8 Top Trends in Supply Chains That Will Dominate 2023 – ThomasNet News

Welcome to Thomas Insights — every day, we publish the latest news and analysis to keep our readers up to date on what’s happening in industry. Sign up here to get the day’s top stories delivered straight to your inbox.

truck under and overpass

It’s no secret that supply chain professionals have navigated unprecedented disruptions in the past couple of years. While various challenges are ongoing, many organizations are usually now at a place where they can regroup plus re-strategize.  

Below, we’ve uncovered some of the top trends in source chain management from last year that will carry into 2023.  

1. Increase in Reshoring and Near-Sourcing Initiatives 

Factors ranging from high freight costs, labor shortages, plus factory shutdowns to component shortages, transportation delays, and geopolitical conflicts, have compelled many organizations to rethink their approach to supply chain management.  

As well as shifting supply string strategy from just-in-time (JIT) to just-in-case (JIC), nearshoring and reshoring are enjoying a resurgence.  

The Reshoring Initiative projected that reshoring would create 350, 000 jobs in 2022 , far exceeding the particular record of 260, 000 set in 2021. Fortune says 2023 could be “ a nearshoring jackpot for the Americas . ”

2 . The particular Continued Rise of Product-as-a-Service 

Product-as-a-service (PaaS) is an increasingly popular business model that sees vendors combine physical products and services to better fulfill their customers’ needs.

Equipment manufacturers, for example , may lease specialized machinery via a subscription-based or pay-as-you-go model. The buyer benefits through tailored payment plans, reduced costs, plus on-demand support, while the manufacturer gains access to the wider customer base and increased sales.  

Another positive associated with PaaS is that it drives sustainable business, since the use of materials plus energy is reduced.    

3. The Rise of Crowdsourced Delivery 

The rapid rise of e-commerce demands an overhaul of existing delivery systems, with retailers eager to fulfill their online orders as quickly and as cheaply while possible. Last-mile delivery is proving particularly challenging, thanks to high warehousing costs, inefficient routes, lack of visibility, and transportation delays.  

In 2022, retailers began experimenting with crowdsourced shipping, which leverages networks associated with local, non-professional couriers plus looks set to be the future regarding same-day shipping. Think of it like Uber, only for packages and not people. Couriers acquire their own transportation and ferry deliveries from a retailer’s store or warehouse to the customer’s front door.    

A global research study found that around 90% involving retailers expect to use crowdsourced shipping and delivery to handle specific orders by 2028.

4. Better Worker Conditions for Truckers 

As of October 2022, the particular U. S. was short almost 78, 000 truck drivers . If current trends continue, the driver shortage could exceed 160, 000 by 2031, contributing to significant supply chain delays.  

The shortfall can be attributed to a range of factors, including increased demand, a retiring workforce, in addition to fewer younger drivers entering the industry. In general, life as a truck driver will be tough going. The hours are long, the pay is low, and drivers often report mistreatment, loneliness, boredom, and even fatigue.    

The particular 2022 American Truck Associations’ Driver Compensation Study found that in 2021 more than 90% of truckload carriers increased driver pay. The National Transportation Institute indicates that this trend will continue. However , it says that instead of sign-on bonuses, in 2023, companies will likely implement referral bonuses together with tenure pay to better retain their drivers. As well, this says within 2023, safety will be incentivized over productivity,  

5. High Supply Chain Costs

In 2022, increases in fuel prices and additionally ongoing worldwide supply string disruptions have severely impacted retailers’ margins. Between January and June, for instance , typically the price connected with regular motor gasoline rose by 49% and the price of diesel fuel rose by 55%. Meanwhile, this ongoing war in Ukraine has seen a decline in food supplies not to mention transportation bottlenecks.

Because it’s more expensive, and takes a good deal longer, for merchants to acquire, transport, and store their goods, the prices with commodities are also soaring.  

Inside August 2022, grocery shop prices increased by 13. 5% through the year prior, which was the highest annual increase seen since March 1979. This is one of often the reasons restaurants are also raising their own menu prices . For instance, the popular chain Chipotle, increased costs by approximately 10% in 2021.  

In December, U. H. Treasury Secretary Janet Yellen forecast that in 2023 inflation will be “much lower. ” However, that came along with the caveat that this is barring “an unanticipated shock. ” Global firm KPMG predicts that inside 2023 “ key commodity rates and availability may fluctuate . ” 

6. Smaller Warehouses 

Another solution to last-mile distribution challenges is usually to establish smaller, centrally located warehouses, which explains why the need for these spaces has continued in order to grow inside 2022.  

Because smaller warehouses are both in-demand and also hard to be able to come by, recently, your rental rates for units less than 120, 000 square feet had risen twice as much compared for you to bigger warehouses.  

An additional option for retailers is to transform existing retail spaces into fulfillment centers. This is the tactic taken by Walmart, which is throughout the process of converting many of its 4, 700 stores to help mini-warehouses.  

Another important trend around warehousing is definitely that the exact vast majority for spaces are at capacity, with industrial warehouse vacancies sitting at around 1% (as about September 2021). Demand has gotten so high that will some tenants are opting to lease space before it is actually required. It’s projected that another 400 million square feet will be needed simply by the end of 2025 to meet demand at present growth prices.

7. Major Skills Gaps Remain 

Typically the impact in the Great Resignation, which saw 47. 8 mil Americans quit their jobs in 2021 , is still being felt across supply chains. We know that a shortage of laborers, including truckers, is driving up wages and, ultimately, consumer price ranges. But it is also impacting recruitment.

A 2022 PwC survey of more than 52, 500 workers found in 44 countries found that one in five people were likely to switch jobs in the next 12 months, as well as it’s projected that there will be a lot more than two million manufacturing roles left vacant by simply 2030.

With regard to supply cycle leaders, a focus on attracting, recruiting, and retaining top talent will be a key focus on 2023, like will reskilling and upskilling the existing workforce.  

8. Technology Investments 

Within a recent Gartner survey, 61% from supply sequence leaders said technology is a source of competitive advantage, helping to inform human decision-making, drive efficiencies, improve supply chain visibility, and mitigate disruptions. Meanwhile, 34% associated with supply chain leaders noted that adapting to innovative technology may be the most critical strategic change logistics businesses will certainly face during the following five years.

The top provide chain technology trends regarding 2022 included digital twins, autonomous things, sustainability tools, and analytics everywhere. Because companies become more comfortable utilizing these types of technologies, we will see them grow in 2023.  

Image Credit: IM_photo / Shutterstock. com

How Automation Is Being Used in the particular Farming Industry Next Story »

More from Supply Chain