What are the Top 10 Trends in Supply Chain for 2023?
According to KPMG’s 2021 report “Vietnam Supply Chain at a Glance”, it was revealed that Vietnam’s supply chain has “critical gap areas” that have triggered challenges and potential risks to organisations. These gaps include “the lack of alignment between operating model and business directions, lack of end-to-end visibility, and silo mindsets across Plan, Source, Make, and Deliver stages of the supply chain.” Business leaders need to look into an agile supply chain that can quickly adapt to the ever-changing needs of customers based on real-time, data-driven insights for more accurate forecasting and efficient results.
Reports from KPMG, Stock Investor, and Finances Online have noted the following trends in supply chain management that will continue in 2023. For supply chain stakeholders, this can serve as your guide when planning strategies to navigate the challenges ahead.
1. Workforce issues
Labour market shortages have impacted supply chain operations for many industries even during this post-pandemic period. Compounding this is the introduction of new technological platforms to further speed up processes and quickly meet customers’ needs. As a result, this has created a skills gap that supply chain and manufacturing companies are struggling with. In order to sustain the business, organisations should look into building a workforce with a blend of physical and technological capabilities. They must also consider recruiting strategies targeting the Gen Z market as more and more are joining the workforce.
2. Disruptions due to global events
From fluctuating post-pandemic recovery efforts to the ongoing war in Ukraine (as of this writing), worldwide incidents such as these can have far-reaching logistic disruptions. Recently, Vietnam is experiencing the closure of some gas stations due to the lack of petroleum supply from local refineries, another negative impact from the chain of events that were set off by the Russia-Ukraine war.
Should this continue, government and industry leaders must provide resilient strategies to boost domestic capabilities. To quote the KPMG report, “Companies should look to re-design alternative supply chain flows, inventory storage capabilities closer to their customers, and determine how to best enhance last mile deliveries and returned goods.”
3. Proactive strategies to avoid production delays
If anything, the pandemic has forced the supply chain industry to evaluate production gaps that have resulted in empty shelves and long purchase lead times. Companies are advised to re-think strategies that may no longer be as successful as before, such as having excessive inventory purchased at the lowest cost to buffer erratic supply flows. In the current and future supply chain environment, managers are encouraged to prioritise risk management as part of their decision-making. Re-engineering specifications of products is another option that can lead to cost efficiencies in supply chains.
4. Expansion of third-party options
Whilst relying on a single major supplier, supply chain partner, or customer has resulted in building robust business relationships, it has become more of a hindrance to business growth in this post-pandemic environment. Organisations are now looking into expanding their supply chain options, particularly those with new capabilities in services and technology, to fulfil a growing list of logistics needs. More importantly, broadening supply chain suppliers, providers, and customers will provide cost efficient solutions with flexible and faster delivery of products and services.
5. Increase in technology investment
It’s no surprise that more organisations will be investing heavily on technology. Companies are working to improve essential supply chain capabilities by implementing more advanced technologies to automate certain processes and utilising data from AI-driven predictive analytics. This will further improve their ability to efficiently respond to disruptions in their local, regional, and international supply chains whilst maintaining cost control. Digitisation of supply chain information can also help resolve issues in transparency and improve end-to-end visibility.
6. Higher level of customization
Providing bespoke solutions in the supply chain industry will most likely increase as well. Companies can plan for specific strategies to meet the particular needs of each fragment. For example, automating the order processing system to separate regular orders from the customised ones. Streamlining this process will enable managers to focus more on improving other supply chain aspects.
7. Decreasing carrier rates
During the pandemic, carriers had to increase their rates to compensate for diminished capacity. In this post-pandemic period, capacity has increased once again and a rebalancing will be seen in 2023. Fees to cover issues such as overlength and over-dimensional freight will still remain for quite some time. Lower freight costs and improvements in customer service of carrier companies will most likely continue to give them a competitive edge.
8. More focus on sustainability
Government and industry regulations are becoming more stringent in implementing environmentally friendly practices in supply chain processes. Companies will be looking into sustainability strategies to ensure compliance and to meet consumer demands for greener solutions. Expect more sourcing efforts for sustainable raw materials and methods to decrease carbon emissions in production and transportation. Circular supply chains will also come into play where manufacturers will overhaul or recycle discarded items that can be re-sold to the market.
9. Standardised certification process
As supply chain management becomes more complex, courses focussing on different aspects in this field are being offered in universities. Supply chain certification programs are also being offered by professional organisations for specific fields like manufacturing or financial analysis. But there is no unified set of knowledge for supply chain management. In the next few years, there could very well be a standard certification process – similar to certified public accountants and engineers – that could help fill the skills gap in supply chain.
10. Cracking down on cyberthreats
Stock Investor reported that according to recent studies, there was a 300% increase in supply chain cyberattacks in 2021 versus the prior year. Sensitive information in supply chain can be used maliciously by hackers which can create catastrophic consequences to the business. As supply chain increases its presence in the digital sphere, cybersecurity has become a priority for businesses in this industry to protect the company’s interests and their customers as well.
Find highly skilled supply chain talent with an expert headhunting company in Vietnam
The Talent Consultants is a Vietnam-based recruitment agency with extensive experience in connecting multinational companies with the most qualified talent. We provide talent acquisition sourcing in Ho Chi Minh City for a wide variety of industries such as Supply Chain, IT, FMCG, and Manufacturing, among others.
If your company needs professional assistance in workforce management and talent acquisition services, give us a call on +84 28 7309 7991 or book your free consultation here. For job seekers who are looking for career opportunities in the supply chain industry, visit our job vacancies page or you can submit your CV here.