- Economists expect slower economic growth in 2023, but still debate whether a global economic recession will officially emerge.
- Despite the challenges of the last two years and current economic fears, only 12% of companies have stepped up to protect themselves against supply chain disruption.
- Organizations that fail to prepare are more vulnerable to avoidable risks – vendor failures, operational shortfalls, and devastated revenue growth.
- It’s not too late: the impact of a downturn can be significantly muted with five digital updates to supply chain operations, to help you future-proof your supply chain.
One of the hottest topics in business and financial media is the potential for a global recession. In the “will they or won’t they” tradition of every great cliffhanger, journalists are asking the world’s sharpest economic minds to predict a) whether it will happen soon, b) how long it will last, and c) what its impact will be.
In many ways, “winter is coming” – whether we’re ready or not. Advanced economies are slowing down, and inflation is adding debt pressures on businesses and consumers. With four recessionary periods occurring since the 1970s, most supply chain leaders will have experienced the upheaval of an economic downturn and will be familiar with the impacts. The difference today is the technology available to design and operate supply chains that are far more resilient to this type of disruption.
For most supply chain organizations, inflation and economic uncertainty is a troublesome outlook. They are already exhausted from a two-year upheaval to their operations, planning principles, and legacy practices. And only 12% of companies have taken the steps necessary to protect their supply chains and operations against future disruptions, according to the World Economic Forum.1 And the remaining 88%? They are more vulnerable than ever to otherwise avoidable risks, especially vendor failures, operational shortfalls, and devastated revenue growth.
If you haven’t started planning for rising costs, now is the time to future-proof your supply chain
Are supply chain organizations in a dangerous situation? Experts think so: the financial toll associated with the most extreme disruptions lasting a month or longer has been climbing.2
Supply chain organizations, at their core, must play an essential role in the fight against threats to economic growth. Decision-makers need a clear understanding of real-world demand and its impact on production capacity, supplier expectations, and channel allocations.
For example, inventory levels must be monitored in real time to ensure availability to fulfill customer promises. The movement of goods in transit all over the world should be effectively tracked and traced to help ensure deliveries reach the right destination at the right time while maintaining high product quality. And most importantly, supply chain leaders need to know what to expect when processes are improved, new digital capabilities are adopted, and the supply network is optimized.
Unfortunately, most supply chain organizations have yet to achieve the level of predictability to accomplish these tasks – despite aspiring to it. But it’s not too late: you can foster that union now to significantly mute the impact of a downturn and future-proof your supply chain with five digital updates to your operations.