Global economic uncertainty, climate commitments and digital transformation were three topics that headlined at the World Economic Forum in Davos recently. As global trade continues to slow, the Ukraine conflict and its far-reaching economic, people and political consequences have replaced the pandemic as the primary drag on western, globalised economies.
As rising trade tensions and economic nationalism continue to influence world trade relationships, countries and organisations are adjusting to these changing geopolitical and economic dynamics.
And, while it’s still too early in the year to determine whether the global economy will thrive or decline in 2023, one thing is clear: to circumnavigate the challenges ahead, it will require strategies and processes that are based on resilience and agility as businesses reassess their traditional approaches to business models and playbooks.
As organisations continue to diversify their trading and manufacturing relationships to reduce global investment risks, building resilience and agility into supply chains will become a significant priority once more.
Recent trade patterns provide clear evidence that many organisations across a variety of verticals are prioritising supply chain resilience, diversification and agility, particularly due to inflationary pressure and the cost of living crisis.
Below are five key areas all retail and supply chain directors need to address if they are to insulate their brands against the chill of economic uncertainty in 2023:
- Increase resilience by investing in technologies that provide complete and real-time visibility of inventory across all digital and physical sites – if you’ve got it, you should be able to sell it
- Fund R&D initiatives to identify alternative approaches and drive innovation. When others are battening down the hatches, it’s often the best time to double-down on innovation and investment, enabling you to steal a march on your competitors when fairer winds return and consumer expectations have changed
- Use modern tech, such as cloud-native, unified supply chain platforms or digital-twins to leverage the ‘force-multiplier’ effect across your inbound and outbound flows. These types of technologies (independently or collectively) can improve the early visibility of developing shocks and disruptions to deliver alternative scenarios, contingency plans and drive overall supply chain resilience
- Accelerate efforts to incorporate scenario planning into capital allocation and supply chain management processes. Coupled with the right technology, scenario planning can improve long-term supply chain resilience and overall growth strategies.
- Recognise and act on the popular zeitgeist of the age. It’s not enough to emphasise environmental, social, and governance objectives (which have implications for global supply chains) to your customers and the end consumers, it’s as important to ‘live’ these values with your employees too.
In the face of technical complexity and macroeconomic, geopolitical volatility, leaders must build more resilience into their daily processes for everything from people management to supply chains.
Being ready to turn adversity into opportunity has always been the mantra of successful businesses around the globe. However, in an age when there are more challenges (business and societal, technology and environmental), nuances and complexities than ever before, these five guidelines should help organisations navigate possible choppy waters ahead.