Now that 2022 is at an end, we can take a moment to reflect on the worldwide challenges and trends of our supply chains. Product shortages and risks have become (and remain) a focal point in supply chain conferences, government briefings, and even family conversations (did the topic of receiving a Xmas present later than expected come up while the turkey was being carved?). It is vital for the survival and development of businesses that we continue to discuss these issues, especially given the escalating uncertainty and rapid change due to the pandemic and other market issues.

So, what exactly did we learn about supply chains in 2022? Which trends permeated into our debates and impacted how supply chain operations evolved? Let’s go through the top four.

1. Sustainability

Sustainability remains a challenge post-2022. Climate change, circular economy, and ESG (environment, social, and governance) have all become business priorities through our global supply chains and the associated core challenges. This is true for contributing to the issues and for providing a focus on how to tackle the crises and difficulties.

A significant outcome from a recent survey done at The European Label Forum 2022 with supply chain decision-makers shows that several industries state that 88% have either designed a well-defined statement about sustainability or are writing one down. However, only 52% have put those words into action.

There must be more sustainable statements made around supply chain, followed by a commitment to invest in the skill to carry them out.

Less than half of those participants mentioned they have appropriate levels of visibility in their sourcing of sustainable goods, while only 21% had complete visibility.

As ESG initiatives are still a corporate priority, from 2022 onwards, enterprises will look to their supply chains for solutions and intensify the pressure they place on partners and suppliers to become more socially responsible.

2. Resiliency

Supply chain leaders forecasted persistent disruptions throughout 2022, with labor shortages, demand and supply imbalances, driver deficits, and international cargo pricing and limitations. Almost 50% of economists predicted that we could see any improvement at the beginning of 2023.

We now also understand that to enhance resiliency across worldwide supply chain businesses they must rebalance near-shore, on-shore, and off-shore strategies for manufacturing locations while identifying alternative sourcing strategies that diminish dependency on individual suppliers in low-cost zones.

Inventory optimization strategies were and still are crucial to support decision-makers in sourcing significant materials, goods, and intermediates. Establishing where and how much to invest in inventory across the supply chain remains critical. Companies now see an improvement in their collaboration and foster visibility with contract manufacturers, suppliers, logistics service providers, and other central trading partners as they attempt to replace inventory with information, reduce uncertainty, and increase visibility.

3. Visibility

Visibility, in a supply chain context, trumps sustainability and resiliency. How can we become more resilient to changes across the supply chain or meet sustainability goals if we require higher volumes of and more quality data to make timely and better-informed decisions?

In 2022, the focus was on improving visibility to collect, combine, and use data and forward-looking plans in a faster time cadence throughout the supply chain. In turn, the supply chain produces significant data as it designs, manufactures, and delivers more configurable goods in smaller targeted delivery windows.

Moving forward from 2022, Companies now look to see if customers require maintenance or services through the product’s life cycle. More intelligent planning, such as improved demand plans based on customer data and product usage, is being implemented to enhance analysis and insight. Sources such as environmental data, social media, and weather and traffic patterns all combine to drive improved, more customer-centric capabilities. By analyzing this data, associates can define how equipment, products, or vehicles are doing and quantify utilization and supply chain performance while having 360° visibility across the supply chain.

4. Technology

In short, we learned that technology provides data and tools too. Industry 4.0 has accelerated during 2022 as the use of Machine Learning (ML) and Artificial Intelligence (AI) increases and potential expands. These innovations consume significant amounts of IoT-based and social media data from individuals, devices, assets, goods, and vehicles across the supply chain to help automate processes and decisions.

Predictive analytics empower employees to make other up-to-date, real-time decisions and operate new business models. Factories, including 5G, bring better connectivity and boosted AI solutions to intelligent products and assets across the supply chain.

Industry 4.0 has a lot to offer companies that have invested in such technologies, bringing intelligent supply chain assets into the hands of both consumers and customers.

We learned that during 2022, technology has efficiently relieved worker shortages while increasing retention by enhancing decision-making and productivity and attracting new talent with modern tools. As automation increases, it releases personnel from repetitive duties and lets them focus on more complex obstacles and decisions that demand human collaboration.

2023 and beyond

So, what have we truly learned? Supply chains have undergone some of the most critical challenges and have been more in the spotlight than ever before over the last 20 or so months. This will continue well into 2023 – that we can be sure of.

Many of the topics explored above will remain critical to the continual refinement (and reinvention) of supply chains. We expect to see some of the same trends and a few more besides – something we will explore in greater detail very soon (be sure to keep an eye out for that!)

For now, though, let’s sign off with this question. The views and strategies we have just explored are valuable takeaways from 2023 onwards. Are you considering them a challenge to successfully implement in your company?