Congestion may have eased in the final months of the year, but 2023 isn’t looking rosy for supply chain businesses. Forecasts point to continued disruption in the first six months of 2023. This could continue throughout the year in the worst-case scenario.
“We have a market of ongoing volatility, and there is a need not only to improve service and cost but also to stabilise it, and I think that’s where the majority of effort is going to be,” warned Abe Eshkenazi, CEO of the Association for Supply Chain Management.
Many of the problems behind the disruption are still in play. Some have simply been pushed to the back of the queue, ready to resurface again. Strategies to reduce port congestion have not addressed issues of warehouse space or transportation availability. Companies have been using increased inventory levels as a buffer, resulting in higher costs in an economy already beset by inflation.
We have a market of ongoing volatility, and there is a need to stabilise it
The answer lies in supply chain visibility and transparency, with the next step to align this access to relevant information with predictive and prescriptive analytics. “Along with big data and robotics, this will be the hallmark for a lot of organisations, which should lead to less volatility, or at least better predictability,” Mr Eshkenazi explained.
“Cybersecurity and data security are going to be a huge issue as we move forward to protect the digital supply chain,” he stressed. “But I think we also have to take a look at integrating the risk management with planning. I think this has become part of the supply chain professional’s role and responsibility: to integrate risk management with synchronised planning.”
While investment in technology is a vital step, companies need to remember to invest in their talent pool at the same time. “There are very few companies that are not investing in their technology platform. The question that we have for them is, are they investing in their talent pool at the same level as their technology?” Mr Eshkenazi said.
With the supply chain disruption set to continue in the near future, if not long term, planning and investment are crucial elements to success.