Three key points for running a successful supply chain in 2023

The waters are beginning to calm in logistics and supply chain around the globe. Nevertheless, uncertainty and risks are still not out of sight for demand planners. In this regard, the Supply Chain Trends survey revealed key information that Directors, CEOs, Managers and Heads of Logistics, Operations, Finance, Purchasing, Planning and Procurement foresee for the future of the Supply Chain in 2023. 

First, the trends and challenges for 2023 were identified and then, together with the help of Slimstock experts, who, with more than 30 years in the Inventory Management and Forecasting industry, managed to identify 3 key points to address the main challenges for the Supply Chain: Optimize operational costs, negotiate strategically with suppliers, and implement an S&OE tool. 

Trends and challenges for 2023

The global supply chain is very susceptible to changes occurring both in the market and in the global context. Of the total number of respondents, 28% believe that the situation of the global economy will be a trend in the Supply Chain, while 22% believe that the implementation of technologies with Artificial Intelligence or Machine Learning will be a trend. 

The challenges, while different for each industry, have two themes that are similar across them. 24% believe that optimizing operational costs will be the main challenge for the supply chain this year and 23% of the responses indicate that the challenge is Sustainability. 

All companies know that they must take initiatives to bring about change in their Supply Chains. 22% of respondents reveal that achieving strategic collaboration with suppliers is the best thing to develop this 2023. However, there was a three-way tie for the next three initiatives with 20% of the responses: Fostering internal collaboration (S&OP); improving visibility in the supply chain; and creating processes to improve efficiency and quality in data management. 

Finally, the survey showed that the key tool to implement this 2023 is one which includes forecasting, demand planning and inventory management technology with 29% of the responses. Followed by technology to improve cross-functional collaboration processes (S&OP) with 21%. 

In conclusion, the main challenge is to reduce operational costs, the best initiative is to achieve a strategic collaboration with key suppliers and implement a forecasting, planning and inventory management tool, which will be the best option given the challenges for 2023.

Solutions for a successful supply chain

After being informed on the predicted main challenges on the supply chain in 2023, Slimstock experts will give you three possible solutions to help take your Supply Chain to the next level: Lower operational costs, negotiate strategically with suppliers and implement an S&OE tool.

Operational costs: The importance of assortment management in resource optimization

To optimize operational costs, it is key to define whether an item should be part of the assortment or not. For this purpose, there is a stock index matrix, which contains a series of criteria, such as margin, turnover, number of sales, supplier ranking, etc. Each of them has a score, which adds up to 100. Each of them has a score, which adds up to 100. According to that number, it is classified as active in the store, if it requires further analysis or should not be kept active in the store. 

If you require more information on this matrix, register for this event, on May 11, where each step to identify the item score will be explained in depth and in detail. 

Also, to decrease operational costs, an ABC/XYZ analysis can be performed to define the items that generate the best sales and their movements depending on the classification of each particular business. With this, the service level can be defined and inventory can be further optimized. 

Finally, it is key to define the optimal inventory level in order to define rules and establish a framework to optimize the balance between costs and service. In this sense, defining the appropriate service level often depends on the characteristics of each product and it is beneficial to set up a simple framework that can be adjusted over time. 

Relationship with suppliers: Improving collaboration based on good communication

Demand planning is key to have a good relationship with suppliers. It is key to make this information transparent to suppliers so that they can anticipate your orders. 

Determining what the demand is, choosing a sufficient database, cleaning the database, detecting a pattern, and enriching the forecast with human judgment can make a big difference in connecting you with suppliers. 

At this point, the economic order quantity must be calculated, which allows to increase the optimization of resources in the supply chain.  For this, you have to take into account three factors to calculate, the total cost of inventory, the cost of possession and the cost of ordering. With these three key values, you can calculate the EOQ. In this article, you can find the complete formula and how to calculate each factor. 

The delivery time is also an important point which can improve the relationship with suppliers, since calculating it allows transparency and enables new agreements. This deadline has a great impact on forecasting and safety stock, and is also directly related to inventory levels. 

Key Tools (S&OE): Forecasting, Demand Planning and Inventory Management

A forecasting, dispatch planning and inventory management tool improves the visibility of operations and acts as a unifying hub for operations. In this aspect, such a tool allows measurement through KPI's to improve the whole process. 

In addition, it facilitates the centralization of information and, therefore, decision-making can be made with a broader perspective. Not in all cases an S&OE tool is digital, but technology helps a lot to unify the whole process. 

An S&OE software allows you to maintain supply chain visibility, to manage stock, to plan the forecast, to optimize purchasing and to take your operation to the next level. Technology is an essential tool to optimize any process and inventory is no exception. 

New concepts to learn in 2023

The key points to lead a successful supply chain in 2023 give a lot to talk about. That's why this May 11, 2023 Slimstock has a webinar titled "Trends, Challenges and Solutions for a Successful Supply Chain", where all these topics will be touched upon in depth. To register, please visit the following link. 

Also, on June 15, Slimstock invites you to attend the Webinar "Keys to improve your demand forecast" where key points to keep in mind when calculating future demand will be presented in order to get the most out of your forecast. To register, please visit the following link. 

Finally, on July 13, a webinar will be held with the objective of presenting the key points that must be taken into account when organizing the areas of a company and how to use digital tools to obtain the best results in its S&OP process. This event is titled "How to achieve success in your S&OP process" and will be held on July 13. To register, please visit the following link.