Retailers need to transform the supply chain to optimize assortment.

Supply chain outlook for 2023 revolves around resiliency, optimization, efficiency and a bit of normalcy

Supply chain conditions are expected to improve in 2023 compared to 2022 and 2021, but executives in multiple industries say their companies will focus on resiliency and optimization as conditions remain fragile.

The comments from executives were made in a series of earnings conference calls in recent weeks. These executives noted that plans for 2023 are being formulated.

Among the key takeaways:

  • Goods are expected to flow more freely in 2023.

  • Inflationary pressures are easing in select areas but remain volatile.

  • Resiliency is a key goal but retooling a supply chain takes time.

  • Companies are not assuming that supply chain operations will return to the productivity and efficiency levels in 2019, before the COVID-19 pandemic.

  • Transparency will be required to optimize supply chain management.

Here's a look at select comments from CXOs on the supply chain in the year ahead.

Also: McKinsey: These 8 characteristics of resilient supply chains can give your business a competitive advantage | Execution management, process excellence key to outrunning inflation, supply chain woes says Celonis co-CEO

Joel Anderson, Five Below CEO

“With respect to supply chain, we are proactively managing our operations and navigating dynamic conditions. We continue to look for ways to control our destiny. As an example, we strategically accelerated inventory receipts to ensure a great in-stock position for the holiday season.”

Greg Lewis, Honeywell CFO

“We are also looking at our own supply chain from a resiliency perspective. It’s really difficult to completely uproot your supply chain, and frankly, it’s very inflationary. I think people are going to take those decisions really carefully. I will use the term surgical. We are sort of doing a few things around the edges to create some redundancy in places where we think risk levels may have gone up.”

Antonio Neri, CEO of HPE

“We are continuing to take proactive measures to mitigate supply chain challenges and we are working through our large order book, which has experienced no material cancellations. Over the course of 2023, we expect to see greater easing but not an end to supply shortages.”

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Josh Jepsen, CFO of John Deere

“We're seeing pockets of improvement in the supply chain, but it remains fragile. So, we're not assuming that our operations return to normal levels of productivity and efficiency in our forecast.”

Richard Hayne, CEO of Urban Outfitters

“Supply chain costs have dropped precipitously over the last six months, and our speed-to-market capabilities are almost back to FY '20 levels.”

Adrian Mitchell, CFO of Macy's

“There are two realities that we view in our planning. Number one is that goods will be flowing. We also believe the supply chain is going to continue to get healthier and healthier. But the key thing is that goods are flowing. I think what's important for us for next year is really thinking about inventory control.”

John Murphy, President & CFO of The Coca-Cola Company

“As we think about the supply chain, it's important to not just have efficiency as a metric, we also need to make sure that we have continuity.”

Mary Barra, CEO of General Motors Company

“As we've moved through the year, we have seen gradual improvement in the supply chain, including semiconductors.

Short-term disruptions will continue to happen, but we're taking concrete steps to minimize them and build long-term resiliency. This includes several strategic supply agreements for mature nodes where supply is most constrained. We are also working directly with semiconductor suppliers, ensuring long-term forecasts to increase transparency and ensure their planning cycles include our volume.”

Monish Patolawala, Executive VP and Chief Financial & Transformation Officer at 3M

“Raw material, logistics and labor inflation are starting to show some signs of moderation, and we are starting to see some evidence of global supply chain stabilization.”

James Umpleby, CEO of Caterpillar

“We're working closely with our suppliers, as I think all companies are doing, thinking about our supply chain. And certainly, resilience is very important.”

Celonis Media covers the process economy and the impact of process mining and execution management across industries. This article was based on publicly available information and doesn't reflect whether Celonis technology was used or whether the company is a customer.

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Larry Dignan
Editor in Chief (former)

Larry Dignan is the former Editor in Chief of Celonis Media. Before joining Celonis, he was Editor in Chief of ZDNet and has covered the technology industry and transformation trends for more than two decades, publishing articles in, Inter@ctive Week, The New York Times, and Financial Planning magazine.

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