If there’s one word that’s been universally associated with supply chains these past two years, it’s ‘disruption’.
Geopolitical conflict, rising inflation, economies in recession, climate change-related events, the pandemic, cost of fuel, material and talent shortages…these are just some of the factors contributing to the ‘Great Supply Chain Disruption’, which is costing Australian companies $11 billion annually.
As importers and managers of a national distribution network of kitchen, laundry and bathroom ware, our supply chains have been put to the test since 2020.
Like many others in the industry, while we’d love to know when supply chains will return to their ‘usual’ state of chaos, our National Operations Manager, Dan Butler, doesn’t have a crystal ball (sadly)!
However, we predict that by proactively keeping ahead of supply chain trends — both in Australia and internationally — we can manage the ongoing impact of the ‘Great Supply Chain Disruption’ for our clients, and shape a successful, sustainable future for our company.
Here are some of the supply chain trends we’re watching out for in 2023.
Trend #1: Cyber crime risk management
In 2021 alone, cyber-attacks on supply chains increased by a staggering 430 per cent, so it’s no wonder cybercrime has been identified as a key trend to watch in 2023.
As supply chains become more complex, digitised and interdependent, so do cyber criminals, who are infiltrating supply chains in record numbers to damage or steal from businesses.
This can have “cascading impacts” for affected companies, depending on how interconnected the relevant suppliers and clients are, said Nick Wagstaff, Principal Consultant at Proxima, a provider of supply chain solutions to FTSE 100 and Fortune 500 companies.
“Each technology-using link in a supply chain has a potential vulnerability…in some cases, infections can lay dormant for several years, waiting for the right opportunity to attack,” he said.
Bill Balnaves, Seima’s Head of Technology, is responsible for continually monitoring and evaluating emerging threats for our supply chain, and new technologies such as Artificial Intelligence agents that can be used to combat cyber crime.
He says the current trend of B2B communication within supply chains means companies need to think about their layers of defence.
“It’s all about B2B communication at the moment,” he said. “What we’re seeing is a much larger focus on integration between the IT systems used by different companies.
“At least half of my work at the moment is allowing our systems to talk to our customers’ systems.
“When doing this, we always ensure we’re restricting communications to specific IP addresses and the communications are encrypted with high-level encryption keys.
“We also use third party clearing houses, so that we’re not directly exposing our network. This provides another layer of defence…cyber security is all about layers of defence,” he said.
For more information about how to reinforce your supply chain against cyber crime, visit the Australian Cyber Security Centre’s website.
Trend #2: Greater investment in technology
From saving time, money, and energy; to improving accuracy and aiding in forecasting and decision-making; organisations will continue to invest in technology in 2023 – especially cloud-based and automation software.
In fact, KPMG reports that six in 10 organisations plan to invest in digital technology to bolster their supply chain processes, data synthesis and analysis capabilities in 2023, Seima included.
“We are looking at a number of different solutions for EDI, which is essentially the automation of orders in, and orders out,” Dan said.
“We will also be EDI-ing between our warehouse management system and our major carriers to automate the consignment process.
“And then we will be automating the return of completed consignments back into our ERP and WMS systems, which means we can control and track our deliveries with even greater efficiency.”
Technology like RF scanners and guns, finger scanning, and voice picking are also being considered for use in our warehouse management systems nationally, which will reduce picking and packing errors.
Trend #3: Going green(er)
According to McKinsey & Company, supply chains account for more than 90 per cent of a company’s environmental impact.
So it’s no wonder that in 2023, many organisations will increase their focus on sustainable sourcing, facing increasing pressure from customers, employees, investors, and governments alike.
At Seima, in addition to our Warehouse Management System being paperless for the past seven years, we’ve recently taken additional steps to reduce our environmental impact by rethinking our approach to packaging, and by using renewable energy sources.
“We’re reducing the amount of waste that we use daily in terms of wrap and tape and packing, and how we actually supply the goods out of our origin, including limiting the use of polystyrene,” Dan said.
“We are continually investigating the introduction of recycled paper and recycled plastic, and make sure that when we do have waste, that we separate it properly, so it is able to be recycled again.
“We also use solar in our national distribution network to offset our energy use.”
However, we recognise there’s always more that can be done, especially with regards to CO2 emissions.
“We have transitioned to electric manual handling equipment, but if, and when, we’re able to use electric vehicles to move freight around the country, making that transition will be a priority for us.”
Trend #4: Warehouse mobility apps
Warehouse mobility apps that can be installed on any phone or device will “transform fulfillment completely” in 2023, according to Australian Manufacturing News.
Traditionally only reserved for major players like Amazon, this new wave of apps will enable all businesses to provide staff with real-time access to inventory at the touch of a button (or screen!).
At Seima, we know the potential these apps have to make life easier for our distribution team — in turn, improving our customers’ experience with us too, said Dan.
“Our WMS is electronic, but we’re always looking at ways to improve our systems and processes so that employees can be more involved,” Dan said.
Trend #5: Embracing local distribution
With extreme-weather events like floods and bushfires occurring across the country, it is becoming harder to transport products between states.
So, a local distribution model is the way to go in 2023 and beyond.
“It’s quicker and more efficient to ship directly to the state you’re actually supplying, and supply locally, with the employment of regional distribution centres,” Dan said.
“It means you can also reduce the line haul legs in Australia, especially with all the climate scenarios we’ve had in the last 12 months.”
In January 2023, Seima opened and began trading from Narangba Distribution Centre in Queensland.
Narangba is a major distribution hub for our kitchen, laundry and bathroom ware, and is further strengthening our supply chain and service for our customers in Queensland and New South Wales.
“Narangba gives us the opportunity to reduce our lead time from our major suppliers in China from 24 days to 15 days,” Dan said.
“This allows us to supply good volumes into the major merchants in Brisbane and New South Wales without having to do a domestic linehaul leg from Adelaide, which is not only costly, but takes a lot of time as well.
“Narangba opens up a lot of doors for us in terms of the major merchants being able to offer Seima solutions into the market, at a more effective rate and in a higher volume.