We can freely say that the supply chain is the backbone of every successful business. A supply chain includes everything from the production itself to delivery to end consumers. Therefore, the entire process must run smoothly. Otherwise, business setbacks can be expected. Innovations greatly improve both the supply chain and business in general. And likewise, the success of shipping and logistics companies depends on high-tech innovations. We will mention some of the most important 2023 supply chain trends. Keeping up with new trends will ensure the steady growth and development of your company. So let’s see what are the latest innovations you can apply in supply chain management and your business overall.
Sustainability and circular supply chains
Thanks to stricter laws and regulations regarding sustainability, the supply chain is also changing. It is also influenced by the habits and demands of consumers, who are more and more turning to green products and practices. All this leads companies to turn to renewable energy sources and recyclable materials. And as for the supply chain, companies monitor the emission of exhaust gases more than ever before. In order to reduce the emission of harmful gases into the air, a new practice appeared – the circular supply chain. The idea is to restore the cast-off items and then put them back on the market. Day by day, there are more and more such goods on the market, from clothes to furniture. This model has brought together producers and sellers and users around the idea of sustainability. It affected the supply chain as well.
Logistics Saudi Arabia offers a wide range of logistic and supply chain practices and solutions. Both for producers and traders across industries. In the post-COVID-19 period, we have further raised the efficiency, agility, and reliability of our services to clients. And all while using environmentally responsible practices.
When it comes to the environment, it is crucial to note that transport and electricity are the biggest contributors to greenhouse gas emissions. And both are necessary, which raises the question of green logistics. How to reduce electricity consumption, and are there alternatives for fossil fuels? This is one of the 2023 supply chain trends and it also applies to storage solutions. Demands for eco-friendly storage are rising. Eco-friendly storage is a good solution because they have timers and advanced control systems. They are controlling the usage of power, water, gas, and other resources. So that there is no unnecessary waste of resources. Speaking of storage solutions, you can easily find an appropriate warehouse Saudi Arabia that fits your needs. Some studies show that over 60% of customers will pay more if the service is eco-friendly. Therefore, companies that opt for eco-friendly trends can expect increased loyalty and profit.
Circular supply chains
The supply chain can be affected by the lack of raw materials on the market and the increase in prices. To deal with these kinds of setbacks, companies are turning to circular supply chains. This means they recycle their used and old products to make new ones. It reduces the cost, as well as the usage of raw materials. This reduces the impact on the environment and creates less waste. As things stand right now, that won’t be optional anymore. Since rigorous laws and regulations keep pushing companies to turn eco-friendly. And companies realize that the previous linear supply chain model is not practical. It leaves behind waste, and the problem of lack of raw materials still remains, while the costs rise. It’s a so-called “take make throw away” method, which has become obsolete. Circular supply chains should overcome these problems with an unsteady market of raw materials.
Circular supply chains have not yet taken root everywhere, but they are definitely the future. So far, several types of supply chains have been developed to suit each type of business.
- Resiliency and flexibility are the main aspects of the agile model. It is ideal for jobs dealing with special orders.
- The key characteristic of the continuous flow model is stability, in order to ensure a stable flow of information and products. This one is perfect for high-demand markets, that don’t tolerate fluctuations.
- The custom configured model is structured to answer to custom demands in production. It’s a mix of the previous two models, ideal for multiple products.
- The efficient chain model is about maximized usage of machinery and equipment to reduce costs.
- For trendy products that have a short lifecycle is used, the fast chain model.
- Flexible model
- Supply chain operations reference model
If you’re opting for green storage solutions, pallet racking Saudi Arabia will surely satisfy your desires. It’s a system of shelves for storing materials in pallets in horizontal rows on multiple vertical levels. It is also convenient that they are suitable for forklift access. Pallet racking solutions combine space savings and electricity consumption needed for cooling and security systems. They are designed to be sustainable and safe, which is the future of storage solutions. High-tech innovations such as robots already have their application in warehouses. This is a significant upgrade as online shopping has increased the demand. Speed has become essential, but it comes with a price, difficult and chaotic working conditions for the staff. That’s why pallet racking is one of the main trends in the supply chain in 2023. It saves space, time, and resources required for maintaining these warehouses.
Elastic logistics is one of the 2023 supply chain trends
In order to cut costs and optimize the usage of their resources, companies must adopt new supply chain methods. This primely applies to the logistics sector. The ability to adapt to changes in the market is very important, in order for the company to survive among competitors. Elastic logistics means managing business in a way that can quickly respond to the supply chain’s demand. It implies the ability to quickly decrease or increase logistic measures to quickly match demand. With the help of new technologies, this has become an easy task. For instance, the warehouse Riyadh selection is just a few clicks away. Elastic logistics has introduced positive changes in the form of route optimization, sailing schedules of carriers, saving space in warehouses, etc. Now companies are able to deal with congestion and make better use of space in vessels and docks.
Supply chain integrations and outsourcing
Companies have realized that teaming up with 3rd party partners can improve their customer services. And at the same time costs are being reduced. This is especially helpful for companies that mix the two different ways of shipping. For instance, a company that owns sea carriers teams up with a company that deals with the land transportation of goods. This way reduces costs and delivery time while improving customer service. This applies not only to transport services but also to packing and storing. And also on everything from the production itself to delivery to end customers. Likewise, the logistics company in Dammam can team up with a partner inland to improve and speed up their services. And not just inland, but we have partners all over the world. We are also members of many international organizations, which says a lot about our professionalism and success.
The usage of blockchain technology facilitates the handling of data. And that is an essential part of the supply chain. With this data processing system, the entire supply chain becomes more transparent. And that reduces interruptions and enables continuity. Best of all, blockchain provides insight into the product journey to all participants in the supply chain. This means that all participants in the supply chain from cargo carriers in Saudi Arabia to end consumers can track the delivery. The blockchain system is significant and applicable for invoicing and payment of goods and services. Also, it helps managers to predict issues, and find a solution before the problem arises. In addition to all of the above, blockchain also serves as a kind of data protection. Data cannot be edited without everyone’s consent. It is expected that more and more businesses will adopt blockchain in the years to come.
Robotics and AI technology as the main 2023 supply chain trends
Robotics has already entered all spheres of production as well as logistics. It is also already widely used in the supply chain. Today, it is almost impossible to imagine warehouses without them. They perform physical tasks such as lifting and stacking and increase efficiency in warehouses. In addition, they affect the speed and efficiency of routine operations. They perfectly complement the human workforce, and they also replace it when needed. Autonomous robots are the future of the supply chain, thanks to their wide application. Their use reduces the possibility of errors, and optimizes the time of selection, sorting, and storing. This is extremely important for large warehouses such as warehouse Jeddah. For such a warehouse, they mean a stable workforce and capacity utilization.
As for AI, it’s already obvious that is one of the crucial factors in logistics progress. According to some studies, it has already improved logistic costs by 15%, and customer service levels by 65%. The use of AI has led to changes in warehouse organization by easier and faster gathering and analyzing data. And that had a major impact on the efficiency and profit of companies. Among the companies that have adopted AI into their supply chains are some of the world-famous brands like Microsoft Corporation, Google, Samsung, etc. Saudi Arabia adopted National Industrial Development and Logistics Program as part of Vision 2030. Its goal is to transform KSA into a world-class economic leader and logistics center. It was launched in 2019 and it refers to four sectors, energy, mining, industry, and logistics. It is expected to improve each of them and help the growth of the economy overall.
The cloud-based systems make room for innovation in supply chains. Software as a Service (SaaS) is helpful for the management of the supply chain. One of the most used SaaS apps is Salesforce. Once you store your company’s data in the cloud, your whole team can access them at any time. This is very convenient in contrast to the previous practice, where paperwork and protocols complicated the organization of work. With SaaS, you can be sure your business data is safe but also easy to access. Efficiency is at a high level and errors are rare. All this is crucial for the global and digital supply chain. And helps small companies keep up with the bigger players in the market. Another major plus of using SaaS is its ability to predict problems in supply chains. For these purposes is best to use forecasting tools and models, that increase precision on-demand.
The future of supply chains and logistics in Saudi Arabia
The logistics sector has become a spine of global economic growth. There are numerous successful examples of countries that are leading importers and exporters like China, India, etc. They are great role models because of their supply chain systems. Saudi Arabia is rapidly joining these countries. Some expectations are that by the end of 2023, KSA logistic industry will achieve a CAGR growth of 3,3%. In simple numbers that means over $17,5 billion until the end of 2023. The government plans to invest in infrastructure as a way of boosting logistics. The measures will also cover warehousing, freight transport, e-commerce, and 3rd party logistics. All this plus high-tech innovation should boost the supply chain.
The main 2023 supply chain trends
We have listed only some of the latest 2023 supply chain trends that are expected to be major steps forward in logistics. And they all have a task to face the shortcomings in the current supply chain. And not only to face them but to deal with the constant rise of freight prices, and lack of raw materials, labor, etc. All of this may seem like a big challenge, but it promises rewards in profits and competitiveness.