For businesses dealing with the many challenges of the supply chain, digitalization is no longer optional but necessary to survive in an uncertain economy. This turbulence brings continued supply chain disruptions. 2023 will continue to be a competitive environment as businesses fight to maintain narrowing margins. Despite these difficulties, those that respond with agility and resilience will set themselves up for success and growth in the years that follow.
Increasing costs are among the many challenges affecting companies across the globe. Transportation now accounts for around 6-10% of total costs, which is a huge increase from the 2-4% standard of the past. Logistics disruptions, quality issues, evolving tracking regulations and production problems are adding to the list of challenges that leaders need to grapple with in the next 12 months. Executives should focus on achieving short term wins and organizing and using their data to create system agility.
Here is how to make a resilient supply chain that can withstand the storm:
Get on the cloud
Using the cloud has so many advantages for the supply chain that many businesses are already there using or are in the process of migrating. It is an extremely efficient solution and can also be very cost effective. When it comes to the practical applications of the cloud it really shines when it comes to making necessary system upgrades and allowing for quick turnaround thanks to cloud innovations.
If your business is seasonal, an interesting approach to explore is to use the cloud differently at different times of the year. In one case, a client ran at limited capacity for the 10 months of the year that were the slowest and then switched to full capacity for the busiest two months when it was necessary. The result of this efficiency move was a significant cost savings for the business in the ten slower months.
Standardizations are back
Custom solutions are still right for some businesses, but the vast majority will benefit from the collective knowledge of a standardized solution. For the past several years custom options have been falling out of favor due to the accidental creation of large and unmanageable systems that are next to impossible to upgrade. This has unfortunately become a barrier for agility when it’s greatly needed. Look for software solutions that cover around 75-80% of your functionality. Most solutions work with 425,000 global companies worldwide and have an excellent library of knowledge that can make standard options very efficient and cost effective. Standardized solutions can be especially helpful and efficient for small to medium sized enterprises and give them a financial advantage.
Organized data = money
Data is powerful but when it’s disorganized it can actually cost you money. Data needs to be collected, analyzed, stored and easily retrieved which all costs money. That’s why chief information officers should be keeping a close eye on this throughout 2023. Well organized data is incredibly valuable and can provide insights for future planning and guide a path to success through difficult periods.
Another thing to consider when managing data is the part it plays in artificial intelligence. With many businesses already using some version of artificial intelligence (AI), organized data has become an important component for it to function properly. In order for the AI to learn and self-optimize it needs to be fed a steady diet of quality data.
Leaders in the C-suite should consider the goals they have for the next three to five years and manage their data in a way that sets them up for future success.
Transparency is the key to resilience
Think of supply chain visibility as a way to navigate and make decisions in a difficult landscape. You will want to be able to see disruptions as they arise and look at the overview of available options and make decisions accordingly. Issues like market disruptions or a new customer request requires quick and informed decisions to stay efficient.
Opportunities for the agile leader
Leaders will have their work cut out for them in 2023, but those that focus on creating a system of agility and efficiency will be rewarded in the years to come. A good strategic plan includes investing in smart solutions, adopting new technologies like the cloud and standardized software and keeping data clean and optimized. 2024 and 2025 will be here before we know it and 2023 will have hopefully only made us stronger and more resilient.
