More uncertainties in global supply chain management will continue until 2023, whether existing or new geopolitical conflicts, inflationary pressures and recession environment, climate change weather events or other problems that have not yet emerged. By 2023, there will be some key supply chain trends that need to be managed to seize the strategic opportunities in the crisis.

1. First we need to:

-Capability: mature supply chain planning capability, always one step ahead, ready to deal with supply chain risks and opportunities

-Agility: Ensure your supply chain is responsive and agile to manage contingencies and deal with these threats and disruptions in an appropriate, efficient and profitable manner

-End to end forward-looking visibility: "control tower" visibility on key real-time indicators; Be able to manipulate your supply chain outside your own business boundaries; Real time collaboration with your supply chain partner ecosystem is critical – all with digital capabilities. The ultimate goal is to strengthen the collaboration of the entire supply chain ecosystem.

With these three basic conditions, we have the opportunity to transform the challenges in 2023 into competitive advantages.

2. The following are the supply chain trends that need attention and the countermeasures:


Trend 1: Countries are skeptical of cooperation

Geopolitical tensions have made countries inward, and they are skeptical of cooperation and interdependence. When it comes to supply chains, this caution is reasonable. For example, when tensions escalate, basic materials may not be available, or major trade routes may be closed. Therefore, governments and industry leaders are exploring domestic self-sufficiency in material supply and manufacturing. In addition, they are seeking to establish a "friend support" relationship - to establish trade links with like-minded countries ("near shore") that are most likely to be geographically close, where the supply of goods may be more secure.

answer:

-Simulate scenarios to understand how geopolitical tensions will affect your supply chain.

-Consider how to use alliance outsourcing or offshore outsourcing to create a more secure supply network.

-Know what happens if you can't get critical materials or components. Do you need to reconfigure the product? What does this mean for regulatory and/or customer approval? Does purchasing from new suppliers or markets have cost implications? Recognize the impact of alliance outsourcing or offshore outsourcing on your delivery time and speed to market. Can you become more agile, more agile and reduce working capital?

Trend 2: rampant cyber crime

In 2023, cyber criminals may become more sophisticated when they infiltrate the supply chain to destroy or steal enterprises. The supply chain may provide loopholes to provide external parties with access to your system, especially through your supplier network. Criminals can also invade through basic warehouse equipment such as barcode readers or through Internet of Things (IoT) equipment applied to your manufacturing and other operating sites. If you reconsider your supplier network, change allies/nearshore, or invest in new technologies, network risks may increase.



answer:

-Recognize that your cybersecurity strategy often stops at the boundaries of your own business. Therefore, determine the strategies that you and your partners must develop to mitigate network risks in the supply chain. How can you help ensure that these strategies are robust and provide adequate risk management for your third-party contracts?

-Ensure that new third parties entering the supply chain ecosystem receive a comprehensive network risk assessment.

-Consider funding and implementing artificial intelligence (AI) or machine learning (ML) as part of the standard entry process for new suppliers to identify threats such as spam and phishing emails.

-Human error is a key network security risk. A recent report of the World Economic Forum emphasized that nearly 95% of successful cyber attacks are related to human factors/errors. Define policies to leverage technology and automation to help mitigate this risk.

-Use IoT devices (storing data, managing inventory, tracking goods) to conduct network assessment of all functions/activities in the supply chain, especially devices that directly access sensitive information and/or provide a gateway for wider system access.

Trend 3: Material acquisition in turbulence

The second wave of unplanned supply chain risks may occur in the next year. It may be difficult for the organization to obtain key manufacturing inputs, even spare parts and key maintenance items. In a consistent challenge, the prices and availability of key commodities may fluctuate - whether it is building projects such as fuel/diesel, wood, steel and resin, or plastic for packaging. Establishing an elastic supply chain to cope with future disruptions and quickly adapt to new changes will be the key to help deal with these risks.

answer:

-Protect your core products and reduce risk by eliminating the critical time spent managing low demand projects.

-To solve the redundancy problem in the supply chain, the method is to change from "timely" to "just in case", reserve additional inventory for key projects, maintain low productivity utilization, and cooperate with multiple suppliers. Don't just say that you will find alternative suppliers in the chaos, but have a clear plan for these suppliers, and what impact any change will have on your costs and operations.

-Use real-time data analysis to improve the accuracy of demand fluctuation forecasts/forecasts and stream these insights into your sales and operational execution framework.

-Use blockchain and other technologies to improve product transparency, prevent counterfeit products, reduce differences, and automate workflow through smart contracts.

-Two thirds of global business leaders emphasize that they need to improve the visibility of their supply chain to maintain future operational stability. Therefore, give priority to your supply chain flexibility and achieve real end-to-end visibility and transparency in the supply model of transportation, nodes and links.

Trend 4: Change of manufacturing footprint pattern

Although it may be challenging to obtain key materials in 2023, the manufacturing industry will also face challenges due to many similar reasons, including the rapid rise in energy costs and the soaring prices of key inputs. Therefore, global companies with manufacturing operations will reassess their manufacturing footprint. However, there may be more in-depth thinking about whether the manufacturing industry needs - or can - be carried out entirely on shore. This transformation cannot happen overnight, but the wheels will start to run. Another factor in 2023 may be the increased impact of online retail on product manufacturing. Usually, online platforms want to distinguish their products, whether it's the size of the product, minor changes in composition, or even packaging style. This means that the organization will look for manufacturers who can provide more customization. Similarly, in the field of life sciences, precision medicine will be increasingly accepted by regulators, medical practitioners and patients. Therefore, instead of manufacturing millions of units for each vaccine/drug and shipping these products around the world, enterprises may seek to produce specific products for each patient. This kind of manufacturing transformation will significantly change the future manufacturing footprint and the operation mode of the supply chain. Therefore, a key question is whether enterprises should establish a new supply chain or simply transfer production to other markets with existing capacity.

answer:

-Consider the future of your manufacturing location and how any changes will help improve the competitiveness of your products.

-How do you get resources from multiple suppliers/manufacturers in different countries to help protect your business from the uncertainty of key manufacturing markets?

-Explore the opportunity to sign contracts with global organizations to produce on your behalf, or if production should become part of your core DNA and be completed in China in the next few years.

-Understand whether mass manufacturing is suitable for your business in the future, or whether you need to consider customized manufacturing methods?

Trend 5: Retail and distribution supply chains are changing

Although it may be easier to deliver goods to consumers in 2023 than in the early days of COVID-19, it may not be simple or cheap. There may be more consumption mechanisms and channels than ever before, and there is no sign of cost decline, partly because of the close relationship with complex manufacturing challenges, but also because it is difficult to deliver goods to more demanding consumers than ever before. The prevalence of the last mile delivery challenge, coupled with reliance on suppliers who often encounter difficulties, means that global and local retailers may need to review their inventory distribution networks and create a seamless experience around a unified business approach.

answer:

-Consider the future of your distribution and micro fulfillment center location.

-Enhance and promote your e-commerce and omni channels, making them truly unified business processes and technologies.

-Review procurement and supplier strategies to reduce risks.

-Using AI and ML to achieve control tower visibility in a predictive environment.

Trend 6: Accelerated technology investment

In the past year, investing in cloud based digital transformation strategies has been a key trend, and this trend may accelerate in 2023, because organizations use technology as a strategy to alleviate growing concerns about inflationary pressures and economic stagnation. Although technology transformation is usually concentrated in the background and better customer participation, the supply chain and operation capability will become the core in 2023. Importantly, more investment may be made to improve the maturity of supply chain planning, the automation of warehouse and operation tasks, and the collection of better end-to-end supply chain analysis to improve visibility. This trend is supported by the transformation of some major technology suppliers to the overall supply chain platform. Instead of providing supply chain functions as an independent add-on system, they integrate them into a platform to provide a seamless user experience.

answer:

-Prioritize technology investments in supply chain planning capabilities and end-to-end visibility of real-time analytics, as these can help you maintain operational stability.

-Quickly track your data management strategies and capabilities, and enhance your team to make full use of technical capabilities to achieve insight oriented decisions.

-Consider how to invest in automation to replace redundant manual supply chain activities, improve productivity, and prevent profit squeeze and cost increases. There is an opportunity to simplify very manual activities such as global trade documentation, free trade agreement (FTA) compliance, trade tax calculations, reconciliations and settlements, and reporting.

Trend 7: Scope of review 3 Carbon emissions

For a long time, the supply chain sustainability strategy has been an indispensable part of the enterprise's ESG plan. In 2023, regulators and other important stakeholders (such as customers and the financial community) may require to focus on Scope 3 emission control. People may expect you to make wise decisions to reduce these emissions, and "green cleaning" will not pass the review. The pressure may be increased by investors' activities turning to organizations that can prove their scope 3 emissions are low. Global banking institutions, private equity and venture capitalists want to see their portfolios aligned with sustainable organizations.

Response: - Achieve your ESG strategy by aligning the goals of each function in the business, including finance, human resources, IT, operations, and business. Ensure internal collaboration and coordination with each function that accesses and tracks the same ESG data.

-Capture real-time operational data on the supply chain to measure and report ESG issues.

-Establish end-to-end visibility into your supply chain to see where your goods are going, the organization that delivers them, and their sustainability credentials. With this insight, you can make positive decisions about your partners to reduce your Scope 3 carbon emissions.




3. The supply chain in 2023 is most certain to have more uncertainties. These supply chain trends will be the key to controlling the future development in 2023. As we have seen, by improving the end-to-end visibility of the supply chain, having perfect planning capability and flexibility will be the key to reducing risks and vulnerabilities, as well as taking advantage of other opportunities that are difficult to translate into benefits. By taking the initiative to grasp these trends, we can be able to prepare ourselves for success again.