2023 Supply Chain Key Issues Research

January 24, 2023
Season 4, Episode 5

Highlights from our 2023 Supply Chain Key Issues research, with Principal, Supply Chain Business & Transformation Practice Josh Nelson and Associate Principal Erin Blair.

Show Notes

Welcome to The Hackett Group’s “Business Excelleration Podcast,” where week after week we hear from experts on how to avoid obstacles, manage detours and celebrate milestones on the journey to world-class performance. This episode is hosted by Gary Baker, Global Communications director at The Hackett Group. His guests include Josh Nelson, principal of Strategy and Innovation at The Hackett Group, and Erin Blair, associate principal, at The Hackett Group. Together, they discuss the supply chain key issues for 2023.

First, Erin starts off by sharing a study that The Hackett Group conducts every year to identify areas where they need to focus their attention. This study was conducted with over 350 executives and across a range of supply chain areas in 2022. There were many supply chain disruptions, and they expect to see more in 2023. These disruptions include economic downturn, climate issues, geopolitical unrest and cybersecurity events. Erin states that an interesting find from the survey is that optimizing inventory levels jumped to the No. 1 spot this year. Because of the COVID pandemic, companies built up their inventory, and now the result is that inventories are bloated and out of sync with demand. Approximately 63% fell short of their expected supplies in 2022, so now the first goal in the supply chain for 2023 is to reduce inventory or optimize it. The second is to reduce the supply chain risk, and the third is to enhance product availability. The fourth goal is cost-efficiency, and the fifth is to improve sales and operations planning. They also discuss establishing solid planning for the next disruption.

Josh also discusses how the past two years have been impacted significantly by COVID. He talks about mitigating supply chain risk and improving agility. In 2023, there will be more of a reaction to market pressure since some COVID priorities still remain an issue. He says the inventory needs to be in the right place at the right time to optimize inventory levels.

Next, Erin and Josh discuss the many different strategies to identify and solve risks. On the supply side, they are expanding supply chains. While on the inventory side, companies are evaluating if they have the right manufacturing plants in the right place. There are not a lot of new techniques but an increased focus on the current ones. Some of these include product simplification, risk data, implementing formal evaluations, and better visibility to Tier 2 and Tier 3 suppliers. In addition, they also talk about the expected workload decreasing, and they have seen a decrease in staff by 1% to 2% in planning and logistics. There is now talk about technology solutions that provide better automation, so people can do things more quickly and accurately. These technologies include advanced planning and inventory optimization areas they need to focus on. There is also an increase in supply chain analytics in that companies are looking beyond reporting information to inform better decision-making and apply more analytical models. In manufacturing and logistics, they want to automate and improve results. In warehouse management, it has been very transactional, so the idea here is to add additional planning and analytical capabilities for better insights into the buildings. Another big area of focus is network design and optimization. They want to look at the distribution footprint globally.

Finally, they discuss recommendations for the client to first make sure you have the right materials and products in your network. Next, you need to better predict what your needs will be. Clients also need to mitigate risks and put processes in place to manage risk in the supply chain. They also suggest closing the talent gap – in 2023, the plan is to acquire new skills and challenges. They need the right people with the right skills, and training will be critical. Josh also emphasizes the focus on balance, and there won’t be a solution that fits for all companies. They need to look at the issue, understand and analyze data, and solve supply chain issues without ruining your budget. There also needs to be a continued focus on implementing businesses and processes, and improving the cycle fund and frequency, which can be done through technology and better processes. Another recommendation is to have network options for manufacturing and distribution facilities, which optimize the use of assets and better serve the needs of the customers. The last recommendation is understanding the data you have available and leveraging technical tools from that data. 


  • 0:45 – Welcome to this episode hosted by Gary Baker.
  • 1:15 – Addressing supply chain issues and top priorities in 2023. 
  • 5:04 – How these top priorities have changed since last year.
  • 6:48 – Have companies successfully mitigated these risks?
  • 8:38 – Technology priorities in supply chains in 2023.
  • 13:32 – Recommendations for clients in the supply chain in 2023.
  • 18:58 – Sharing closing thoughts.