CHP 13

INFORMATION TECHNOLOGY IN LOGISTICS:

1. INTRO:
• Information technology (IT) in logistics is the use of computing resources
to store, organize, and classify information to improve logistics operations.
• IT has transformed the logistics industry by making shipping faster,
cheaper, and safer.
• IT helps track items at every stage of shipping.
• IT simplifies management functions and improves communication between
different parts of the supply chain.
• IT helps reduce response time to customers and partners.

• IT helps cut costs by reducing paperwork and increasing processing speed.

• Some types of IT used in logistics include: Barcoding and electronic scanning,
Electronic data interchange (EDI), Internet of Things, Blockchain, and GPS
tracking.
• Technology in logistics and supply chain management helps meet customer
expectations for product availability and ensures timely and complete shipments.
• Information technology (IT) is a vital component of supply chain management
(SCM) and logistics.
• IT can help with inventory control by providing detailed records on material
stocks, work-in-progress, and finished goods.
• IT can also help with collaboration between different players in the supply chain,
which can lead to greater agility and responsiveness to changing market
demands.
• The role that IT plays in supply chain management or SCM is so important.
• IT provides the tools which can pick up relevant information, break it down for
proper analysis and execute it for optimum performance of the supply chain.

2. ROLE (TB)
3. LOGISTICAL INFO SYSTEM:
INTRO:
• A logistics information system (LIS) is a set of digital programs that helps businesses
manage their logistics operations. LIS can help businesses with:
• Optimizing processes: LIS can help businesses optimize their processes to reduce
operational costs and improve customer experience.
• Managing operations: LIS can help businesses manage operations such as procurement,
storage, and shipment tracking.
• Coordinating movement: LIS can help businesses coordinate the movement of goods
and materials.
• Managing partners: LIS can help businesses manage multiple logistics partners.
• Eliminating errors: LIS can help eliminate errors in operations by digitizing the
warehouse.
• Creating planning data: LIS can help businesses create planning data and evaluate actual
data.
• Supporting decision-making: LIS can help support the decision-making process by
targeting and monitoring weak areas in logistics.
• LIS can be made up of paper-based or electronic records and reports.
• The data from all levels of the logistics system can be aggregated, analyzed, validated,
and displayed in LIS.
• This data can then be used to make logistics decisions and manage the supply chain.
• The LIS helps businesses to plan and strategize to optimize their logistics operations and
empowers them to effortlessly manage the operations such as procurement, storage,
order picking, shipment tracking, transportation, etc.
• LIS can include components such as:
• Logistics Data Warehouse: Allows users to design the LIS to meet their own
requirements
• Early Warning System: Helps users target and monitor weak areas in logistics
• Logistics Information Library: Allows users to access key figures in LIS using simple search
strategies
• LIS can help eliminate errors in operations by digitizing the warehouse.
• They can also help foster digital warehousing, where software executes tasks like
inventory control and order picking.
DEFINITION (TB)

4. FEATURESOF LIS: (TB)

• Accuracy. Increased accuracy in measuring inventory level reduces decision
uncertainty. Accuracy with regard to inventory can be defined as the degree to which the
information generated through the reports matches with that of the physical counts.
Ideally, an inventory, counted physically, should match the one reflected in the LIS
report. If there is a deviation, it is necessary to maintain a buffer stock to take care of the
deviation. A high degree of accuracy always helps minimize the risk element in making a
decision.
• Availability. Operating-level data is frequently required to prepare status reports in
different formats for various management levels in an organization. This information
should be readily available and retrievable. For example, if a customer wants to know
the status of his order, or the management wants information on current inventory levels
to make a commitment to some large client of strategic importance, LIS should be
designed to respond to such queries immediately, as these are based on operating-level
information.
• Timeliness. The addition or subtraction of information should be on a real-time basis.
For example, the delays in customer order registration and order processing will give an
incorrect picture of ‘orders on hand’. The procurement actions initiated on the basis of an
incorrect report will create material shortages in future, particularly for long delivery
 parts. In another case, the material allocations based on old report may create problems
in providing services to the important customer. Updates on information for additions or
deletion should be taken care of before the periodic reports are due for generation. Cut-
off dates for updates may be fixed daily, weekly or monthly, depending on the periodicity
of report generation.
• Flexibility. Flexibility refers to information requirements in the formats needed by the
internal users and the external customers of an organization. Internal users may require
information in one particular format, while the customer who places a very large order for
a greenfield project requires order status reports periodically in different formats to
forward to his bankers, top management, government and so forth. The LIS should be
designed for such flexibility.
• Format. In an organization, decisions are taken at various levels. The degree of
criticality, frequency and impact varies with the authority level making the decision.
Obviously, the format in
which the information is required differs with the authority making the decision. LIS
should be designed to satisfy the information needs of system users in the format of their
choice.
• Interactive. It is not practically possible for human beings to predict all deviations,
particularly when operating-level activities are voluminous. If the safety or reorder levels
of the inventory dangerously deviate from the norms, LIS should bring this to the notice
of the system users by way of generating an exceptional status report. Any deviation,
especially in the case of large orders from strategic clients, should be highlighted to the
concerned users. The exceptional reports help managers to focus on the critical areas of
deviations to take timely corrective actions.

5. PRINCIPLES OF LIS: (TB)

6. TYPES: (TB)
• Warehouse Management Systems (WMS): A comprehensive digital
solution designed for the efficient management of warehousing operations.
WMS streamlines inventory tracking, space allocation, and order fulfilment.
Through integration with various sensors and systems, it offers real-time
insights, the transportation management system enhances productivity by
optimizing storage layouts and facilitates the swift movement of goods using
automated workflows and data analytics.
• Transport Management Systems (TMS): A specialized software
solution aimed at optimizing transportation operations. TMS centralizes
route planning, carrier selection, and freight cost analysis. Integrating
real-time data and analytics facilitates decision-making, minimizes
transportation costs, and ensures timely deliveries through efficient
route optimization and carrier performance evaluations.
• Enterprise Resource Planning (ERP) Systems: An integrated suite of
applications designed to centralize, streamline, and automate business
processes across various departments. ERP systems provide a unified
platform for data management, improving visibility and ensuring
consistent information flow. They aid in coordinating resources, order
 processing, financial management, and supply chain operations,
enhancing operational efficiency and informed decision-making.
• Inventory Management Systems: Digital tools are designed to monitor
and manage stocked goods for sale or production. These systems
provide real-time insights into inventory levels, facilitating the
prediction of stock shortages and surpluses. They aid businesses in
optimizing storage space, reducing carrying costs, and ensuring
products are available when needed, enhancing operational efficiency
and customer satisfaction.

7. MERIT & DEMERIT (TB)

8. LOGISTICAL INFO FUNCTION (TB)
9. INFO TECHNO INFRASTRUCTURE:

INTRO:

• Information technology (IT) infrastructure is the foundation of a

company's technology resources and applications.
• It is made up of hardware, software, networks, facilities, and services
that enable IT operations.
• IT infrastructure includes the following elements: Hardware consists of
servers, computers, routers, switches, and storage systems.
• Software includes operating systems, applications, and problem
management tools.
• Networking comprises routers, switches, and cables.
• It’s the collection of hardware, software, networks, facilities, and related
services that deliver IT operations.
• IT infrastructure components include servers, storage systems,
networking devices, operating systems, databases, and other software
applications.
• IT infrastructure helps companies adapt to market changes and
maintain a competitive edge.
• If an IT infrastructure is flexible, reliable and secure, it can help an
enterprise meet its goals and provide a competitive edge in the market.
Alternatively, if an IT infrastructure isn’t properly implemented,
businesses can face connectivity, productivity and security issues, like
system disruptions and breaches.
• Overall, having a properly implemented infrastructure can be a factor
in whether a business is profitable or not.
 • Some advantages of a well-oiled infrastructure include (but are not
limited to) better customer service, greater employee productivity,
streamlined organization of data centers, and faster, more seamless
delivery of solutions into a market.
• Having a strong information technology infrastructure is beneficial for
business operations because it improves employee productivity and
efficiency as well as helps deliver quality solutions to customers.
• IT infrastructure includes the following elements:
• Hardware consists of servers, computers, routers, switches, and storage systems.
• Software includes operating systems, applications, and problem
management tools.
• Networking comprises routers, switches, and cables.

CHP 14
LOGISTICAL INFRASTRUCTURE
1. INTRO:
• Logistics infrastructure is the foundation of logistics systems, which are
the networks that support the movement of goods, trade, and
commerce. It includes a variety of components, such as:
• Transportation: Modes of transportation like air, rail, road, and sea
• Warehousing: Facilities for storing and moving materials
• Distribution: Centers and terminals for the flow of goods
• Information systems: Data and information management
• Equipment: Materials handling equipment and automated storage
and retrieval systems
• Logistics infrastructure is a critical part of modern
economies, enabling the smooth flow of goods and services
that are essential for trade and growth. It can help to:
• Improve supply chain efficiency
 • Ensure timely deliveries
• Drive trade, productivity, and market expansion
• Improve the competitiveness of businesses
• Logistical infrastructure is the backbone of logistics systems.
• Each element of the logistics infrastructure plays a central role in
strengthening global trade.
• Logistics infrastructure is a combination of various elements that
enable the smooth flow of goods and commodities.
• It is considered the backbone of logistics systems and international
trade.
• Logistical infrastructure is the backbone of logistics systems
MEANING (TB)
DEFINITION (TB)

2. COMPONENTS OF LI: (TB)

3. LI PROBLEMS (TB)
4. MEASURES(TB)
5. LOGISTICAL INFRA FACILITIES (TB)
6. DIFF BW ICD & CFS (TB)

CHP 15
LOGISTICS OUTSOURCING:
1. INTRO:
• Logistics outsourcing is when a company hires a third-party logistics provider
(3PL) to manage all or part of its logistics operations. 3PLs specialize in logistics
functions like warehousing, transportation, inventory management, and
distribution.
• Outsourcing logistics is when a company uses an external provider (aka a
third-party) to handle various supply chain functions.
• These can include a mix of shipping, storing, packing and/or delivering a
company's physical goods, from raw materials all the way to the finished
product.
• These providers, also known as 3PLs, can handle warehousing, inventory
management, fulfillment services, shipping and freight forwarding, and
even reverse logistics.
 • Companies may outsource logistics for a number of reasons, including:
• Cost reduction: Companies can avoid the cost of leasing space,
equipment, insurance, and utilities.
• Efficiency: Companies can focus on their core competencies while the 3PL
manages logistics.
• Flexibility: Companies can scale their operations to meet changes in
demand.
• Access to expertise: Companies can gain access to specialized services
and expertise.
• It is also called “contract logistics” or 3PL logistics, which also means the
involvement of outsourcers to perform logistics functions.
• At that time, outsourcing of logistics included only basic services such as
freight transportation, storage, etc.
• Outsourcing is used by small companies to scale, and by large companies
to maximize process efficiency.
• Companies outsource their logistics operations in order to reduce costs,
improve efficiency, and gain access to specialised services and expertise.
DEFINITION (TB)
MEANING (TB)

2. FEATURES OR CHARACTERISTICS (TB)

3. OBJECTIVES (TB)

4. BENEFITS (TB)

5. DEMERITS (TB)

6. THIRD PARTY LOGISTICS PROVIDER:

INTRO:

• A third-party logistics (3PL) provider is a company that handles a business's

supply chain functions, such as warehousing, shipping, and packing. 3PLs can
provide a range of services, from a single service to a bundle of services that
cover multiple aspects of a supply chain.
• Businesses may outsource supply chain management to a 3PL to gain efficiency,
expertise, or cost savings.
• 3PLs can be integrated into a company's warehousing and transportation
procedures, and can scale and customize services to meet specific needs.
• A third-party logistics company (3PL) is a service provider that either arranges or handles
a variety of supply chain functions for a business.
• These processes include warehouse management, reporting and forecasting, and
transportation of goods
• There are different kinds of 3PL providers and they cater to different kinds of
requirement. Some 3PLs specialize by industry, while the other specializes in specific
areas in logistics.
• However, whatever the area of specialization, a 3PL provider has to manage the supply
chain efficiently.
• 3PLs can handle a variety of supply chain tasks, including:
• Shipping: Picking, packing, and shipping customer orders
• Warehousing: Storing inventory in fulfillment centers
• Inventory management: Managing a company's inventory
• Reverse logistics: Handling returns, refunds, and unwanted inventory
• Customs brokerage: Handling customs-related tasks
• Freight audit: Auditing freight
• Payment: Handling payments
• Shipment tracking: Tracking shipments
• Businesses may outsource their supply chain management to a 3PL to gain efficiency,
expertise, or cost savings.
• 3PLs can help businesses scale their operations to meet demand fluctuations, and they
can also help businesses reach global markets. main services offered by a third-party
logistics provider?
• Types of logistics services can vary widely, and many 3PL businesses specialize in
different parts of the supply chain. In general, most logistics services fall into the
following areas:
• Procurement: Ordering and receiving goods from elsewhere in the supply chain
• Order fulfillment: Receiving orders from customers, picking and packing and arranging
for the orders to be completed and sent out
• Storage: Providing temporary storage for goods in warehouses and similar locations
• Transportation: Arranging for the consolidation, deconsolidation, management and
transportation of goods.

MERITS:
• Cost Savings: The most important advantage of third party logistics companies is that
they can help organizations save on costs. This is possible because a quality 3PL always
remains on the lookout to improve efficiencies, cut costs, and add value to their
customers’ business.With transportation, 3PLs are adept at leveraging their collective
order volumes and frequency to negotiate better rates with carriers. In addition to that,
they can also help save businesses from costly errors, thus building a logistics network
with lower risk and higher returns.
• Access to Expertise: A 3PL company has the necessary knowledge and experience in
transportation, documentation, import and export, customs, international compliance,
and shipping regulations. Additionally, they are also up-to-date with the industry best
 practices and latest developments in logistics and technology. This expertise allows them
to build systems that make the transportation process more efficient and easily
overcome issues.
• Focus on Core Competencies: Outsourcing logistics requirements to a 3PL can provide
any organization with the leeway to focus on core competencies instead of devoting
time and resources to critical but non-core components of the business. Transportation,
especially, can take up large amounts of time, and 3PLs help by providing the resources
and manpower to manage it efficiently. If you are looking for efficient transportation
solutions that can give you more time to focus on the core aspects of your business.

• Scalability: A very important advantage of third party logistics companies is that they
can offer businesses the flexibility and scalability to use resources based on current
business needs. In other words, it is easier to navigate the high and low seasons when
partnering with a 3PL, as they can help you respond to changes in demand swiftly. They
can also scale resources, such as transportation, labor, or space, based on inventory
requirements without added risk or legwork. Moreover, working with a 3PL also allows
businesses to grow in new regions without barriers. Those looking to expand to new
regions – domestically or internationally – benefit from a 3PL’s logistics support and
industry expertise. This reduces expensive delays and cycle times, making the entry into a
new region much smoother.
• Risk Mitigation: Delays are common in the world of supply chain. They can happen
regardless of any amount of preparation and communication with the driver. The
advantage of working with a 3PL here is they have plenty of experience dealing with
delays and damaged products since logistics is their core business. Additionally, being
insured against loss or damaged products allows them to help their clients deal with
unforeseen circumstances straightforwardly.
• Resource Network: Another very important advantage of third party logistics
companies is they have a vast resource network. This, when put to good use, can help
execute every step in the supply chain in the most efficient way. Major 3PLs have a wide
network of interconnected routes that permit them to maximize efficiency while shipping
their clients’ freight. They put this network to good use and have a firm understanding of
alternative routes and solutions when unexpected challenges occur.

• Customer Satisfaction: All the advantages mentioned above boil down to improved
services that directly translate to improved customer satisfaction, which is one of the
most important goals for any business. A quality 3PL can ensure timely pick-ups and
drop-offs of orders, qualified drivers, and ultimately – happy customers. This way,
shippers avoid vendor chargebacks and schedule disruptions, making the transportation
process more efficient.

7. FOURTH PARTY LP:

 INTRO:
• A fourth-party logistics (4PL) provider is a company that manages a
client's entire supply chain and logistics.
• They are also known as lead logistics providers (LLPs).
• A 4PL provider can be a good choice for businesses that are
growing too complex for their in-house team to handle.
• They can help businesses focus on their core operations by making
their supply chains work better and cheaper.
• 4PLs use a variety of technologies, such as artificial intelligence,
advanced analytics, and cloud-based platforms, to streamline
supply chain operations.
• A 4PL logistics provider is a company that specializes in managing the
entire supply chain process.
• They are responsible for coordinating and optimizing all of the activities
and resources involved in delivering products from the point of origin to
the customer's destination.
• A 4PL integrates resources, processes, and technologies to manage an
organisation’s supply chain.

FEATURES (TB)
8. SELECTION PROCESS OF LP: (TB)
9. ISSUES IN SELECTION OF LP (TB)
10. VALUE PROPOSITION:
INTRO:
• A value proposition is a statement that explains the benefits a
product or service provides to a target market, and why customers
should choose it over competitors.
• It's a key component of a company's marketing and sales strategy.
• The value proposition focuses marketing efforts on the unique benefit to
customers.
• This helps focus the offering on the customer and, more specifically, on
the unique value to the customer.
• Also, the value proposition is a message, and the audience is the target
customer.
• value proposition specifies what makes the company’s product or service
attractive, why a customer should purchase it, and how the value of the
product or service is differentiated from similar offerings.
• The proposition takes the form of a short, clear, and concise statement of
the tangible and intangible benefits that will be delivered to customers.
• The perfect proposition must quickly transmit the values to potential
customers without the need for further explanation.
• Each proposition must be unique, as it is a method to communicate the
differentiation points of a company to the target customers.
• proposition provides a company with a method to influence the decision-
making of customers, it is frequently displayed on the company’s
marketing materials, such as a website.
• The value proposition is a powerful tool to drive sales and build
a customer base.
• A value proposition is a statement that explains the benefit of using a
product or service.
• It should be clear, concise, and easy to understand.
• A value proposition is important because it helps potential customers
understand why they should do business with you instead of your
competitors.
• It can also help you stand out from the crowd and increase conversions.
FEATURES: (TB)

BENEFITS:
• Competitive advantage
• A value proposition can help a business differentiate itself from
competitors by clearly communicating what a product does, how it's
relevant to a customer, and why a customer should buy it.
• Customer understanding
• A value proposition can help customers understand the value of a
company's products and services. It can also help customers see how a
company's services benefit them.
• Conversion success
• A value proposition can be a critical factor in conversion success, and can
be the difference between closing or losing a sale.
• Increased quality and quantity of leads
• A value proposition can help customers qualify their requirements with a
company's offering, which can save time in the decision-making process.
• Internal understanding
• Writing a value proposition can help a company understand the
competitive landscape.
• Bottom-line results
• A good value proposition can drive real bottom-line results.
• Customer involvement
• A value proposition canvas can help a company focus on elements that
customers value the most, which can help establish strong customer
involvement.
 • Creates Focus: A robust Value Proposition gives you and your
team focus by identifying the fundamental initiatives, activities and
aspects of your business that will have the greatest impact on
meeting your defined target audience's needs. Your Value
Proposition is your 'True North', focusing you on the who, why and
how you're delivering value. It outlines what you must deliver to
meet your defined audience's needs and create an overall
remarkable experience.
• Breeds Confidence: Having a strong and honed Value Proposition
gives you, your team, and your stakeholders clarity so that you can
progress without questioning and second-guessing your every move...thus
breeding confidence. Referring to the certainty of your 'True North', you
can be assured of the decisions that you make by seeing where and how
you're adding value to your audience. Confidence comes from knowing
that you're making a difference to the people that you're serving, that
you're doing so in a way that's meaningful to them, and that your actions
are aligned to delivering an overall remarkable experience. People want to
feel as though they're valued members of a winning team on an inspired
mission
• Increases Effectiveness of Marketing: The Value
Proposition directs your marketing efforts to concentrate on those
activities that will generate the greatest results. By truly understanding
your desired customers and their core need that you're solving for, you're
able to focus on the channels and vehicles that are most relevant, and will
effectively communicate the benefits and advantages of your solution.An
effective Value Proposition works on many levels; inspiring and guiding
the team internally, as well as providing clarity, confidence and assurance
to prospects and customers.A powerful Value Proposition is THE most
important asset that you will develop, whether you're starting up, pivoting, or
launching a new initiative from within an established business.

• Helps your organisation internally. It enhances your understanding

of the competitive landscape – in order to write a compelling
value proposition, you must first research your competitors and
their offerings in order to differentiate yourself. It also rallies
your teams to focus on working together towards a common
goal.
•
11. DIFF BW THIRD & FOURTH PARTY LOGISTICS: (TB)
 CHP 16
GLOBAL SUPPLY CHAIN:
1. INTRO:
• A global supply chain is a network of companies and individuals
that work together to produce and distribute a product or service
across multiple countries.
• It includes the steps involved in sourcing, manufacturing, and
distributing a product, from the raw materials to the final
consumer.
• Global supply chains can be complex and require careful
management.
• They can be affected by macro-level changes, such as the COVID-19
pandemic, the war in Ukraine, and a lack of lorry drivers.
• These events can lead to shortages, inflation, and other problems.
• Global supply chains can be important for businesses because they
can create efficiencies and cost savings.
• A global supply chain covers all the steps involved in manufacturing
and delivering a product or service when those steps take place in
more than one country.
• For example, if a company sources raw materials in China,
manufactures the product in India and sells it to customers in North
America, its supply chain is global.
• A global supply chain is the worldwide system a business uses to
produce products or services.
• Another benefit is that a global supply chain can make it easier
to sell to customers around the world.
• Global supply chains have become a popular way for companies to
source unique materials and products from other countries because
they're unavailable domestically.
• By doing this, organizations can have a faster turnaround time, gain
better business insights, and build their customer base on a global
scale.
• Learning how global supply chains work can help you make a
company more efficient and profitable by expanding into
international markets.
 • A global supply chain is an international network that businesses
use to produce and transport goods and services across different
markets, spanning multiple countries and continents.
• Key activities in a global supply chain may include material
purchasing, production planning, sales forecasting, and customer
servicing.
• As businesses expand to reach new markets and increase the
number of items they produce, the need for a global supply chain
may increase.
• Global supply chains typically enable companies to enter new
markets and gain international customers.
• Also, they can easily track their shipments, products, and materials
on the supply side.
• It's a complex system that involves coordinating activities like
sourcing, manufacturing, logistics, distribution, and customer
service.
• A global supply chain includes all the steps involved In
manufacturing and delivering a product or service, such as:
Sourcing raw materials, Manufacturing, Distribution,
Communication, Finance, Inventory control, Transportation, and
Logistics management.

DEFINITION: A global supply chain is a network of suppliers,

manufacturers, and distributors that work together to produce and
deliver goods and services across multiple countries and
continents.

MEANING: A global supply chain is a network of people, processes,

technology, and data that connects suppliers, manufacturers,
warehouses, distributors, shippers, and customers across multiple
countries and organizations.

2. FEATURES OF GLOBAL SUPPLY CHAIN: (TB)

3. TYPES (TB)
4. GLOBAL SUPPL CHAIN MANAGEMENT:
1. INTRO:
 • Global supply chain management (GSCM) is the process of
planning how to distribute goods and services from
manufacturers to consumers across multiple countries.
• GSCM involves managing a complex system of suppliers,
manufacturers, warehouses, and retail outlets.
• It's important to consider variables like international
regulations, cultural differences, and economic fluctuations.
• Global supply chain management concerns the management
of sourcing, manufacturing, and distribution that take place
in different countries before a product is sold and delivered
to the final buyers.
• From the view of the focal manufacturing firm, a global
supply chain consists of three key parts: the upstream supply
network, the manufacturing network of plants belonging to
the focal firm, and the downstream distribution network.
• Global supply chain management (GSCM) is the process of
managing the flow of products across the world for a
business or organization.
• It involves planning how goods and services will be
distributed from the manufacturer to the consumer.
• The goal is to provide a high level of customer service while
being cost-efficient.
• It involves coordinating activities with suppliers,
manufacturers, distributors, and retailers in different
countries.

2. MERITS OF GSCM (TB)

3. DEMERITS (TB)
4. FUNCTIONS (TB)
5. MANAGING GLOBAL SC (TB)
6. IMPACT OF GLOBALISATION (TB)
7. GLOBAL LOGI TRENDS (TB)
8. GLOBAL ISSUES & CHALLENGES IN LOGI AND SCM: (TB)
• Increased Competition: During the pandemic, supply chain
companies had an unpleasant awakening of how much they
stand to lose if they are not expanding or utilizing the latest
technologies. Today, the race to expand in other markets and the
 availability of advanced technology is driving up the competition
in the market. More players are in the market, forcing businesses
to offer competitive pricing while improving the quality of their
services and customer experience.
• Higher consumer expectations: During the pandemic, the rise of
next-day delivery services has introduced a behavior change in
customers. When offline stores closed due to lockdown, hyper-
delivery services became popular, and now, even after the
pandemic, most customers expect fast delivery of their orders.
This is why businesses are challenged to manage the rising
delivery cost without charging the customers to retain their
loyalty and satisfaction.
• Shortage of skilled workforce: The supply chain is labor-intensive,
and the skilled workforce shortage remains challenging in 2023.
Younger workers expect a higher work-life balance. Also, many
potential workers don’t consider the supply chain lucrative.
Companies need more skilled workers in critical areas such as
supply chain management, logistics, and operations. The talent
competition is high, and companies must focus on adopting
technology to reduce the labor manual to attract talent.
• Demand forecasting challenges: Unpredictable consumer
behavior and changing marketplace dynamics make it more
challenging to map demand forecasting. Such rapidly changing
consumer preferences, shopping habits, and expectations
significantly impact demand patterns and inventory management.
Businesses have a new supply chain issue to adapt to shifting
consumer behavior and adjust their supply chains to meet these
changes.
• Cybersecurity: Cybersecurity is becoming one of the most
essential aspects of supply chain management. Businesses
adopting technology to optimize their supply chain management
operations should also focus on improving the security of the
systems. Cybersecurity vulnerabilities can compromise sensitive
information, disrupt operations, and lead to delays in production
and distribution.
• Climate change: Climate change is a significant challenge for
supply chain management. Extreme weather events such as
rising sea levels and natural disasters have introduced new
supply chain challenges as disruption of transportation routes,
 infrastructure damage, and impact on production facilities are
causing delays and interruptions in the flow of goods.
• Environmental sustainability: One of the issues in supply chain
management for businesses is effectively adopting eco-friendly
practices, reducing carbon footprints, and adhering to stringent
environmental standards. These changes require supply chain
companies to make significant operational changes with high-
cost implications.
• Increasing costs and material scarcity: The supply chain requires
a lot of raw materials and resources. The environmental concerns,
geopolitical tensions, and trade disruptions in 2023 are causing
severe fluctuations in commodity prices and a shortage of raw
materials. Businesses need help with increased production costs,
which also affects product availability.
• Transparency and traceability: For many years, regulators and
consumers have wanted transparency to know about the origin of
products, ensure ethical sourcing and traceability of
environmental impact. Transparency and traceability remain the
current supply chain issues; to meet these requirements while
maintaining a competitive edge, companies must invest in
technology solutions that enable end-to-end visibility and real-
time traceability in the supply chains.
• Costing and budgeting: Rising inflation, geopolitical changes, and
rising competition continuously increase operating costs for
supply chain companies. Increasing fuel and energy prices and
strict regulations around environmental regulations are raising
input costs for companies. However, customers expect faster
delivery at a lower cost, decreasing company revenue.