By Grainger Editorial Staff 4/25/23
In recent years, managing supply chain risk has been a major focus for businesses. COVID lockdowns and shipping bottlenecks disrupted operations in almost every industry, forcing companies to rethink their supply chain’s resilience. Then throughout 2022, inflation introduced new uncertainty into inventory management.
To understand how inventory managers are adapting to the changing economic landscape, Grainger surveyed 300 supply chain professionals. Respondents were decision-makers responsible for MRO purchasing. They worked for manufacturers, retailers, government offices and healthcare providers of all sizes. The survey, conducted in October 2022, asked respondents to describe the condition of their supply chains, identify changes in their operations, describe their department’s 12-month outlook and share their thoughts on new technologies that are reshaping the field. You can read the full report here.
The survey revealed that today's inflationary environment (up 4.7% in January 2023 compared to a year prior) and recessionary risks dominated respondents’ concerns in 2022, although backordered products and persistent shipping delays are still causing problems. To meet these challenges, inventory managers are adding suppliers and expanding buffer inventories for critical products. Respondents anticipate using real-time inventory data and logistics solutions to better manage supply chain risks in the coming year.
Rising prices were the top issue facing every business sector in 2022, with almost 80% of respondents naming inflation as their chief supply chain risk. Fears of a recession were also widespread, becoming the second-most commonly cited supply chain risk (cited by 46% of respondents) across every industry. Businesses with extra-large MRO budgets were somewhat less likely to name inflation or recession as a major risk, but they were more likely to cite cybersecurity as a top challenge.
It is interesting to note that while 80% of respondents are worried about inflationary risks, only 20% are struggling to keep their MRO spend within budget. Similarly, while 46% of respondents are concerned the economy will soon tip into recession, 72% believe that their own businesses will see rising demand this year. This implies that most inventory managers have been able to adapt to higher prices and have yet to see the signs of an economic downturn in their own operations.
When asked about the changes they see coming in 2023, most inventory managers cited the potential for innovative data science to boost supply chain efficiency and reliability. A majority of respondents intend to make better use of real-time inventory data (59%) and logistics (53%) in their operations. Other data analysis and collection technologies, such as machine learning (26%), cloud services (35%), and the Internet of Things (21%) were frequently mentioned as drivers of change in the industry.
61% of Respondents said their organization would need to embrace a continuing education program to help workers keep pace with new technologies.
37% of Inventory Managers are searching for workers with advanced accreditation.
34% of Inventory Managers are changing recruiting practices to attract new talent.
While inventory managers are seeing the potential in emerging technologies, they also understand that the workforce of the future will need to learn new skills to keep up. Fifty-three percent of respondents believed that workers would need to adopt an entirely new skill set, with a majority of respondents in every sector seeing the need for a workforce skilled in logistics (57%) and programming (51%).
The information contained in this article is intended for general information purposes only and is based on information available as of the initial date of publication. No representation is made that the information or references are complete or remain current. This article is not a substitute for review of current applicable government regulations, industry standards, or other standards specific to your business and/or activities and should not be construed as legal advice or opinion. Readers with specific questions should refer to the applicable standards or consult with an attorney.