Ivanti Wavelink tips on how to recession-proof supply chains
Business has been extremely volatile for supply chains since 2019, and today supply chain leaders are concerned whether they can navigate a recession.
In a time of ongoing economic downturn, supply chain companies are more prepared than ever for change. However, they are still desperately aiming to streamline and optimise their operations to stay afloat.
Economic downturn means narrow margins, manufacturers see supply chain as a way to reduce costs. Supply chains run on minimal margins anyway, so it can be difficult to cut costs while still maintaining operational efficiency.
In 2023, we might see supply chains turn to different forms of delivery services, depending on what customers are willing to spend.
Currently, many customers are reluctant to buy delivery is more than two days. This is a challenge for supply chains.
Supply chains & recession: Will tech investments increase?
Cost-cutting has traditionally been a go-to tactic for organisations during economic downturn, but Gartner research suggests firms across industries are looking to increase tech budgets in 2023.
Tech has been spotlighted throughout the pandemic as a means of navigating uncertainty. It provides organisations with agility, flexibility, and scalability, but will this investment really happen when money is tight?
Companies are going to be in one of two supply chain camps. There will be those that circle the wagons and decide not to spend, something we saw this at the beginning of the pandemic. The uncertainty of what tomorrow will look like causes some companies to freeze everything.
Others, however, will invest in more technology to give them the boost they need to survive economic downturn.
A common tactic across the board, however, will be analysing processes. For example, consolidating items into fewer deliveries to reduce costs.
Optimising operations and getting rid of inefficient processes will be vital. There is plenty of technology that makes streamlining easier. Some organisations will already be using it, while others will seek to invest.
Supply chains & recession: ensuring productivity
During a recession, cutting staff levels is another way to keep costs low, yet the labour market is tight, with organisations struggling to recruit the staff they need. Over the next year, we will see a continued trend of organisations trying to boost worker productivity despite staffing levels.
Some organisations are looking at co-bots – robots that assist workers rather than replacing them. Warehouses can reduce walk-time and heavy lifting, allowing staff to use their time more productively.
Similarly, voice-picking solutions allow workers to keep moving throughout the warehouse as they pick items. Such tech enables supply chains to speed up processes while keeping up accuracy, despite a lack of staff.
Accuracy is also key in supply chains; mistakes are what cost you. Each returned parcel can cost retailers up to £20 due to issues such as transportation and storage.
It can be frustrating for organisations when returns are due to warehouse errors, so upping accuracy can help to greatly reduce expenditure.
Supply chains & recession: streamlining and optimising
In recessions, spending dynamics tend to shift, and supply chain organisations that shift with it will have a higher chance of survival.
Efficient processes across operations is key to keeping costs low, while still working to customer demands. Leaders can then be sure the bottom line is being met and customer satisfaction stays high.