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Supply Chains Trends

Supply chain professionals have faced unprecedented challenges in recent years, but as organizations regroup and re-strategize, the future looks promising. Here, we explore some of the top trends in supply chain management from the previous year that will continue to shape the industry in 2023.

Supply Chain Trends and Manufact. Reshoring and Near-Sourcing of Electronics such as Diecasting, Plastic injection

Reshoring and Near-Sourcing Initiatives: In response to challenges like high freight costs, labor shortages, and geopolitical conflicts, organizations are rethinking their supply chain strategies. The shift from just-in-time to just-in-case is evident, with reshoring and nearshoring making a comeback. The Reshoring Initiative predicts a job boom, while Fortune suggests a potential "nearshoring jackpot for the Americas in 2023."

Product-as-a-Service (PaaS): The rise of PaaS, a business model combining physical products and services, is gaining momentum. Vendors offer subscription-based or pay-as-you-go models, providing tailored payment plans, cost savings, and on-demand support. PaaS not only benefits buyers but also promotes sustainable business practices by reducing material and energy usage.

Crowdsourced Delivery: The surge in e-commerce has led to a reevaluation of delivery systems, particularly in last-mile delivery. Crowdsourced delivery, utilizing local, non-professional couriers, is emerging as the future of same-day shipping. Retailers are experimenting with this model, with a global study indicating that 90% expect to use crowdsourced delivery for specific orders by 2028.

Improving Worker Conditions for Truckers: The U.S. faces a significant shortage of truck drivers, impacting supply chains. Efforts are being made to address this issue, with increased driver pay and a shift towards prioritizing safety over productivity. In 2023, companies are expected to implement referral bonuses and tenure pay to retain drivers.

High Supply Chain Costs: Supply chain disruptions, fueled by increases in fuel prices and global challenges, have impacted retailers' margins. Higher acquisition, transport, and storage costs have led to soaring commodity prices, with inflation expected to fluctuate in 2023. Retailers, including popular chains like Chipotle, are adjusting prices to cope with these challenges.

Smaller Warehouses: To tackle last-mile delivery challenges, the demand for smaller, centrally located warehouses is growing. Rental rates for smaller units have risen significantly, leading some retailers, such as Walmart, to convert existing retail spaces into fulfillment centers. The "Top 10 Largest warehouses in North America" is experiencing high demand, with projections indicating the need for an additional 400 million square feet by 2025.

Addressing Skills Gaps: The aftermath of the Great Resignation is still affecting supply chains, creating labor shortages and impacting recruitment. Supply chain leaders are focusing on attracting, recruiting, and retaining top talent in 2023. Reskilling and upskilling the existing workforce will also be crucial to address skills gaps.

Technology Investments: Supply chain leaders recognize technology as a competitive advantage, driving decision-making, efficiency, visibility, and disruption mitigation. The adoption of technologies like digital twins, autonomous things, sustainability tools, and analytics is set to grow in 2023, with 34% of leaders identifying technology adaptation as a critical strategic change for the next five years.


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