Five supply chain trends in 2023

How to deal with these challenges? Overwhelmingly, 62% of the respondents said that re-vamping the supply chain strategy is a high or very high priority, 56% are looking at recruitment to establish new capabilities, and roughly half of the respondents said that demand planning and forecasting, resilience and contingency plans and CO2 reductions continue to be of high priority in 2023.

Supply chain is a key capability
Looking ahead, what’s becoming increasingly clear is that supply chain resilience is evolving from an undervalued competence to a key capability of a high-performing supply network in the modern business landscape. Here is my suggestion for five trends that are likely to shape 2023 and beyond:

1. Supply chain as a key differentiator. Besides the conflicts that are changing the world around us, customer expectations are also continuing to change, causing the role of supply chains to change from a mere business enabler into a differentiator and revenue driver. Sustainability considerations is just one issue. Quality, which sometimes in the past used to be a technical product specification, is now of paramount importance under the pressure of social media. New delivery propositions, shifting demand and e-commerce cause consumers to expect immediate, accurate and flexible product delivery even in unstable circumstances. These developments have already fundamentally changed the position of the supply chain and will continue to do so, designating it a key differentiator in customer propositions.
2. Exponential growth in digital capabilities. In many ways, I think 2023 will be the year when technology finally lives up to its 10-year promise. It took a while – predictions 10 years ago did not seem to materialise at first – but current technology is able to support agile and resilient supply chain processes. Many technologies, from AI, machine learning and IoT to cloud computing and data availability, are maturing and offer more capabilities at lower cost than before. For instance, complex scenario planning used to be an issue, but systems like Kinaxis or SAP IBP now enable both exception management and near real-time scenario planning – something we will see a lot more of in 2023 and beyond with many companies embarking on ambitious digital journeys.
   
3. Purpose-led companies will strive for sustainable transformation. With the rise of generations Y and Z, and societal challenges such as climate change, the focus of many companies is shifting massively and irreversibly towards sustainability/ESG considerations. In the world of supply chain, this of course has a huge impact on decision-making. For instance, if planning models take CO2 emission reduction into consideration, this might imply sourcing materials in one’s own region based on true cost rather than materials from overseas based on lowest price, hence drastically shifting the planning objective for many organisations – something which we are already seeing in many of Deloitte’s current digital supply chain transformation projects.
   
4. A war for talent, like never before. Talent is already hard to find and attract. While technological capabilities and consumer expectations continue to advance, supply chain teams need people who are even harder to find, with skills that are fundamentally different from what was expected from planners up till now. These new hires are people who are able to think on a strategic and tactical level, in scenarios and risks, with analytical as well as communicative skills, and who are market-oriented. Also, talent needed for implementation of new technologies, is just as rare and usually already “sold out”, and many companies will have to come up with compelling offers to attract them.
   
5. Consumers have more and more choice. Did you competitor landscape change in 2022? If it did, it is also likely to change in 2023. The world is individualising, so consumers demand more diversity of products, more channels to choose from, as well as faster delivery times and transparency. They need to know if the product they have selected is the one they are looking for, whether it’s available, and if so in what quantity. And if not: what are the alternatives, what are the extra costs (if any), and when can they expect the delivery – not just on what date, but during which time-slot? This trend, which started in consumer business, is now dripping into other industries as well, and it continues to drive faster and faster decision-making from companies that want to keep up.
   

On top of all these changes, companies will continue to build more resilience and agility across the value chain throughout 2023, enhancing end to end visibility, using technology to create seamless integration of processes and information, and preparing for increased regulatory scrutiny when it comes to documentation of sustainable practices. There is a lot of work to be done, but luckily things are progressing as they always are.