Five Supply Chain Priorities for 2023 to Stay Competitive
From digitalization to automation, the war for talent and sustainability, supply chain leaders face a complex landscape. One in which we’re also still feeling the effects and aftershocks of the pandemic and Brexit, while new events such as the war in Ukraine cause further disruption. So, where should we focus? I believe the future of supply chains can be broken down into five key priorities.
1. Invest in Agility and Resilience
The days of prioritizing cost over resilience are gone. The COVID-19 crisis, Brexit and war in Ukraine all highlighted the need for supply chains to be resilient enough to absorb shocks and agile enough to respond quickly to unforeseen disruption. To put it simply, agility and resilience are essential for supply chains to survive and thrive in a volatile environment.
To be agile, supply chains must have the ability to quickly identify and respond to changes in the market and customer demand. This involves having the flexibility for example, to quickly reconfigure operations, switch suppliers or plan for disruption via a diversified sourcing strategy.
In order to be resilient, supply chains must be able to handle disruptions and unexpected events. This includes having the capability to quickly recover from disasters, manage resource shortages, and adjust to changing global trade agreements. It also requires having a clear understanding of the risks associated with suppliers and vendors, as well as having a plan in place to mitigate those risks. Having a flexible and resilient supply chain is essential in 2023 to remain competitive.
2. Fulfill environmental and social Commitments
Supply chains have a major role to play in the fulfilment of environmental and social commitments. Companies must invest to reduce their Co2 footprint and work towards Co2 neutrality. There are several ways to achieve it including:
- Investing in new technologies (e.g e fuels, assest replacement, real estate investments)
- Leveraging data to enhance visibility, efficiency
- Reviewing resource usage and our operating models.
Furthermore, customers are increasingly demanding that their suppliers demonstrate an ESG (Environmental, Social and Governance) focus, as they want to ensure they are only doing business with companies that are committed to making a positive impact.
3. Mitigate cyber risks
Cyber risks are one of the main challenges we as supply chain leaders face today. With the increasing reliance of businesses and consumers on digital solutions, the threat of cyber-attacks has never been greater.
We need to be proactive in mitigating the risks associated with cyber threats, such as data breaches, malicious software attacks, and cyber-espionage. As such, awareness of the latest trends in cyber security, a comprehensive and up-to-date security strategy and the insurance that all stakeholders are trained in cyber security best practices are key.
Additionally by having a business continuity management strategy in place, we can mitigate the risks associated with supply chain disruptions and ensure that operations are kept running to the highest degree possible.
4. Focus on the customer
Over the past decade, supply chains have undergone a major shift from a pure focus on operational excellence and cost to an additional focus on customer experience. This shift is designed to better meet customer needs and create a competitive advantage for companies.
In this customer centric landscape companies must be able to respond, plan, route, schedule and deliver according to ever increasing and changing customer demand. The transformation to customer centricity can be complex and time-consuming but the benefits – increased customer lifetime value and satisfaction while reducing churn – are worth it.
To truly become customer centric, supply chain managers need to think holistically about customer needs and understand their preferences. This shift requires supply chains to be agile, responsive, and able to quickly adapt to customer demands.
Additionally, supply chains must be more transparent, with tracking systems and visibility into the entire supply chain process to understand the impact of each decision on each customer’s service level.
5. Invest in talent
Supply chain talent attraction, retention and upskilling is an important part of the success of any business. As automation and data analytics become more prevalent, we must create opportunities for our employees to upskill.
At DHL we expect that 30% of tasks will be automated by 2030, and that we’ll use data analytics in a way that allows us to move from explaining the past to predicting the future. As a result, parts of the workforce will have to be re-deployed and retrained. The talent pool is also changing, with the arrival of Generation Z, Millennials moving into management and Baby Boomers retiring, companies must respond to a different set of demands from the workforce.
To ensure we attract and retain the best talent, we must provide a rewarding work environment, purposeful jobs, opportunities for career development as well as flexible work environments. We must also focus on hiring, training and development initiatives that will enable our employees to build the skills needed to stay competitive in the future and win the war for talent.
The Future of Supply Chains: 2023 Has Lots in Store for Us
One thing is key for supply chain leaders, we must be open to change in an industry which is rapidly transforming and prone to disruption. The five supply chain priorities discussed in this article should definitely be on every supply chain leader’s 2023 agenda. Along with a willingness to take risks, fail fast and learn and drive change. By pushing ourselves to go beyond our comfort zones, we can make a difference in 2023 and beyond.
What are your plans for 2023? Share your ideas here or on my LinkedIn page. I am looking forward to hearing your thoughts.
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Welcome to Sabinext. I’m Sabine Mueller, CEO of DHL Consulting. DHL Consulting is an independent strategic supply chain and management consultancy of Deutsche Post DHL Group. I have been dedicated to the logistics sector for close to two decades. This personal blog is a discussion platform for supply chain trends, diversity and future of work.