ASCM Association of Supply Chain Management – Chicago, Illinois

Trends to Watch in 2023

Navigating supply chain logistics becomes paramount with COVID behind us

Supply chains continue to experience rapid change and constant evolution. Many organizations have responded by reforming the fine art of pivoting; Others seek solutions to help them better manage disruption and risk. Come 2023, the primary focus of the worldwide network will be to convert available data into useful knowledge.

The ASCM Research, Innovation, and Strategy Committee (RISC) has just announced its annual list of supply chain trends to watch. Each member of this committee spends months reviewing the literature, discussing potential topics and rigorously scoring each trend using a precise methodology. All trends are then linked to the seven primary processes of the benchmark SCOR Digital Standard (SCOR DS): orchestrate, plan, order, source, transform, fulfill and return.

In the final top 10, some of the trends have maintained power from 2022 onwards, but there are some major new themes that supply chain professionals should be aware of. These include advances in data analysis, a greater focus on resilience, and an emphasis on sustainable business practices.

The number one trend for 2023 is Big Data and Analytics, which most closely aligns with the planning stage of the SCOR DS benchmark. The topic of data analytics in supply chain continues to be considered as an important trend, as the rapid development of technology is a boon for data collection. Delivery services, inventory analysis, social media platforms, third-party cloud platforms, the Internet of Things, and business transactions are all providing business leaders with vast amounts of data; However, organizations still need to sort and analyze it, which is where advanced analytics and automation come in.

For example, supply chain analysts point out that advanced data analytics and artificial intelligence (AI) tools can predict a range of unexpected disruptions and improve demand forecasting. For example, there has been a lot of concern in the last few years for reasons including the shortage of semiconductors, the lack of manufacturers, and the cost of materials. According to a recent article published by CNBC, semiconductor distributor Rand Technology uses AI to connect customers with supply surpluses to potential buyers. It also uses advanced analytics to detect trends such as price increases or production change notices, and determine how much buffer stock a buying company wants to secure.

In addition, big data helps coordinate supply chain planning and execution, improves visibility for customers and gives them more power over what they buy and when – information critical to the supply chain. Finally, advances in predictive and prescriptive analytics, big data, algorithms, and robotics will all have a massive impact on organizations that seek to achieve a more agile, flexible supply chain.

Important in both the planning and sourcing phases of supply chain management, flexibility will continue to be a focus for the next year. According to the ASCM Supply Chain Dictionary, resilience is the ability to return to a state of equilibrium after experiencing an event that causes operating results to deviate from expectations. In addition, flexibility is improved by either strategically increasing the number of response options or reducing the time to execute those options.

Resilience has been at the top for a while: Businesses reacted to the disruption caused by the pandemic quickly by producing alternative goods, finding new vendors, or raising prices to keep up with rising costs and higher demand. With the effects of the pandemic still around the world, businesses are looking to shorten their supply chains even further to prevent disruption from political unrest, the climate crisis, or labor shortages.

Networks are reacting to ongoing change by focusing on onshoring or nearshoring: increasingly collaborating with local vendors, businesses discover the many benefits of manufacturing and producing their products closer to the end customer. And the certainty of getting goods in the shortest possible time and meeting customer demands far outweighs any inherent cost increases related to more transparent business practices.

For example, the Lego Group, the ubiquitous toy brick maker based in Denmark, is building a new factory in the United States with the goal of reducing the time frame for production. The company already has factories around the world, supplying nearby markets with toys at a rapid pace. Its proximity strategy proved its worth during the pandemic: profits doubled in the first half of 2021 when many people were in lockdown and others were staying home to stay safe and needed an activity to keep them busy Was. Although this plan has been in the works at Lego for years, the state of the supply chain today – including skyrocketing energy costs, greater risk and increased complexity – has led many organizations to consider nearshoring as a method of increasing resilience. forced to

Another technology, redundancy, is gaining momentum. Dirk Holbach, chief supply-chain officer for Henkel’s laundry and home care business unit, told McKinsey: “We manufacture a certain product technology in two locations so we have backups. If one location goes down, less At least I can manage supply for a couple of weeks. We can’t duplicate capacity to infinity, but it’s a very simple principle. If a major weather event or other crisis affects one facility, another Ready to start supplying goods to consumers, thereby limiting line delays.

Supply chain professionals have seen firsthand how redundancy, contiguity, and other ways to build resiliency can prevent supply chain disruptions, and they will continue to expand these processes into their networks in the year ahead.

The days of the traditional linear business model – “take, make and throw away” – are officially gone. Not only do these wasteful practices harm the environment, but they are also incredibly wasteful, costing businesses and consumers money. Circular business practices and models are growing in popularity and are more important than ever going forward.

Although recycling has been a consumer buzzword for decades, it is not the way forward. Over the past few years, China stopped accepting waste and recycling from Western countries, leaving the United States and other wealthy countries with nowhere to import their waste. A truly sustainable way for businesses to cut costs and environmental impacts is to reduce waste by innovating their design and production processes.

According to Ashley Morris, CEO of Corio in an interview with ASCM, “A circular economy is made up of three ideas: First, it designs waste and pollution out of our world. Second, it makes products and materials last as long as possible.” Till then holds on to their high value. And finally, it regenerates our natural systems.

For example, rare minerals needed for high-tech goods such as semiconductors, electric vehicles, fiber optic cables, and solar panels are becoming increasingly difficult to find – products that have grown in popularity as technology has advanced and the environment has changed. concerns have increased. But the excessive waste during the manufacturing process, especially of minerals such as neodymium, contributes to its rarity. By rethinking how organizations use minerals in production – high on the Make scale in the SCOR digital standard – companies can limit waste and pollution and keep more raw materials for additional products, increasing sustainability and can reduce costs.

These three trends are just a few of the big changes businesses are experiencing in their supply chains, and they will continue through 2023 and beyond. But perhaps most importantly: All change in the supply chain requires capable and competent people who can maximize opportunities, overcome challenges and ensure everyone is reaching their full potential. Contribute from As is always the case, supply chain talent is its most valuable resource. To learn more about how ASCM prepares industry professionals for everything that comes their way, as well as these and other trending topics, visit ASCM.org.