As we prepare to enter a new year, it’s important to look ahead and anticipate what challenges lay ahead so we can plan accordingly. In this article, we will explore some of the top sourcing challenges brands will face in 2023.
Top Sourcing Challenges To Prepare For
Over the past two years, brands and retailers have had to pivot their priorities and adjust to new challenges. Supply chain teams are now learning to be more proactive and anticipate upcoming disruptions. In fact, a recent Mckinskey survey uncovered that 81% of supply chain leaders agree that it’s time to reimagine their operations.
Below are some of the top sourcing challenges that brands will need to and address and adapt to in 2023:
1. Rising Shipping Costs
According to research, shipping cost is the primary cause of inflation worldwide. As fuel prices increase, so does the cost of transporting products from one location to another.
Brands and retailers will need to find creative ways to reduce shipping costs and avoid price increases that could alienate their customer base. Strategies such as near-sourcing can effectively reduce travel distance and help to offset the impacts of inflation throughout the supply chain.
2. Price Uncertainty
Price uncertainty due to market volatility, currency fluctuations, and increased cost of raw materials was prevalent in 2022 and will likely continue into 2023.
Market volatility may cause firms to delay investments and decision-making or increase the risk rate in their management activities. Adopting real-time data analytics will become crucial to making accurate predictions and forecasts for your supply chain.
4. Looming Recession
The forecast in the UK suggests that there will be a 5% fall in the manufacturing of commodities due to the economic conditions is another sourcing challenge. Procurement managers must act fast because supply chains are the first to feel the impact of inflation and recession.
5. New Regulations
Procurement managers should be cautious about environmental regulation because new ESG laws and regulations will be enforced in the US and EU soon. The rules will require companies to send and receive ESG questionnaires to gather their ESG reports.
Be Proactive in 2023
Brands and retailers that made it through the past two years have proven their ability to adapt and thrive in challenging circumstances. Now it’s time to apply the lessons learned and take a proactive approach to the new challenges we are facing.
At AQF, we are a data-driven partner that can offer diverse quality control services, such as:
- Supplier Audit - to verify if the supplier is capable to fulfill your orders
- Technical Compliance File - to stay complaint with latest regulations and prepare required documents
- During-Production Inspection - to make sure the production progress meets schedule and no delay
- Pre-Shipment Inspection - to save time and money by solving problems before shipment
Contact us today to get the guidance and tools you need to manage quality control so you can Identify risk areas and implement mitigation strategies faster.