5 predictions for the supply chain in 2023

In 2022, lockdowns in China and the conflict between Russia and Ukraine were the main impacts on supply chains worldwide. To keep operations running and reduce the chances of shortages, companies had to rethink their strategies, adopting a more local and less global supply model.

Below, check out the main themes that should guide the decisions of CPOs in companies in 2023:

1. Resilience and risk management

Being able to anticipate, prepare and respond quickly and effectively to changes and interruptions in supply is one of the priorities for companies in 2023. Therefore, resilience becomes increasingly important in the supply chain.

To suffer fewer negative impacts on the supply chain, it is necessary to identify the main risks to the business, develop strategies and contingency plans, which can be crucial for companies to maintain the continuity of their operations.

Supplier diversification, risk management and investment in technologies to ensure business continuity and minimize any negative impact on supply chains will be some of the main strategies for companies going forward.

2. Digitization and automation of processes

The digitalization of purchasing processes is already a reality in many companies, but there are still organizations that are resistant. To survive in a competitive market, digital solutions for purchasing management have become indispensable in 2023.

This is because automation improves supply chain efficiency, reduces acquisition costs, decreases lead time, increases visibility of purchasing stages and brings transparency to transactions with partners.

By automating operational processes and having easy access to data and insights In real time, organizations can also better monitor supplier performance, reduce errors, comply with regulations and make better purchasing decisions.

3. Sustainability and ESG in the supply chain

The supply chain plays a fundamental role in corporate sustainability. Therefore, now and in the future, ESG initiatives – environment, social and governance – must guide companies’ decisions in supplier selection, choice of raw materials, transportation and routes, among other topics that help make businesses more sustainable.

Organizations that prioritize responsible sourcing will gain a competitive advantage and greater trust from their customers. Furthermore, as the transition to a circular economy becomes increasingly important, flows must be established to collect used packaging, products and parts, as well as to improve the returns process.

This year, meeting minimum sustainability requirements is no longer enough to have a positive impact on society. This is because stakeholders are increasingly interested and attentive to companies' engagement with social and transparency issues, that is, issues that go beyond the environmental point of view.

4. Artificial intelligence

In the supply chain, the use of artificial intelligence (AI), machine learning and IoT (internet of things) can help companies analyze large amounts of data and make more accurate predictions, optimize processes and improve efficiency.

Additionally, AI-powered supply chain operations can also help reduce human error and streamline decision-making. However, it’s important to note that AI is not a one-size-fits-all solution and needs to be implemented strategically for organizations to achieve the desired results.

Both AI and IoT will be increasingly used for predictive maintenance, route optimization, demand forecasting, inventory management, quality monitoring, data analysis, and process automation.

5. Data-driven decisions

2023 is the year of data driven in the supply chain. Investment in technology and tools to collect, analyze and manage data will grow and become a key part of the sector's strategic decisions. This also includes sharing insights with suppliers, thus increasing the chances of innovation.

A data culture can provide greater visibility across the entire supply chain, including inventory, suppliers, and production processes, which helps identify opportunities for improvement. With access to accurate data and relevant insights, procurement teams can make decisions based on evidence, not guesswork.

Data analysis can also help companies better understand the needs and expectations of their customers and, by understanding these insights, strengthen your presence in the market and increase your profits.

Did you like this content? Stay tuned for future posts on the ME blog!

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