The global supply chain has been put through the wringer: a global pandemic, the Ukraine War, the blocking of the Suez Canal, and mass labour shortages. Will these issues with supply chains improve in 2023?
It looks unlikely that normal will resume anytime soon, so your business will have to adapt to minimise the impact of the potential risks facing supply chains:
- Continued labour shortages
- Sea freight bottlenecks
- Inflation
- The continued effect of COVID
Labour shortages and supply chains
Several factors have come together, resulting in labour shortages across every industry. Understaffed factories have led to reduced output. This is then compounded by a lack of HGV drivers. The result is supply and delivery delays and unhappy customers.
There is no immediate fix to this problem, but you can make a few changes to manage the risk for 2023. If your business has experienced staffing issues, it may be wise to re-evaluate our retention practices to create a balanced work environment. If the receipt of goods is more of a problem, planning for busy periods and keeping a closer eye on stock levels will help. Partnering with a fulfilment company means you can take advantage of their warehouse software systems to ensure optimum stock levels. Although it will mean more money tied up in stock, it will lead to better customer service.
Sea freight bottlenecks
Ships in the wrong place, labour shortages, and port shutdowns caused chaos this year. However, with labour shortages still being an issue, this situation may not improve soon.
Granted, there’s not much you can do to influence this issue. Therefore, proactive stock management will be vital to cope with the situation while the supply chain world gets back on its feet.
Inflation and supply chains
Inflation is here to stay for a while, which means it will have a massive impact on the supply chain. Being an interconnected operation, when prices rise in one area, it knocks on down the line. Energy, labour, and transport costs are all heading skywards, which will have a massive impact on supply chain costs in the coming months.
What can you do to mitigate this? Again, not a huge amount. All you can do is shop around and grow your supplier base to gain access to the best possible prices.
The continued effect of COVID on supply chains
It would be nice to think COVID is behind us, but it’s here to stay. Therefore, there is the possibility of a resurgence. With the current vaccination scheme in place, everyone’s fingers are crossed that we won’t end up back in a lockdown situation.
How can you negotiate supply chain issues in 2023?
Although much of 2023 will be spent recovering from the past couple of years’ turmoil, we must consider that there may be further issues to come that will impact supply chains.
The best way for businesses to be as ready as possible for whatever comes their way is to adopt efficient processes. Working with an experienced logistics provider who can deliver warehousing and fulfilment services is a step in the right direction.
Taking advantage of their advanced software systems, you will be able to monitor your stock effectively, ensuring you address any issues quickly to maintain the excellent levels of customer service that keep your clients coming back.
Right now, the financial and geopolitical landscape is in flux. Preparing as much as possible will give you the best chance of a stress-free 2023.
Smart Directions provide a bespoke logistics service, ensuring their clients always maintain excellent levels of customer service. Call the team on 01442 507 240 to find out more.