SUPPLY CHAIN
Key Challenges And Trends Expected In 2023
By Michael Nzule
The year 2022 is gone . 2023 has checked in , in earnest . The global supply chains still continue to face challenges after the other . Covid came and disrupted the landscape , forever . The Russia-Ukraine War is still there . We haven ’ t forgotten the disruption that the Suez Canal blockage brought in 2021 , with far reaching impacts . How have businesses responded to this ? And are they prepared well for 2023 , just in case the challenges persist ? What challenges do we expect to persist in 2023 ?
In Kenya , 2023 is the year when the new Government regime is expected to settle down . It will be remembered that there was a key policy change , dumbed returning the port operations to Mombasa , immediately the new government took over in 2022 . This was intended to give importers the right to have their cargo cleared in Mombasa ( as opposed to the forced railage to hinterland through the Standard Gauge Railway - the SGR ), and to choose the preferred mode of transport .
As we closed 2022 , the impact of this change was yet to be felt . Importers seemed to have been accustomed to the use of the SGR . Large importers may continue to use the SGR option , while mid-sized business may opt to have their cargo cleared in Mombasa through the container freight stations for ease of optimizing and managing the local transport component . The policy change gives the flexibility of choice , and last mile advantages that SGR may not offer . This may be one headache off .
Globally , unpredictable freight charges still remain a challenge that may persist in 2023 . The impact of the global lockdown measures implemented during Covid days drove the growth of e-commerce sales exponentially . The change in consumer behavior led to high costs for shipping cargo . This was complicated by the global shortage of shipping containers . However , in 2022 , we started experiencing a decrease in shipping costs - driven by contract logistics and spot-buying interventions . This can also be seen in light of global recession and not necessarily as sign of easing of shipping costs . 2023 therefore remains still unpredictable given decline in global trade and cargo movement .
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Lack of visibility and information on exact estimated time of arrival ( ETAs ) and unreliable transportation schedule across the supply chain process are practical issues that will impact performance of supply chains in 2023 . This has a direct impact on managing customer expectations and order fulfilment .
Data and supply chain analytics will continue to challenge companies . This includes ability to forecast supply chain trends , demand and having visibility of the chains . It cannot be lost that the core of effective supply chain management is forecasting demand based on observed trends . The data involved continues to be complicated and vast . Managers must therefore continue to equip themselves with capabilities and knowledge to wade through vast data and make informed decision from such . Accurate forecasts are critical to execute efficiencies in supply chains . This will persist and can only be managed through investments in software to support analytics to manage real time data to aid making decisions on real time basis .
Physical movement challenges are likely to persist in 2023 . These include port congestions , unreliable mode of transport ( e . g roads in Kenya ), and cargo clearance bottlenecks . Globally port efficiencies have been affected by lack of labor and containers to aid movement of cargo . Congestions are still there and they will persist in 2023 , though the scale is expected to be much lower . The issues contributing to port congestion can be eliminated easily . It is therefore necessary for businesses to have in place dependable freight management systems , that can provide real-time data on congestion status across the international ports . This will support scheduling of shipments to manage the congestion challenge .
Lead time management and supply chain visibility is expected to continue to challenge supply chain management . Lack of visibility and information on exact estimated time of arrival ( ETAs ) and unreliable transportation schedule across
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