Supply chains are central to an organization’s business strategy. Highly successful supply chains are the ones that are responsive and, therefore, inherently resilient. Much of this transformation has been accelerated by the massive disruptions of the past two years. And as we move into 2023, we find that businesses are leaning toward supply chain solutions that prioritize resilience, higher levels of automation, data transparency, and faster fulfillment.
What will shape supply chains in 2023
Tech expansion will see more partnership engagement:
Among enterprise tech leaders, there exists a tendency to view their business problems as unique. And often, this translates to a higher proportion of bespoke development of solutions. However, while this approach may seem like it gives stakeholders a higher degree of control over a solution, that sentiment is often counterintuitive.
Partnering with a vendor or acquiring a platform subscription, for example, can often be faster and more cost-effective than building it in-house. As more subscription-based solutions come online, mitigating the twin risks of upfront capital expenditure and low adoption, executives will find themselves leaning toward the tail end of the Build-Buy-Partner equation.
Ecosystem thinking will fill supply chain gapsÂ
Around the world, supply chains remain broken, primarily compounded by silos created by ERP. Any effort to optimize generally results in shifting of costs than a complete takeout.
However, supply chain leaders recognise the need for end-to-end digitalization and higher data transparency to identify and shore up weak links in supply ecosystems. In fact, according to Gartner, over 38% of organizations are investing in supply chain tech that supports end-to-end business processes.
Digital twin technology for supply chains is also likely to shine in 2023, as executives understand the importance of interoperable data models to establish a single source of truth in a multi-stakeholder environment. Making sure all value network participants are reading from the same page also means fewer issues with data latency, more accessible analytics, and in the long term, improved stakeholder profitability.
Digital industrial platforms will become ubiquitous
The explosion of technology providers and the near ubiquitousness of digital means that everything from point solutions to end-to-end transformations is increasingly commoditised. Add a traditionally low-risk appetite among supply chain executives and a high-intensity talent war for technologists, and we estimate that digital industrial platform adoption will skyrocket. This shift is also due to a refocusing on core competencies and strategic differentiators.
Stakeholders will continue to experiment with AI
Although automation has emerged as the most disruptive technology of the decade, AI is becoming essential to enterprise decisions. However, we expect that supply chain leaders will still be experimenting with higher-order AI tools, especially predictive analytics, for demand planning. Given the vast number of data points available to modern enterprises, the interpretability of predictions will take center stage.
Specifically, the ability to sequester predictions and build models replicating those predictive functions with changing input values will be increasingly important, especially as executives further embrace data-driven decisions. Â
Forecasting will move beyond the obvious
A combination of inflationary trends, rising fulfillment costs, and fragmented demand will make forecasting more challenging. If an enterprise can accurately isolate a trend before it becomes mainstream, it’ll be better positioned to drive innovation in the right direction. Market leaders will likely prioritize technology solutions that peek past the obvious and use a combination of ML/AI and alternative data analysis to predict trends that no one else sees coming. In fact, by 2025, experts estimate that 25% of supply chain decisions will be made using intelligent edge ecosystems.
While much of the disruption in supply chain operations was driven by the pandemic, new models are here to stay. Businesses embracing the above-mentioned trends in the coming year will find themselves ahead in creating resilient, flexible, and automated supply chain value networks