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What is causing Supply Chain Issues in 2023? And what can you do about them?
It’s nearing the end of 2023, and while the headlines that helped make “supply chain disruptions” a part of the common vernacular have stopped (for now), supply chains still aren’t performing at the levels anyone would like.
In this post we’re going to look at what is causing supply chain issues in 2023, and how process mining can help you clear them.
External influences
We’re going to roughly group the issues into two buckets: external influences, and internal issues. Let’s start with external influences — the things happening in the world that are out of your control, that you just have to find a way to respond to.
Long lead times
Supply chains are incredibly complicated, with suppliers, manufacturers, and distribution centers often sitting in different locations geographically. So all you need is a minor bottleneck in a port, and suddenly your lead times are shot.
There’s a trend at the moment for companies to look at friend-shoring and near-shoring in order to try and minimize the potential disruptions, and this could help, but won’t solve the underlying issue: you don’t have visibility or control over your end-to-end lead times.
What you can do
If you use process mining to get visibility into how your entire supply chain is running, you will be able to not only get a clear picture of your end-to-end lead times, but also navigate the issues causing delays.
Some process mining vendors even have out-the-box apps that can help with this specific issue, like Celonis’ (imaginatively named) End-to-End Lead Times App.
Material shortages
Material shortages are a major supply chain issue in 2023. In fact, KPMG reports that “71% of global companies highlight raw material costs as their number one supply chain threat for 2023.”
And that’s only considering raw materials. Once you’ve got a finished good, you’ve got stockouts, excess stock, and obsolete stock to contend with.
What you can do
What you really need is a way to see where your inventory is, what can be moved within cost and time constraints, which of your suppliers is more or less reliable, more or less expensive, and be able to act dynamically.
And that’s exactly what process mining can offer. By giving you some much needed end-to-end supply chain visibility and control, you suddenly find yourself able to make swift, informed decisions. Which results in less time and money wasted, and more time spent delivering value to your customers.
Sustainability pressures
We’re definitely entering a new stage of sustainability, where ‘greenwashing’ is getting called out for what it is, and Scope 3 emissions are being closely scrutinized.
This is being driven on numerous fronts: consumer and employee pressure, tighter regulations, and corporate ESG initiatives. But there’s still a massive barrier to moving from vision to action, as Scope 3 emissions are the hardest to track, and incredibly difficult to impact.
What you can do
This is one area where process mining is incredibly valuable. Unlike many other sustainability tools that help to quantify and tackle Scope 1 & 2, process mining allows you to get a grasp on your Scope 3 emissions.
You can rank your suppliers by their sustainability metrics, and even plan your own transportation routes based on environmental impact. If you want to know more, check out The Realist’s Guide to Sustainable Supply Chains.
Internal issues
When trying to figure out what is causing supply chain issues in 2023, it’s easy to focus entirely on the external factors. They’re easier to see, and more comfortable to point to.
But it could actually be more beneficial to look at some of the internal factors driving under-performance in your supply chain. You might even notice that by tackling some of those factors, you are better able to navigate the external issues as they pop up.
It’s all about balance
A truly top-performing supply chain is all about balancing cost, cash, and service levels. But the problem is: supply chains operate in silos.
Individual teams such as Procurement, Production, and Distribution can invest in new technologies, redesign networks, and reorganize responsibilities. But when they stay within departmental silos, changes made in one department can have unintended upstream or downstream consequences for other teams.
This leads to a blame chain, where each department in the chain feels like the supply chain isn’t performing as well as it could be, disempowered to make change, and like it’s everyone else’s fault.
What you can do
By using process mining, you can take a new approach to supply chain transformation, looking at the very thing supply chains are made of: processes.
You start to see how each link impacts (and is impacted by) every other link in the chain. So you can get your supply chain working as one, and navigate whatever issues come your way.
Want to know more about how process mining could help you tackle whatever issues 2023 throws at you? Check out The Insider’s Guide to Supply Chain Optimization.
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