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April 26, 2023

2023 Supply Chain Outlook

2023 Supply Chain Outlook

NewPower Worldwide discusses trends for 2023 including decentralized supply chains, increased supplier collaboration, digital technologies and contingency plans.

The global supply chain is a complex, dynamic network comprising multiple nodes and players. OEMs need to remain agile and resilient to cope with future changes, while maintaining their competitive edge.

One challenge is rising demand for customization, where customers want tailored products matching their unique needs. Thus, OEMs must source materials, components and finished products from many suppliers, fragmenting their supply chain. Moreover, as production processes become more complex, they require more supplier coordination. This complexity can cause production and delivery delays, which can impact customer satisfaction.

Another challenge is ongoing global trade uncertainty. Shifting policies, regulatory changes and geopolitical tensions impact the global supply chain. OEMs must prepare to navigate these uncertainties and minimize the risk of disruption.

When selecting suppliers in 2023, OEMs will be looking for companies offering increased levels of collaboration and visibility, including the ability to track inventory while accessing real-time data across multiple supplier networks. Here is an outlook of 2023 sourcing trends.

First, OEMs are optimizing their supply chain by establishing a flexible and decentralized management system to work with local suppliers in each region of operation. This approach lets OEMs reduce lead times and shipping costs and comply with local regulations.

Second, OEMs are increasing their collaboration with suppliers to improve responsiveness and agility. By fostering closer relationships with their suppliers, OEMs can better understand their capabilities, develop contingency plans and jointly manage risks.

Third, OEMs are embracing digital technologies to manage their supply chain more effectively. Technologies such as AI, blockchain and the IoT can provide real-time data and visibility, improving decision-making across the supply chain.

Finally, OEMs are developing contingency plans to respond quickly to disruptions. These plans consider risk analysis, backup supplier identification and inventory/ logistics management. Having dynamic planning techniques allows for better responsiveness in the supply chain.

Ultimately, OEMs are working to transform their supply chain into a source of competitive advantage. They are investing in supply chain resilience and the technologies and partnerships that enable it.

 

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