Supply Chain Lessons from 2022

At a GlanceThe eight lessons from 2022

Lesson 01Build relationships with local suppliers

The pandemic lengthened import times and raised prices, pushing businesses to shift sourcing from foreign countries to closer locations and to diversify suppliers for efficiency, reliability, and cost-effectiveness. Storing inventory closer to consumers is now trending — which requires long-term relationships with local suppliers.

The 2022 lesson is a paradigm shift away from mass manufacturing: onshoring and nearshoring let companies manufacture, distribute, and complete orders on demand — without the labour shortages, ocean-freight problems, and other barriers that plagued global networks.

Lesson 02Secure backup inventory storage

Securing backup inventory storage became a top global priority. Businesses now use 3PL warehousing, subleasing, and co-warehousing to handle excess inventory. To scale, focus on optimal inventory control and keep the right products in the right places to fulfill orders when needed.

Multiple smaller storage facilities in strategic locations help — but analyze the data closely to ensure correct stock levels at each distribution site, understand where orders originate, and streamline the process.

Lesson 03Use supply chain management software

Companies without a tailored supply chain management solution risk a wide range of complications. Digitizing management identifies weak points, determines risks, and proactively mitigates them — making operations more agile and adaptable to disruption in real time.

Software built on artificial intelligence and machine learning can map and monitor processes and focus teams on value-added work. Because risk often emerges from lower-tier suppliers — causing delays and significant cost — choose a system with mapping, monitoring, and predictive analytics that finds, categorizes, and reports on supplier risks so you can act proactively.

Lesson 04Create a team of qualified professionals

Streamlining supply chain operations means hiring experienced, skilled supply-management staff — your decisions can make or break the business in 2023. When you diversify suppliers, you must invest in growing those relationships, and a professional team optimizes processes and increases revenue through effective collaboration and communication.

Building a solid company-to-supplier network requires people experienced in supplier sourcing. Develop sales-like KPIs and bring in qualified account managers to educate and train the team and set targets. It’s a daunting, expensive, time-consuming approach — but it pays off long-term, and you can’t afford to leave your company behind. Strong external partnerships also depend on sophisticated internal relationships.

Lesson 05Diversify the manufacturing network

Diversifying the manufacturing network is a game-changer for supply chain resilience. Finding new suppliers keeps critical processes running despite potential risk — if one supplier can’t deliver, a backup keeps finished products flowing to clients without delay.

Achieving this multi-sourcing method means contracting with multiple suppliers, or creating partnerships with sole suppliers across various production locations. The trade-off: splitting order quantities can diminish economies of scale and raise purchasing costs through additional supplier assessment and onboarding.

Lesson 06Nearshoring is key to success

Nearshoring moves projects and operations to a nearby country — unlike offshoring to countries with cheaper labour and resources. In today’s politically charged trade environment, with rising tariffs raising total landed cost, nearshoring is an excellent solution.

Adopting nearshoring requires high-quality technology to make communication effective. It also enables sustainable practices — and manufacturers invest in automation and nearshoring to compete with digitally strong rivals and increase profitability.

Lesson 07Leverage advanced analytics

Automation and advanced analytics keep accelerating, helping companies reduce disruption through digital, agile management. Implement predictive and prescriptive analytics alongside advanced robotics, machine learning, big data, and artificial intelligence for greater visibility, efficiency, and data-driven decisions — and higher predictability and profitability.

Everything today depends on effective data governance, operations, and security. Advanced analytics and the correct use of digital tools build resilient supply chain designs that mitigate adverse events efficiently — equipping companies with real-time insights to stay competitive, deliver optimal service, generate value, and grow market share.

Lesson 08Focus on digital supply chains & cybersecurity

Digital supply chains promote visibility, agility, and resilience. Digitized networks use cutting-edge technology to augment data collection and workflow — streamlining data infrastructures for real-time analysis and informed decisions. Digitizing requires robust sensors, the Internet of Things, and cloud-based networks across shared internal and external interfaces.

Cybersecurity protects sensitive data and keeps hackers out of company systems. Adopting blockchain, machine learning, and AI improves decision-making, while cybersecurity protocols shield networks from malware, ransomware, and other attacks. Interconnectedness can expose partners’ and clients’ data — so safeguard networks, people, devices, software, and applications.

Final WordsPrepare for continued volatility

Supply chains shifted massively in 2020, 2021, and 2022. With the pandemic, the Russia-Ukraine war, and geopolitical events likely to persist, planners must prepare for increased variability and volatility across supply, production, sales, and operations.

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