Predictions for 2023 supply chain trends to help with inventory management.

Before the COVID-19 pandemic struck in 2020, many business owners never gave a second thought to the complex web of manufacturers, governmental agencies, vendors, and shippers whose efforts combined to enable products to reach their stores. Times have changed. Never again will entrepreneurs be able to be successful without paying close attention to every facet of their supply chain. As we begin to move away from the worst of the effects of COVID on making and delivering merchandise, it makes sense to prognosticate some supply chain trends for the upcoming year and beyond.

Nearshoring and reshoring will become common practices.

One thing that we discovered in 2020 was that shipping merchandise and their component parts for great distances led to all manner of problems. At any time, a port or entire region might be closed down for health or political reasons. What’s more, climatic changes can bring about major delays and stoppages. For these reasons, it makes sense to reduce the distances between production and endpoints wherever possible. Although this cannot happen overnight, the trend is becoming apparent and looks to increase in the years to come.

Although it might be cheaper in some respects to make things in places like China and other Asian nations, facilities will gradually be moved to Europe, North America, and parts of Africa.

These initiatives are being implemented to limit the effects of inventory overages/shortages, higher wages, and so forth.

Data visibility and digitization will continue to increase.

Thanks to increasingly accurate and prevalent digital tracking, it will be easier for entities at all points in the supply chain to keep track of the progress of their products.

This will make delivery times more accurate and will also assist sellers in better inventory management and prediction.

As transparency increases, communication among all entities along the supply chain will be enhanced. Consequently, fluctuations in consumer demand can be addressed much more quickly, enabling the end users to get the products they are demanding in a timely fashion.

This emphasis on data will also apply to the firms that deal directly with supply chain management. Through the use of today’s highly efficient resource and project management tools and applications, businesses will gain a more accurate grasp of all their assets, projects, schedules, and deadlines — and can pass these details on to other links in the chain.

In an attempt to make supply chains more consistent and less prone to dangerous bottlenecks, governments are likely to enter the picture as well by requiring businesses to provide digital or electronic documents.

Improved returns management.

Whether it is at the endpoint where a customer sends back a product that is defective or unwanted, or a merchant returning an entire batch to the manufacturer for whatever reason, this process can be both costly and frustrating. At the customer end of the journey, merchants can minimize stress and confusion by using their smart terminals or point of sale systems to track products and returns securely while providing customers with paper and digital receipts. By the same token, suppliers can automate processes on a grand scale to make the returns process speedy, secure, and seamless. 

Another way that businesses can streamline the process is by working with multiple suppliers. By doing so, they can minimize the effects of a stoppage that impacts one manufacturer while leaving others untouched.

Instead of requiring that returns be sent back to their origin point, companies will begin to work with distributors that are more centrally located.

Increasingly, shippers will engage in the practice of zone skipping. This involves the shipper sending a large number of supplies to a central location that is geographically close to the endpoint companies that will be selling the merchandise. The large load of supplies is then divided up and distributed to all the customers in the area who need it, thus removing many logistical issues.

Separating shipments into smaller bundles at the “last mile” increases the overall efficiency of the process and is ultimately more cost-effective as well.

More agile supply chains.

There was a day when “just in time” shipping was the order of the day. It was deemed best to consolidate all processes toward just one or two origin points, only ordering products when they were needed. However, geopolitical conditions and recent health crises have underscored the importance of having multiple sources of products that can be tapped into and pivoted toward in case of unforeseen events. With this in mind, savvy businesses are working toward finding multiple sources for their products.

As technology evolves, so do the supply chain modeling tools that help to forecast fluctuations and make adjustments preemptively. Although these mechanisms can never be 100% effective, their predictions can help entities at all points on the delivery chain to make the most efficient and economical decisions that serve to get products and components to their destinations in a timely manner.

Extensive IoT adoption.

IoT, the internet of things, has been embraced by companies and consumers alike, from smart speakers in people’s homes to tools that enable firms to keep track of the progress of shipments as they traverse through the system from origin to endpoint.

For the past 15 years or so, radio frequency identification (RFID) applications have become the gold standard of logistics management for all components in the supply chain. This technology has been used to promote optimal traceability. RFID is now being replaced with blockchain technology. Formerly intended to secure financial transactions, blockchain is demonstrating two major advantages over RFID: maximized security, and data processing spread out over several terminals, eliminating the necessity for expensive servers. With this enhanced security will come greater protection against all manner of criminal activity, including fraud and counterfeiting.

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