Supply chains have become increasingly complex over the past several years. While the COVID-19 pandemic reveals weaknesses in the global supply chain, disruptions are expected to remain prevalent throughout 2023. From rising inflation to wartime overseas, supply chain managers are facing difficulties with their operations each month.
But even amidst uncertainties in the market, innovations are popping up in the supply chain management field that will combat the current challenges and protect against future ones. To help set yourself up for success in the coming year, here are some of the top supply chain management trends for 2023 and beyond.
1. Artificial Intelligence (AI)
The use of artificial intelligence (AI) is on the rise throughout the supply chain. AI’s goal is to imitate human intelligence and “learn” to assist with more challenging and complex tasks. So, how does AI help in this industry? The possibilities are almost endless.
AI can help make improvements in your picking and packing processes by figuring out the most efficient solutions. It can also tell you the best warehouse layout, so you are making optimal use of your space.
2. Automation Solutions
While automation isn’t necessarily intelligent, it does address an ongoing supply chain challenge — labor shortages. Automation can supplement or replace human workers to accomplish things like product production, inventory control, picking, packing, and more. Many businesses assume that automation solutions will be costly because they picture using robots. But there are plenty of solutions that don’t involve full automation. These also have a high return on investment.
3. The Internet of Things
The Internet of Things (IoT) is a way to wirelessly connect physical objects to the internet so that you can access them from anywhere. When it comes to logistics, IoT plays a vital role in the supply chain and is likely to grow in importance in the coming years. In fact, research predicts that there will be over 25.4 billion connected devices by 2030.
There are numerous examples of IoT use in the supply chain. Sensors are used for inventory control, fleet tracking, warehouse management, and equipment maintenance. IoT is also used to create smart warehouses and improve automation.
4. Focus on Sustainability
An increasing number of consumers have prioritized sustainability as something they value in the brands they support. The good news is that there are many different ways for your business to address and improve sustainability. You can focus on recycling, build an eco-friendly warehouse, or commit to using sustainable products and business partners.
5. Digitization
Too many supply chain businesses have continued to run their operations using paper or antiquated systems. Experts believe that digitization, which is the process of putting information in digital format, will improve productivity and efficiency in the supply chain.
If you haven’t gone digital yet, the transition can be a challenge. But the results of “going paperless” are worth it in terms of streamlining processes.
6. Increased Visibility
Few things have harmed the supply chain more in the past few years than a lack of transparency. When one supply chain partner doesn’t know what’s happening with another, or customers are left in the dark, it makes disruptions even worse.
There’s a growing trend toward improving visibility by leveraging various technology solutions. RFID tags are an excellent tool for tracking inventory and other assets. When combined with shared systems, supply chain partners can improve visibility and efficiency.
7. Customization
Traditionally, everything that came out of a factory or warehouse was mass produced. But customer demands have shifted the focus somewhat to more customization. For example, CNC machining makes it easier to personalize orders at a lower cost. This will become a more realistic option for many businesses going forward as they improve other aspects of the supply chain.
8. Circular Supply Chain
Supply chains have traditionally been viewed as linear. In other words, there is a process of raw materials that get converted to finished products, which eventually get used and disposed of. Now, more people and businesses are investigating the idea of a circular supply chain, where raw materials and discarded products are recycled and reused. This saves money and also reduces waste.
9. Cloud-Based Solutions
Cloud-based solutions are another growing trend in supply chain management. Various Software-as-a-Service (SaaS) solutions are available to help businesses manage operations, such as warehouse management systems (WMS). When these are run in the cloud, anyone connected to the system can get access to the data in real time.
10. Collaboration Between Online Retailers
As online retailers attempt to mitigate last-mile challenges and other supply chain disruptions, there is a growing trend of collaboration, even among competitors. This is a strategic approach among retailers of every size to ensure survival and growth. Some of the ways these businesses are collaborating include for:
- Shared carts
- Cross-channel returns
- In-store pick-up
- Cross-channel loyalty points
As just one example, you can now pick up and return Amazon purchases at select Best Buy, Kohls, and Sears stores.
11. Diversification of Delivery Partners
Even in the face of ongoing challenges, eCommerce growth remains impressive. One projection has eCommerce sales accounting for 40% of all retail chain sales by 2026. But fast and on-time delivery are continuing challenges in this industry.
Many retailers are diversifying their delivery partners to improve results. Using multiple fleets allows companies improved flexibility in peak season or when other disruptions arise.
12. Risk Management
As the world becomes more unpredictable, supply chain partners need to find ways to identify and mitigate risks. Fortunately, there is more data than ever available to achieve this goal. Using the data you have at your fingertips, you access valuable insights to identify areas that require addressing and strategies to quickly pivot to minimize the impact of supply chain disruptions.
Supply chains are the foundation of most modern businesses. Keeping all supply chain components running as smoothly as possible ensures that your business will continue operating as smoothly as possible with the fewest disruptions. These latest supply chain management trends help businesses in this space adapt to continued changes and challenges.
