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 . The Russia-Ukraine war has had impact on energy and food supplies . This disruption continues to impact production planning . Managers in the production lines must carefully manage suppliers for maintenance , repairs and operations ( MRO ), to assure plant availability and overall equipment efficiencies ( OEE ). The key still remains visibility to support effective decision making .
Warehouse management systems ( WMS ), will continue to play a key role in supply chains . The systems unlock challenges of visibility , traceability and cargo parameter information interchange between customers and warehouse service providers . The pressure to improve on the systems will continue . While logistics companies continue to invest in what is considered core operating assets to generate the required returns on investments ( ROI ), investments in new and smart technologies have been reported to drive even higher returns ( due to improved efficiency and matching customer needs ), which had been overlooked previously .
It has been observed that the most important driver of change in the logistics industry today is evolving customer expectations . Customers expect and demand that the logistics companies continue to offer a broader set of logistics services . This includes extending their service portfolios to include tailor made upstream and / or downstream solutions , or expanding their existing services across more geographies , industries , or modes of transport .
The pressure for ethical sourcing and adopting green goals across the supply chain actors will not reduce . It is expected to be the norm . Climate change challenges and managing carbon footprint in the entire supply chains remains a top priority , it is expected that sourcing decisions will be making these disclosures and compliance mandatory . The demand for independent ethical audits to provide the required independent assurance checks will continue to grow .
Globally , post Covid , there has been increased activity on the merger and acquisitions ( M & A ) fronts . Other related trends include consolidation and more integration to achieve more presence in all spheres of logistics - leading shipping lines have acquired and continued to show interest in air and land logistics - they have
“
The recent past experiences have forced adoption of new technologies and business models . However , having talented people and teams remains the single critical component in managing the emerging trends to deliver a great 2023 .
gone beyond sea freight . The interest and activity around acquisitions is still expected to continue in 2023 . These trends also bring about focus on people strategy in line with workforce optimization . The M & A activity , post Covid is mainly focused on increasing customer foot-prints and more service offerings .
Closely related to M & A activity is the adoption of outsourcing models . This would help in managing costs and bringing flexibility in serving customers . Given the volatility of the industry , it is only prudent to stay close to costs in the supply chain - to optimize the costs or drive out process wastes .
It is expected that companies in supply chain will continue to embrace remote-work options . Demand for supply chain industry talent continues to be high . The industry is expected to sustain improvements like better compensation , work benefits and workplace culture , to attract and retain talent . Remote work was one of the most important options during the pandemic , and might still be essential in luring a workforce that expects it as a norm . The pandemic forced companies to adopt remote working . This led to a new challenge . The workforce became very mobile , given that employees can change jobs without changing location . This has put more pressure to invest a lot in training and investments in remote working information technology resources . Offshoring is now a considered option .
During the pandemic , many times there was very high demand for carriers , in all modes of transport to move cargo loads . The carrier cycles were very abnormal and difficult to predict . Options for less-thancontainer loads brought more challenges , and consolidations were difficult to achieve given the uncertainty in the planned movements . Urgency in the moves dictated freight charges , but the critical challenge remained the availability and predictability of carriers . Carrier cycles are expected to normalize . This will bring flexibility on the choice of carriers as availability continues to improve . The shortage of carries led to mushrooming of new and inexperienced players . Shippers were forced to hire these given the limited options available . Carrier capacity is stabilizing , and so shippers can be selective on the right carrier for their respective cargo loads .
Lessons learnt and worth noting include the fact that the industry has become very volatile , cyclical and unpredictable . The volatility has a direct impact on volumes and profit margins . Companies therefore must find the right logistics partners ( vendors , suppliers , customers ) who can keep the business consistent , in unpredictable times .
As we get into 2023 , the fact is that uncertainty will prevail . This will disrupt the supply chains . The supply chain industries have always evolved . 2023 will be no different as the world stares at uncertain economy and the real threat of recession . The disruptions may take the form of existing or new geopolitical conflicts , inflationary pressures and the recessionary environment or even climate change events .
It should be noted that , nothing is shielding the supply chains from other issues that might emerge . However , the key objectives of good supply chains remain constant : resilience , efficiency , effectiveness , speed of execution and preservation of quality . The recent past experiences have forced adoption of new technologies and business models . However , having talented people and teams remains the single critical component in managing the emerging trends to deliver a great 2023 . Just be prepared for the unexpected in the year to stay ahead of the curve .
Michael Nzule is the Finance & Strategy Director of Mitchell Cotts Freight Kenya Limited . He holds an MBA in Accounting with specialization in Marketing , and a Bachelors of Commerce ( Accounting Option Hons ) from the University of Nairobi . He ’ s a member of ICPAK . Views expressed here-in are personal . You can commune with him via mail at : Mikemaithyanz @ gmail . com .