How to control supply chain management costs in 2023?

As we are nearing 2023, many supply chain executives will get immersed in their company's annual strategic planning process. Before you plan for the following year and beyond, look at the most important trends affecting supply chain management. From the faraway factory to the stocked shelves of your warehouse, your supply chain is ripe with chances to save costs and boost profits. 

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Reducing supply chain costs is challenging since it relies on many sources. If you can surpass your supplier's pricing in only one step, you may reduce their value, leading to less dedication. Also, intellectual property issues might cause your groundbreaking product to be imitated and sold under a competitor's name.

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The concerns have been around for a while. The threats have changed and expanded, but 2023 is not far off. Emerging risks in the aftermath of a pandemic should be specified alongside pre existing ones. This blog post will help you to control your supply chain costs and tackle alarming situations. 

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Heads Up about the challenges you are going to deal with

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Impact of pandemic

The global economy will be slow to recover from the months of shipping delays and labour shortages imposed by a confined workforce. Many manufacturers also reduced output at the outset of the pandemic as they anticipated lower demand due to the epidemic. 

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Instead, online shopping activity exploded, forcing stores to stock up to meet demand. Since then, manufacturers and suppliers have been making adjustments to keep up. The good news is that adaptable sourcing and chain shortening have helped shippers weather interruptions. But, getting back on track will take more time than many predicted.

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Inflation pressures 

Due to the interrelated nature of the supply chain, a price increase at one point will have repercussions farther down the chain. Inflation in the expenses of labour, energy, and transportation is quite high at the moment. The current supply chain is in danger due to all of these factors. According To the report, inflation has increased up to 7% so far.

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Scarcity of workers

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The external obstacles, such as pandemics, inflation, political instability, and so on, have resulted in severe labour scarcity in recent years. It causes serious difficulties for supply chain executives. The problem becomes bigger as labour shortages affect several other industries. 

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Consider a factory that has too few workers. Distribution centres take the most hit due to manufacturing slowing or stopping altogether because of a shortage of available labour. The scarcity of workers affects logistical operations, delaying deliveries and sometimes causing consumer dissatisfaction.

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Obstacles to Long-Term Sustainability

Constraints on the supply chain from climate change are here to stay. Extreme weather occurrences trigger continued supply chain disruptions and resource constraints. Investing in renewable energy and cutting carbon emissions are two ways a group may work toward a more sustainable supply chain. 

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According to a recent Oxford Economics survey, 8% of supply chain decision-makers have or are developing a sustainability mission statement. Half of these executives will need to take extra steps to improve the transparency of their supply chains as part of their sustainability efforts.

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Increased Cyber Risks

Cybercrime is a developing issue that must be dealt with by supply chain management. As digital technologies are incorporated into supply chains, this problem has been growing. Cyberattacks on the supply chain have devastating effects, as seen by incidents like the SolarWinds breach. 

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The cybersecurity market is anticipated to grow at 13.4% to surpass $376.32 billion in 2029. It is not an alert for 2023 but beyond.

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Resilience and visibility

Collective resilience has been the worldwide approach from the beginning of the epidemic. With that resilience has come a desire for more public awareness. Manufacturers and distributors are shifting their production back and forth between domestic and foreign locations while shortening supply chains and increasing their diversity of suppliers. 

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Until permanent solutions can be implemented, interim resilience measures will need to be the norm if 2023 is to see a regular supply chain.

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How to keep the supply chain cost in control?

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Locate Expensive Workflow Waste

Forget aside transportation costs altogether to find unseen supply chain management costs. Instead, it is recommended by the Logistics Bureau that you see how your orders are processed from beginning to end. Thus efficiency is key. Lookout for slowdowns in the process or situations when staff are stuck doing something manually that may be automated. 

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Observe the procedures used to complete financial dealings as a first step. Is money collected from clients using a specific service like PayPal, Stripe, Venmo, etc.? You should look for a provider that charges you a reasonable price per transaction or subscription cost. 

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Observe Inventory Control Procedures

Inefficient inventory management is a major factor in the high prices associated with the supply chain. Any product that goes missing expires, or gets damaged is one less you can utilise to meet orders and demand. Your storage expenses may be drastically cut if you maintain close tabs on your inventory and carefully record each item you store there. 

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Better still, you'll be able to see patterns that lead to inventory loss or waste, allowing you to implement solutions and begin cutting expenses immediately.

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Lower Transportation and Shipping Expenses

One of the greatest and most costly difficulties your warehouse will encounter is delivering things to the customer. Check your existing order delivery practices to lower transportation. It will be more expensive if the business is conducted inside the company. You might think about reducing the frequency of delivery by making bigger orders instead. Hiring specialised transportation firms might be the next best thing if that isn't possible. 

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To put it simply, this will reduce operating expenses. And you won't have to deal with the hassle and added cost of adding full-time employees to keep up with demand, either.

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Automate repetitive process

The credibility of automated systems is under doubt. While many workers regard it as a threat, it may help you develop a more efficient supply chain at a lower cost if used properly. Contemplate how much time your workers spend on activities that a computer may handle. Time is required for stock checking, order processing, and data analysis. Your workers might put that time to better use in other company areas. 

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Rather than compromising, automate the repetitive process. Save money, energy and workforce.

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Conclusion

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Year or month does not make any noticeable difference in the costing process. Managing a supply chain is challenging labour. While supply chain companies have faced difficulties before, they should know that the fight is far from done. 

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But don't let these scenarios steal your calm. That's why Traqo is here. Traqo makes your supply chain management smooth with its top-notch transport management solution. You can reduce your logistics costs, save 70% of the time in Vehicle Finalization and Increase logistics efficiency by 68%. Traqo will help you to manage the fleet and reduce vehicle detention.

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Try Traqo today. 

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