Supply Management compiles the most critical supply chain and procurement trends for 2023.
1. Strengthening sustainability
Ivalua’s chief marketing officer, Alex Saric, emphasized the need to back up green statements with concrete action.
“The year 2023 is when talks on sustainability must become deeds,” he declared. Organizations may significantly contribute to the fight against climate change by developing more sustainable supply chains.
“The first step in putting words into action is to evaluate suppliers and increase visibility into tier one and sub-tier suppliers to ensure unsustainable practices do not evade detection. This is important for outlining an organization’s green future in 2023 and beyond and preventing organizations from being caught off-guard in the short and long term.
Failure to do so might result in firms alienating customers, becoming more skeptical of “greenwashing,” breaking the rules, and losing relevance in a society that values the environment.
FarEye’s Danny Hudson, head of the UK & Europe, continued, “Consumers are seeking more environmentally friendly solutions for their e-commerce delivery, and this trend will only grow in 2023.
Customers want to be able to choose their delivery and observe the effects of their deliveries.
Therefore, by 2023, businesses will make sure that customers have access to more environmentally friendly delivery options at the point of sale by making those effects transparent.
2. Reimbursing vendors promptly
In the previous 12 months, 36% of firms have extended payment terms for suppliers due to the impending recession and the inflationary climate. According to Stephen Carter, head of payments strategy at Ivalua, this fuels a “vicious cycle.”
According to him, paying suppliers late harms cash flow and liquidity, leading to future late payments and creating a vicious cycle for businesses and their supply chains. Companies will have a more vital need to pay suppliers promptly starting in the next year.
“Organizations need to utilize payment more strategically, not disrupt supply networks. For instance, they are employing finance, flexible next-day payments, and dynamic discounting. This enables businesses to negotiate lower product prices and encourages suppliers to meet delivery deadlines. The outcome will be stronger supplier ties and a more resilient supply chain, which will put organizations ahead of opportunistic rivals.
“This change will lessen the likelihood of a worldwide cash flow crisis, but it will also have long-term strategic benefits, such as making friends with essential suppliers, bringing down the cost of goods and services, and securing them during a period of low supply. Importantly, it will encourage desperately needed innovation through supplier cooperation.
The government reported earlier this month that over £23.4 billion in unpaid bills was due to UK firms. A review of the “exploitative practice” of late payments has been started.
3. Putting money into technology
Chief Revenue Officer of procurement platform provider Globality Keith Hausmann predicted that technology and automation would significantly influence all industries.
To increase productivity, interact more effectively with their business stakeholders, and do more with a smaller team, he predicted that businesses will need procurement technology solutions that are “more consumer-like, intuitively designed, and adaptable.”
According to Mark Holmes, senior consultant for global supply chain at software company Inter Systems, the visibility of an organization’s whole end-to-end supply chain will continue to grow until 2023. In addition to assisting organizations in achieving broader business objectives like ESG and sustainability targets, enhanced visibility enables them to anticipate better and respond to the difficulties presented by a volatile supply environment, such as supply disruption or excess demand.
4. The necessity to win the talent battle is greater
According to Sarah Patterson, CMO of Samsara, the anticipated economic situation will give cultivating corporate culture a new sense of importance.
She asserted that “great leaders would recognize that culture is one of the finest levers to pull for efficiency.” It enhances employee retention and engagement and draws talent to organizations. All of which can increase revenue and improve the clientele experience.
We all want to know how valuable we are; therefore, leaders who explain how a person’s job makes a difference and advances a more critical goal will have a more motivated staff. Those with a mission-driven culture and operating system will be better positioned to help their staff members through what may turn out to be another uncertain year.
Hausmann noted that relationship management and strategic problem-solving would be the top competencies for new hires.
Effective procurement teams would be able to use technology-derived insights, he said. “Chief procurement officers will have to compete for talent and knowledge in the industry. Many organizations will realize their skill pool in marketing or technology purchasing needs to be improved as the focus on indirect expenditure optimization grows.
“Procurement has played chiefly a transactional role in these domains for a long time, and knowledge has grown scarce. CPOs will realize that there need to be more highly qualified professionals working in indirect procurement to fill every opening at all significant corporations.