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Continued Supply Chain Disorder in 2023

Continued Supply Chain Disorder in 2023

Feb. 7, 2023
A survey found 33% of supply chain execs cite shortages of critical parts or other goods is biggest concern.

Supply chain problems will continue to stay the same or possibly get worse according to 82% of supply chain leaders interviewed for a  new survey from Coupa Software.  

The survey results were comprised of 1,000 supply chain leaders across France, Germany, the United Kingdom, and the United States.

During 2022, more than 4 in 5 organizations experienced at least one significant supply chain disruption, and 50% experienced three or more. Supply chain leaders predict that food, gas, and computer chips are most at risk of impact in 2023.

Supply Chain Leaders Battle Increasing Costs

Supply chain leaders anticipate the largest disruptions will be increased costs (related to transportation, production, and raw materials) and geopolitical uncertainties.

When it comes to financial and operational concerns supply chain leaders are concerned about:

  • Continued shortages of critical parts or other goods (33%)
  • A lack of sufficient, reliable transportation/shipping capacity (28%)
  • Cost and logistical challenges of implementing new supply chain design, contingency planning, and/or technology solutions (28%)
  • Uncertainty in customer demand (27%)

"With climate change and geopolitical tensions expected to impact food and cause disruptions, now is the time for supply chain leaders to take initiative and be creative as to how they can invest and improve their operations," said Dr. Madhav Durbha, vice president of supply chain innovation at Coupa, in a statement. 

Make Suppliers Central to Win in 2023

When it comes to improving their companies' supply chain issues, 40% of all supply chain leaders surveyed indicated that building healthy supplier relationships ranks in their top two priorities.

Suppliers are central to a number of mitigation strategies companies are implementing or planning to implement over the next 6 to 12 months, including:

  • 31% are planning to strengthen relationships with their current suppliers and/or buyers
  • 28% are reducing dependency on suppliers from any one region
  • 28% are relying on suppliers that are geographically closer to production and distribution facilities

"As disruptions persist, it's critical for organizations to prioritize improving their relationships with suppliers," stated Durbha. "When supply gets constrained and capacities and materials go on allocation, suppliers tend to prioritize their preferred customers. Organizations are gaining this status as 'preferred customers' through collaborating with suppliers by providing visibility into their anticipated demand and ensuring payments happen on time."

Investments in Digital Supply Chain Solutions Grow

To prevent the disruption that occurred over the last few years, 79% of leaders surveyed indicated their company plans to invest in agility and resiliency for their supply chain in 2023.

Leaders see digital solutions as a key to ensuring product availability, improving customer experience, and reducing overall risk, but 79% of all decision-makers surveyed reported not having all of their functions digitized or not knowing if they are fully digitized. A majority (83%) are already investing in digitizing their supply chain or plan to in the next 12 months.

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