5 Supply Chain Strategies to Come out of 2023 on top

It may be hard to imagine, but 2023 may just be the hardest year yet for supply chains.

It’s been three years since a pandemic launched the world into a , taking supply chains with it. In fact, nearly all supply chains experienced some level of disruption.

Through natural disasters, bottlenecks, new tariffs, global trade issues, labor shortages, war, and other geopolitical factors, supply chains have certainly been stress tested, shining a light on the need for much better resiliency strategies and agility when unforeseen events inevitably arise, shifting availability and raising prices.

Many underprepared supply chains pivoted into a reactive state to handle all that was thrown at them. Lessons learned led to new initiatives. Companies began understanding what was needed to become proactive and evade future risks.

But, did we do it? Did we do enough to make sure new threats to supply chains become something we hear about on the news happening to others?

The year ahead predicts continued inflation, rising interest rates, impending threats of a global recession, and many undiscovered risks that will all factor into the supply chain dynamics.

Here are five things you can start now to avoid common missteps and come out of 2023 on top.

Focus on People

Labor shortages are still an issue. Investing in employees’ well-being and job satisfaction allow companies to mitigate costs and time spent on the hiring process and training new employees, as well as the potential increased wages. It ultimately costs more to replace an employee than to keep one. The same can be said for onboarding new suppliers.

Performance reviews and supplier scorecards push companies to take the time to assess employees and suppliers and work together to improve performance, or take what has been successful and implement it elsewhere.

Paying attention to customer experience and feedback maintains loyalty and increases the potential for future sales. We sometimes need to catch up on who our customers are and target their real addressable needs. They become a company name on a computer screen or a generalized persona. Still it is essential to remember that behind every “customer” is a real person with real concerns and ideas. Odds are, if one customer needs something, others will too. Having a pulse on those could provide a competitive advantage and increased profits.

Implement ESG Initiatives

If your company hasn’t given much thought into ESG (Environmental, Social, and Governance) initiatives or brushed them off as a fad, it may be time to take another look.

Environmental and social activist campaigns have surged over the past five years, with projected sales of sustainable products still on the rise¹. Companies with strategic directives around sustainability continually outperform those lacking leadership in these areas in the medium and long term.² According to The Guardian, in the last decade, S&P 500 corporations with ESG goals around climate change have shown 18% higher ROIs than those that don’t, and 67% higher than companies who refuse to disclose their emissions.³

Inevitable regulations around environmental sustainability goals will have an impact across industries. Putting initiatives in place now reduces future disruption and provides a competitive advantage.⁴Furthermore, reducing waste helps combat rising raw material costs and shortages, a preemptive maneuver worth making.

Adopt IoT Technology

Transparency with digital twins and integrations across platforms is still a hot topic. Technology is infusing itself throughout supply chains in a much-needed way, and those who don’t embrace it may quickly be left behind.

With the rise of IoT devices, connecting every “thing” to the internet is now possible, and industries are leaning toward the potential.

A recent GEODIS study found that 62% of companies report having limited supply chain visibility, while only 39% aim to prioritize IoT technology. To combat this, several industries have issued mandates around the use of IoT devices, namely RFID, to collect and transmit item-level data for better traceability. As a result, suppliers and retailers alike can benefit from production visibility, inventory management, and supply chain insights, making sure the correct items are where they need to be when they are needed.

Sensor technology like RFID, GPS, BLE, and UWB can provide data on product location, speed, arrival times, and even atmospheric conditions, warding off delays and disruptions, and preserving quality.

Embrace Data and Analytics

If you can’t see it, you can’t measure it. And, if you can’t measure it, you can’t manage it.

While supply chain visibility remains a top priority for many companies, several supply chain processes are still carried out manually. These methods are far from reliable, nor is the information displayed in real time.

As mentioned previously, the adoption of IoT technology provides a vehicle for more accurate data capture and analysis. GEODIS found that 41% of industry professionals ranked data analysis software as a priority, while another 29% further prioritized predictive analytics.

A McKinsey survey of global supply chain leaders stated, “resilient supply chain planning is built on three interdependent pillars: visibility, scenarios and master data.” The survey discovered that supply chain leaders who increased E2E visibility were 2x as likely to report having no challenges from 2022 supply chain impacts. Additionally, the survey concluded that only 53% of supply chain leaders have sufficient master-data quality. Those that did, reported being 1.5x more likely than peers to have no supply chain impacts from recent years.⁵

By funneling the data gathered by IoT devices into “control towers,” supply chains can be seen from end-to-end. In addition, when hosted on the cloud, supply chain managers can access analytics and alerts in real-time wherever they may be.

Visibility into supplier performance and how it may impact extended supply networks unlock a deeper level of transparency, providing decision-makers with insights that enable them to evade problems before they arise, minimizing downtime.

Companies investing in predictive and prescriptive analytics are more agile and confident, have well-informed decisions, and ultimately accelerate profitability.

Adapt Processes for Automation

Embracing automation really comes down to prioritizing labor more efficiently. Augmenting human efforts by speeding up simple, repetitive tasks, or relegating these tasks to machines, allows managers to focus manpower on higher-value tasks that directly effect business growth and customer experience.

Within seconds of autonomous capture, data (free from human error) is sent through the cloud and algorithms go to work sifting quickly through mountains of data, identifying patterns and learning based on previous experiences to better predict future outcomes. Armed with more powerful insights, simple decisions that fall within specified parameters can be made automatically, keeping production lines moving.

Robotics, Artificial Intelligence, and Machine Learning integrate people, processes, and systems to make supply chains more resilient to disruptions while increasing productivity. In fact, artificial intelligence in supply chains is projected to surpass USD 20 billion by 2028, and robotics has become a focus for 22% of supply chains.⁶

Labor shortages and demand surges are cause enough for some companies to wade into automated solutions. The increased demand throughout nearly every facet of the supply chain has driven rapid technological advancements and greater affordability. After the initial capital investment, the promised ROI more than makes up for it.

These five supply chain strategies arm companies with optimized operations, cost savings, improved forecasting and demand planning, and swift, strategic decision-making. Whatever challenges this year may bring, a resilient and agile supply chain is imperative to withstand them and stay competitive.

RTI provides customers with in-depth visibility, analytics, and insights across even the most complex supply chains by deploying its award winning eP360™ SaaS visibility platform. While employees are performing everyday functions, eP360 sensors are collecting and analyzing data in real time, pinpointing problem areas, predicting, and alerting customers of potential problems before they happen. RTI is easy to work with and able to deliver accurate, item-level traceability by leveraging a wide variety of sensor-based technologies to help companies comply with government mandates and OEM requirements. In addition, RTI works with its customers to outline targeted ROIs driven through supply chain visibility and then, with eP360’s rapid deployment, helps its customers monitor and achieve those savings quicker.

For more information on how RTI can help implement any or all of the above strategies, visit here or contact us to speak to one of our team members.