Supply Chain Predictions for 2023
CIO Review Europe | Tuesday, February 21, 2023
Supply chain conditions are expected to improve in 2023. Multiple executives in several industries say their companies will focus on risk, sustainability and optimisation.
FREMONT, CA: Since inflation is unlikely to abate soon, many businesses will prioritise supply chain optimisation this year to control rising freight and operating expenses. More companies will begin to use supply chain design solutions to answer complex questions such as: What is the revenue impact of charging for shipping and returns and/or shipping products more slowly? How much revenue is lost when switching from 2-day shipping to something more cost-effective, such as zone-skipping and 1-week shipping? Retailers will put these cost-cutting measures to the test to see how they affect customer purchases.
Risk management is becoming more critical as a result of geopolitical conflict. By 2023, there will be a shift towards near-shoring inventory in order to manage risks and be more resilient to future disruptions. This will necessitate a better understanding of demand, greater agility, and shorter replenishment lead times. Supply chains will shift away from single-sourcing, long-lead-time strategies.
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The supply chain flexes sustainability muscles. By 2050 achieving zero net emissions will be a significant challenge. And it is observed that supply chain priorities are beginning to place more emphasis on sustainability. Particularly given the increased pressure on corporations, users communicate to accelerate sustainability initiatives by 2023 as enhancing supply chain resilience and efficiency is good for the environment as well as business.
As stated in research, more than 90 per cent of an organisation’s greenhouse gas emissions and 50-70 per cent of operations expenses are ascribable to supply chains. Eight of ten supply chain executives are seen putting their efforts toward sustainable supply chain operations. According to a survey, 74 per cent of supply chain executives predict that using circular economy principles will enhance profitability between now and 2025. For an average of three years, supply chain businesses have been implementing circular economy ideas for over 16 per cent of their product range.
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