manage the unexpected, and to deal with these threats and disruptions appropriately, efficiently and profitably

End-to-end forward-looking visibility: Having ‘control tower’ visibility on key real-time indicators; being able to maneuver your supply chain beyond your own business borders; and building real-time collaboration with your ecosystem of supply chain partners will likely be critical – all done using digital capabilities. The ultimate goal is to enhance collaboration across the supply chain eco-system.

With these three factors in place, you should be set up to turn the challenges of 2023 into a competitive advantage.

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.

In the year ahead, a second wave of unplanned supply chain risks will likely be realized. Organizations may experience limited access to critical inputs for manufacturing, or even spare parts and critical maintenance items. In an aligned challenge, key commodity prices and availability may fluctuate – whether that be fuel/diesel, construction items like timber, steel and resin, or plastic for packaging. Building resilient supply chains to combat future disruptions and adapt to new changes quickly will be key to help navigate these risks.

While accessing critical materials in 2023 may be challenging, so too will be manufacturing for many of the same reasons including the rapid rise in energy costs and price surge of key inputs. Therefore, global corporations with manufacturing operations will be re-evaluating their manufacturing footprint. Friendshoring and nearshoring will again be considered, however, there may be deeper thinking around whether manufacturing needs to be – and can be – done entirely onshore. This shift can’t happen overnight, but wheels will be put in motion.

Another factor in 2023 will likely be the increased impact of online retail on product manufacturing. Often, online platforms want to differentiate their offer, whether that be the size of products, minor ingredient changes, or even the style of packaging. This means organizations will seek out manufacturers that can provide more customization. Similarly, in life sciences, precision medicine will become more accepted by regulators, healthcare practitioners and patients. Therefore, rather than manufacturing millions of units for each vaccine/drug and moving these products across the globe, corporations may seek to manufacturer specific products per patient. This manufacturing change will significantly transform the future manufacturing footprint and how supply chains operate. As a result, a key question is whether organizations should establish new supply chains or simply divert production to other markets with existing capacity.

While getting goods into the hands of consumers in 2023 might appear easier than in earlier COVID-19 times, it will likely not be simple nor inexpensive. There may be more consumption mechanisms and channels than ever, and costs are not showing any signs of letting up, partially due to the close link to the complex manufacturing challenge, but also to the difficulty in getting goods into the hands of a more-demanding-than-ever consumer. The prevalence of last mile delivery challenges, coupled with reliance on suppliers that are often experiencing difficulties also, means global and local retailers may need to review their inventory distribution network and create a seamless experience around a unified commerce approach.

Over the past year, investing in a cloud-based digital transformation strategy was a key trend, and in 2023 this trend is likely to accelerate as organizations seize technology as a strategy to mitigate their growing concerns around inflationary pressures and economic stagnation. While technology transformation often focused on the back office and better customer engagement, supply chain and operational capabilities will be front and center in 2023. Importantly, there will likely be greater investment to uplift supply chain planning maturity, automation of warehouse and operational tasks, as well as in gathering better end-to-end supply chain analytics to create enhanced visibility.

Supporting this trend is a move from some major technology suppliers towards holistic supply chain platforms. Rather than offering supply chain capabilities as discrete add-on systems, they are bringing them all together in one platform, aiming to provide a seamless user experience.

Supply chain sustainability strategies have long been integral to achieving corporate ESG initiatives. In 2023, regulators and other important stakeholders (such as customers and the finance community) will likely demand a focus on scope 3 emissions control. You may be expected to make informed decisions to reduce these emissions, and ‘greenwashing’ will not pass scrutiny. Adding to the pressure will likely be a shift in investor activity towards organizations that can prove their scope 3 emissions are low. Global banking institutions, private equity and venture capitalists want to see that their portfolio is aligned to sustainable organizations.

Publicado por Pedro Vicente Director Proyectos Innovatrans

Pedro Vicente, Projects & Quality Director at Innovatrans Forwarding S.XXI. S.L

Deja una respuesta

Introduce tus datos o haz clic en un icono para iniciar sesión:

Logo de WordPress.com

Estás comentando usando tu cuenta de WordPress.com. Salir /  Cambiar )

Imagen de Twitter

Estás comentando usando tu cuenta de Twitter. Salir /  Cambiar )

Foto de Facebook

Estás comentando usando tu cuenta de Facebook. Salir /  Cambiar )

Conectando a %s

A %d blogueros les gusta esto: