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Procurement challenges: Supply chain disruptions in 2023 

by | January 18, 2023

We continue our series of procurement challenges for 2023. As we mentioned in our first blog article, another challenge we are exploring refers to supply chain disruptions which are expected to continue this year as well and they are caused by existing or new geopolitical conflicts, inflationary pressures and the recessionary environment, climate change weather events, or other issues yet to emerge. They can all have an impact on goods access and how they flow to their final destination, cause port holdups, reduce container and ocean freight availability, and cause price increases, among other issues. 

There is a significant disruption in the direct materials supply chain, and modernising how it functions is a strategic priority. 

In the midst of these disruptions, there will most likely be some key supply chain trends to manage in 2023. Managing your organisation’s response to these can be a game-changer in the coming year. 

There are three overarching things you should have in place to help set yourself up for success in dealing with these supply chain trends in 2023. They are as follows: 

Capability: A mature supply chain planning capability that allows you to stay one step ahead of supply chain risks and opportunities. 

Agility: Ensuring that your supply chain is responsive and agile in order to manage the unexpected and respond appropriately, efficiently, and profitably to threats and disruptions. 

End-to-end forward-looking visibility: Having ‘control tower’ visibility on key real-time indicators; being able to manoeuvre your supply chain beyond your own business borders; and establishing real-time collaboration with your ecosystem of supply chain partners will almost certainly be critical – all done with digital capabilities. The end goal is to improve cooperation throughout the supply chain ecosystem. 

With these three elements in place, you should be able to turn 2023’s challenges into a competitive advantage. 

Nations sceptical about cooperation 

Due to geopolitical tensions, nations have turned inward and become sceptical of cooperation and interdependence. This caution is warranted when it comes to the supply chain, because if tensions rise, essential materials may become inaccessible, or major trade routes may be closed. As a result, governments and business leaders are investigating domestic self-sufficiency in material supply and manufacturing. 

In the meantime, they are attempting to establish ‘friend-shoring’ relationships – trade links with like-minded and, most likely, geographically close countries (‘nearshoring’) where goods supply will be more secure. 

Cybercriminals ramping up 

Cybercriminals will most likely be more sophisticated in 2023 when it comes to infiltrating supply chains to cause damage or steal from businesses. The supply chain can contain vulnerabilities that allow external parties to access your systems, particularly through your supplier network. Criminals could also gain access using basic warehouse equipment such as a barcode reader or Internet of Things (IoT) devices installed at your manufacturing and other operational sites  

Technology investment accelerating 

Investing in a cloud-based digital procurement transformation strategy has been a key trend over the last year, and this trend is likely to accelerate in 2023 as organisations seize technology as a strategy to mitigate their growing concerns about inflationary pressures and economic stagnation. While technology transformation is frequently focused on the back office and improving customer engagement, supply chain and procurement capabilities will take centre stage in 2023.  

Significantly, there will most likely be increased investment in improving supply chain planning maturity, automating warehouse and operational tasks, and gathering better end-to-end supply chain analytics to improve visibility.