In Part 1 of our 2023 Strategy series we deep-dive into Procurement and PO Management. We look back at the industry trends that defined 2022 and what we can expect in the coming year. We also share logistics experts’ best tips for shoring up your procurement, purchases and inventory strategies for 2023.
The end of the year is just around the corner and there’s no better time than now to start planning for 2023. We’ve compiled tried-and-true tips from Explorate’s senior logistics experts and partners, to put your 2023 supply chain strategy on the front foot from the word go.
After an unpredictable and volatile 2022, our customers have been asking what they can expect in 2023 and what they can do to get on the front foot.
While we can’t know for sure what next year will throw our way, we do know this: it’s time to be proactive and streamline logistics operations.
Part 1 of 3: Procurement and PO Management
- Supply chain disruptions having an enormous impact on Australian businesses and the way they manage their purchases and inventory levels.
- Businesses investing more in inventory on-hand to supplement supply chain delays and overall poor carrier performance.
- Overstocking merchandise, especially during sales periods.
- Global energy and raw materials shortages in manufacturing hubs like China impacting the availability of goods.
Expectations for 2023
- Businesses trying to return to lower inventory levels and just-in-time supply chains.
- Potential inventory piled up in warehouses.
- Shortages of warehouse or seasonal workers.
- More detailed operating and landed cost analysis to return to profitability.
- Technology and data becoming major drivers in modern supply chains to analyse consumer demand and better forecast inventory needs.
“Importers and exporters who can accurately forecast and plan across their supply chain will have plenty of opportunities in the year ahead to capitalise on a softer market. The best tip I can give our customers is to use technology to find supply chain efficiencies and reduce time managing freight. That will be a very effective strategy for 2023.”
Damien Cridland, Supply Chain Manager at Explorate.
“2023 will be another year of volatility and uncertainty for shipping. Procurement and PO Management will be key to improving the efficiency and effectiveness of your company’s performance so think carefully before making a purchase. Think strategically and not transactionally, think team benefit and not individual benefit. If you haven’t already, it’s time to move forward and embrace technology.”
Richard Brine, Head of Procurement at Explorate.
“Supply chains have had to evolve rapidly over the past 2 years. To have a strong, competitive supply chain in 2023 we need to be able to respond to changing customer demand around fast, affordable shipping. Those who are able to find the right balance of stock on-hand while being agile enough to change with their customer needs, are winning more customers than their competitors and will continue to do so next year. That type of competitive supply chain is what we strive to create with our customers.”
Conor Hagan, Explorate Co-founder.
“Companies should be able to scale operations and resources depending on consumer demand and product shortages. 2023 will be all about elastic logistics. Companies should also consider investing in AI and cloud technologies, as these are the best ways to predict consumer demand and have total visibility into the supply chain.”
Maggie Barnett, Chief Operating Officer at ShipHeroShopify report Shipping Trends 2023
Where to start
So, what are the next steps to front-foot your procurement, purchases and inventory management for 2023?
Start by using a good purchase order management tool. It will help you manage your order flow more efficiently, from manufacture through to delivery.
Explorate has in-house data and development teams, which has allowed us to develop our own PO management tool based on real customer feedback and needs. And our customers love it, because it gives them:
- Improved planning of upcoming orders for better pricing and service options.
- Full traceability of individual PO lines with quotes and shipments.
- Full visibility of actual PO line detail at a container level within a shipment.
- Easy integration of your ERP or PO Management data via API or CSV.
What have been the main issues with purchases and inventory management in 2022?
- Supply chain disruptions having a big impact on inventory levels and purchases.
- Inventory on-hand.
- Merchandise overstock.
- Energy and raw materials shortages impacting the availability of some goods.
What will be the inventory management and procurement trends in 2023?
- Lower inventory levels and just-in-time supply chains.
- Potential of inventory piled up in warehouses.
- Shortages of workers.
- Use of technology and data.
Why is Purchase Order Management important?
Procurement and PO Management are now crucial to improve a company’s performance. 2023 will be another year of volatility and uncertainty for shipping so having a solid strategy around purchases and supplier relationships will be crucial. Technology has become a major driver of change and improvement in this area, and is helping businesses to manage orders more efficiently, do better forecasts and projections and have more visibility from manufacture through to delivery.
An online PO management tool like Explorate’s gives you:
- Better planning of upcoming orders.
- Full traceability of individual PO lines.
- Full visibility of PO line detail.
- Easy integration of your ERP or PO Management data.
If you’re already an Explorate customer, check in with your designated operations specialist to see how we can help you be better prepared for the new normal in logistics. If you’re not with us yet but are interested in digitalising your logistics operations, get in touch to arrange a free demo.