1、SUPPLY CHAIN&PROCUREMENT2023OUTLOOK27Conclusion02Executive Summary01Introduction28Notes03Global Business and Macroeconomic Trends for 2023Inflation:At a Multidecadal High in Major EconomiesSlowing GDP Growth in Most EconomiesEnergy:A Deepening CrisisInterest Rates:Taming Inflation at the Cost of Gro

2、wthLabor:Shortage and Higher Wages To See Correction11Seven Leadership Themes for 2023The Rise of the Corporate CitizenSpeak Softly and Carry a Big Supply ChainDelivering ESG Outcomes Through Supply Chain OperationsCultivate a Digital-First Supply ChainLeading Through Inflation:Think Outside the Box

3、 for SuccessRethink Supply Chain and Procurement Metrics To Drive ValueRemote Working:An Opportunity To Attract Diverse Talent and Catalyze DEI Goals01Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATIONINTRODUCTION A Concerning OutlookIt needs little reminding that 2020,2021

4、 and 2022 have been a terrible trio.Blow after blow landed on humanity:the COVID-19 pandemic,political instability in G7 countries,environmental catastrophe,shocks in the energy markets,trade wars between major markets and much more.One could be forgiven for feeling that better times were ahead.For

5、all those speaking of a“post-pandemic”world or a“new normal,”surely 2023 would be the return of calmer,happier times.While the saying goes that bad things come in threes,keep in mind that there were four horsemen of the apocalypse.The outlook for 2023 is framed by a fearsome barrage of concerns.The

6、threat of a nuclear winter looms uncomfortably due to statements by the Russian military and political leadership.Economies are facing recessions,business slowdown and other uncertainties.Extreme weather continues to decimate portions of the planet.Borrowing costs have risen sharply,impairing both t

7、he developing world and healthy economies.Supply chains,although no longer broken,often remain bent.But leading firms are getting used to this.They arent being knocked off their balance like they were in the unfolding of the global pandemic.They have become more resilient and more focused on custome

8、rs.They have slashed costs and reprioritized investments.In 2023,leaders in supply chain and procurement stand ready to break out.They will drive their operations forward and into the unknown.With 22 years of experience managing over$300 billion in spend annually for leading Fortune 500 and Global 2

9、000 businesses,GEPs accomplished consultants and technology advisors offer perspective to help business leaders chart a successful 2023.The GEP Outlook 2023:Supply Chain and Procurement report synthesizes the priorities that will dominate the boardroom this year and beyond.02Back to ContentsSUPPLY C

10、HAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATIONEXECUTIVE SUMMARY The story of 2023 will likely be dominated by macrotrends that were already present in 2022.Inflation is at multidecadal highs across economies.GDP growth is slowing,and the overall growth story is worse than 2022.Energy costs rem

11、ain distorted due to a combination of war,political tensions,environmental concerns and supply chain challenges.Interest rates are at the highest levels in recent years.Currency values are still out of sync of recent norms.And though most labor markets are in historically low unemployment ranges,the

12、 markets are softening.Supply Chains Will Be Wielded To Improve the Collective GoodCentral banks and G7 economies have less capacity to intervene in the global economy,having spent heavily in the preceding years on stabilizing the global economy through the COVID-19 pandemic.This is an opportunity f

13、or global corporations to step up and drive positive outcomes for society,and,increasingly,people expect them to.Just like the supply chain blockade in support of Ukraine following the Russian invasion,corporate citizens found confidence in their ability to defend their corporate values by expressin

14、g their sentiment through the deployment of their supply chains.Supply chain and procurement leaders will truly lead the way in 2023,allocating these supply costs,material and supply flows,and supplier networks increasingly with the greater societal good in mind.ESG Outcomes Are Closer in SightLong

15、have companies faced pressure to make good on environmental,social and governance(ESG)commitments.Although most firms have already made bold public commitments,actualizing all but the easiest-to-achieve items has been problematic for many.In 2023,leaders will be emboldened to use data-driven approac

16、hes to operationalize their targets.They will embed these methods into meaningful policy action and link these to their supplier outreaches.They will activate the purchasing engine to shift spend dollars into the most productive channels.The Journey to Digital Continues at a Faster PaceAfter many ye

17、ars of strategy,visioning and perhaps just talk,leading firms are ready for real investment in digital supply chain and procurement transformation.03Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATIONThis drive toward investment is arriving just in time.As inflation weighs o

18、n cost of goods sold(COGS)and selling,general&administrative(SG&A)costs,the capabilities that digital solutions provide will be differentiators to stay a step or two ahead of the competition.New Requirements With New MetricsAfter the stress of recent years,it would be unrealistic to have the same me

19、trics for supply chain and procurement.Yet,many firms have not yet shifted to new scorecards.But leaders are already a step ahead,tracking a wide range of new and comprehensive metrics.They are also finding ways to advance their teams and talent pipeline.Remote work has enabled multiple staffing mod

20、els,enabling firms to make much faster strides toward diversity and inclusion goals.GLOBAL BUSINESS AND MACROECONOMIC TRENDS FOR 2023 After a tumultuous three years,supply chains are still unlikely to return to complete normalcy in 2023.Continuing materials and labor shortages,skewed demand-supply,g

21、eopolitical concerns in Russia and Ukraine and escalations between Taiwan and China,and the U.S.-China trade war currently look like even bigger threats to supply chains than fresh waves of COVID-19.The macroeconomic situation points to major future challenges,with early signs of recession visible a

22、cross several economies.Elevated energy costs,sustained inflation,further interest rate hikes in attempts to arrest inflation,and pressure on industrial outputs will all be strong influences in the new year.Inflation:At a Multidecadal High in Major Economies Macroeconomic events of the last two to t

23、hree years combined to create high inflation in both developed and developing economies in 2022.Inflation has been on the rise since 2021,and the Russia-Ukraine war worsened it,pushing figures to historical highs across economies due to higher input costs and supply chain concerns.The steep rise has

24、 prompted intervention from central banks across the globe,but inflation has remained stubbornly high.04Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATIONProjectionsCountry/Regional Classification202020224World3.234.708.756.524.13Advanced Economies0.683.117.224.3

25、82.38 United States1.244.688.053.502.23 Euro Area0.252.598.315.742.74Major Advanced Economies(G7)0.803.337.254.272.33Emerging and Developing Asia3.132.214.063.632.79 ASEAN-51.361.954.704.362.84 China2.390.852.162.241.86 India6.175.506.885.144.35 Middle East and Central Asia10.4512.9313.7713.068.86La

26、tin America and the Caribbean6.409.7914.0611.458.05Sub-Saharan Africa10.1911.0714.4411.878.57Source:World Economic Outlook,Oct 2022,IMFIn the United States,inflation is expected to average 8.1%in 2022 and soften to 3.5%in 2023,while in the euro area,it is expected to reach 8.3%in 2022 and slip to 5.

27、7%in 2023(see table below)still significantly higher than pre-pandemic levels.The trend is expected to be similar in other geographies as well,with an exception in China,inflation in 2023 is expected to be slightly higher than 2022 because of continuing pandemic-linked lockdowns in cities and the re

28、al estate crisis.Inflation Trends:Annual Percentage Change(Historic and Projected)05Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATION Slowing GDP Growth in Most Economies Economic growth engines were recovering in 2021 after contractions in 2020.However,as demand from vari

29、ous sectors approached pre-pandemic levels,supply chains struggled to keep pace,leading to high price commodity cycles in various sectors.It was expected that 2022 would restore equilibrium,but the Russia-Ukraine conflict has renewed the cycle of uncertainty and commodity price volatility as well as

30、 distorted supply chains.The result:rising energy costs,steep inflation,and high interest rates,which are collectively leading to a demand slump in various industries.In 2023,the global GDP is projected to increase by just 2.66%compared to an estimated growth of 3.19%in 2022.Most economies are expec

31、ted to see a slowdown,impacted by issues that have spilled over from this year.The euro area and G7 economies will see less than 1%growth in GDP in fact,a few early quarters may see a contraction.Chinas economy,however,could move against this trend and revive as the pandemic recedes and restrictions

32、 ease,resulting in higher industrial output growth.Source:GEPInfluencing Factors for 2023Economic slowdownUnemployment rates anddownward wage correctionAny upward risk inenergy security due toLNG supplies concern andOPEC+production decisionDepreciating currenciesagainst dollar06Back to ContentsSUPPL

33、Y CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATIONProjectionsCountry/Regional Classification202020224World-2.956.023.192.663.18Advanced Economies-4.405.202.431.111.60 United States-3.405.671.640.991.20 Euro Area-6.095.243.060.501.79Major Advanced Economies(G7)-4.785.062.030.811.26Eme

34、rging and Developing Asia-0.627.184.394.875.21 ASEAN-5-3.403.355.324.885.29 China2.248.083.204.444.49 India -6.598.686.846.056.81 Middle East and Central Asia-2.704.494.953.613.54Latin America and the Caribbean-6.996.903.471.742.36Sub-Saharan Africa-1.654.703.583.714.08Source:World Economic Outlook,

35、Oct 2022,IMFGDP Growth:Annual Percentage Change(Historic and Projected)Source:GEPInfluencing Factors for 2023Lockdowns inChina againGeopoliticalissues inChina-TaiwanEscalations inRussia-UkrainewarIncreasedenergy costsand insecurityU.S.-Chinatrade war07Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK

36、 2023INSIGHTDRIVESINNOVATION Energy:A Deepening Crisis Energy prices will be among those that have the strongest influence on the economy,and a steep rise could worsen inflation,increase food insecurity and slow global growth,pushing economies into recession in 2023.After a dip in 2020,crude oil and

37、 natural gas/liquid natural gas(LNG)prices rose in the second half of 2021 due to supply constraints.Oil averaged$68/bbl in 2021 and is on target to jump 47%to reach$100/bbl by late 2022.Considering the oil futures price and the evolving market scenario,oil prices are expected to slightly moderate t

38、o$85-$90/bbl in 2023.LNG prices also jumped to$18/mmbtu in 2021 from the lows of$4.7/mmbtu in 2020.LNG prices are on target to average$35/mmbtu for 2022,a year-over-year increase of over 90%.58075Q1Q2Q3Q42020202120222023ProductionConsumptionCrude Oil Production and Consumption Forecast(in

39、 Million Barrels Per Day)Source:EIA,GEP AnalysisQ1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Forecast periodSome of the major developed economies are already feeling the pinch,which is reflected in the demand slump and declining global trades;other developed and developing economies will not be immune to these headwinds

40、 in 2023.08Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATIONGoing forward,LNG prices are expected to stay elevated due to supply constraints,uncertainty over the Nord Stream 2 pipeline and fewer projects in pre-FID(Final Investment Decision)stage.On the other hand,Chinas d

41、eclining LNG imports have ensured less acute global energy shortages,and this trend is expected to continue into 2023.Interest Rates:Taming Inflation at the Cost of Growth After years of declining global interest rates,many central banks reversed course in 2022 to counter spiraling inflation.However

42、,the combined impact of supply shortages in energy,food and labor are overweighing all corrective fiscal measures.Interest rates are expected to rise in 2023,but the hikes are not expected to be as high and frequent as they were in 2022 due to fears of economic slowdown and recession.The U.S.Federal

43、 Reserve is expected to raise interest rates to 5%in a phased manner by March 2023,which would be a cumulative increase of 100 basis points from 4%in November 2022.The European Central Bank is expected to increase rates by 75 basis points in December 2022,and there could be more hikes in 2023 depend

44、ing on inflation and other influencing factors such as energy costs.Source:GEPInfluencing Factors for 2023OPEC+decision on production cutsGeopolitical stability in oil&gas producing countriesRecession and its impact on end-use industriesSwitchover of fuel from gas to oilOperationality of Nord Stream

45、 2 pipeline09Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATIONThe cost of capital,however,has increased,and with more interest hikes expected,there will be an impact on borrowing cost and economic growth,resulting in a demand slump and postponement of capital expenditure p

46、lans.Labor:Shortage and Higher Wages to See CorrectionUnemployment rates improved to pre-pandemic levels across almost all geographies in 2022.A high demand for labor,the Great Resignation and pandemic-linked movement restrictions kept wage rates high,especially for skilled labor,and employees have

47、enjoyed higher compensation,more benefits and work flexibility.Unemployment rates in the U.S.touched a historically low level of 3.5%in September 2022.Overall,it is expected to average at 3.7%for 2022,down from an average of 5.3%in 2021.The U.K.and the euro area will also see unemployment rates fall

48、 from 4.5%and 7.7%in 2021 to 3.8%and 6.8%,respectively,in 2022.7.04.52.0-0.520192020JapanUSUKIndiaEuro AreaLong-Term Interest Annual Rates:Trends and ForecastLong-Term Interest Rates Forecaston Quarterly BasisSource:OECD202120222023Q32022Q12023Q42022Q22023Q32023Q420230.232.073.201.72JapanUKUSEuro Ar

49、ea0.232.143.401.820.232.183.501.920.232.623.602.020.232.623.802.070.232.623.802.1210Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATIONProjectedCountry/Regional Classification202020224Advanced Economies6.605.604.544.955.22 United States8.095.353.674.555.42 Euro Ar

50、ea7.977.736.827.036.93Major Advanced Economies(G7)6.475.204.124.685.07Other Advanced Economies(excluding G7 and Euro Area)4.664.353.603.723.77Source:World Economic Outlook,Oct 2022,IMFUnemployment Rate Trends:Annual Percentage Change(Historic and Projected)Source:GEPInfluencing Factors for 2023Highe

51、r unemployment rates and downward wage correctionsEconomicslowdownTrade warsDecline ingovernmentspendingWhile major Asian countries will also see a decline in unemployment rates,Chinas rate is expected to rise from 3.9%in 2021 to 4.2%for 2022 due to weakened economic activities owing to the pandemic

52、.However,the labor situation is already weakening in some markets such as the U.S.and,in 2023,all economies will see increased unemployment rates due to lower industrial outputs and a global economic slowdown/recession.11Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATIONSEV

53、EN LEADERSHIP THEMES FOR 20231|The Rise of the Corporate Citizen Governments and central banks have empty pockets and look less capable of responding to major challenges in 2023.Most nations are limping into the new year pulled down by recent disruptions.Economic prospects,especially of the wealthy

54、G7 markets,look dimmer than usual.The International Monetary Fund argues in its World Economic Outlook that global growth is forecast to slow,from 6%in 2021 to 3.2%in 2022 and 2.7%in 2023 the weakest rate since 2001,except during the global financial crisis and the acute phase of the pandemic.1From

55、falling currency values,political instability and more,each economy is dealing with a unique set of challenges.This period of difficulty isnt over,either;China,for example,continues to deploy strict lockdown protocols to stamp out COVID-19 at the expense of economic growth.Fiscal stimulus programs t

56、o mitigate or overcome these challenges are tried-and-tested strategies that may not be possible for many in 2023.Most countries have already spent large sums over the past few years while debt was at historically low levels.Now that interest rates have risen sharply and are expected to rise further

57、,handing out stimulus packages becomes increasingly challenging.Employees Trust Their Business Leaders To Take Steps Forward Leading global firms are increasingly expected to be corporate citizens,espousing values that adhere to legal,ethical and societal standards.Employees generally trust their em

58、ployer to make a difference in the world and to be in alignment with their values.The 2022 Edelman Trust Barometer found that employees would trust their CEO substantially more than their fellow citizens,journalists and politicians.2 Another survey,by Qualtrics,found that over half of U.S.employees(

59、54%)would be willing to take a pay cut to work in an organization with better values,and even more 56%wouldnt consider a job in a company that has values they oppose.3Investors,Too,Are Backing“Corporate Citizens”This isnt just employee sentiment.“The size of the impact investing market the total ass

60、ets under management that aim to generate positive social or environmental effects in addition to financial gains amounted to US$1.164 trillion worldwide,”according to a report by the Global Impact Investing Network.412Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATIONSuppl

61、y Chain and Procurement Can Galvanize the Business EnterpriseMany operations leaders are making social procurement the practice of allocating COGS and SG&A activities to firms that are fully focused on delivering a positive impact in communities a top priority,and GEP anticipates that this will beco

62、me a major focus area for leading firms in 2023.Social procurement is,in many ways,perfect for supply chain and procurement leaders,securing goods and services from suppliers who help amplify the corporate values and vision of their company.Another area is through peer group partnerships and allianc

63、es,which is rapidly gaining traction.Help from governments and banks may not be coming,but supply chain and procurement leaders are ready to lead the way for corporate values in 2023.These leaders hold tremendous sway over COGS and SG&A activities,and will increasingly redirect larger amounts of the

64、se funds toward suppliers,causes and alliances that achieve their companys values and satisfy employees while doing so.Sustainable Procurement Pledge:A nonprofit driving awareness and knowledge on responsible sourcing practices and empowering people in procurement.Partners with procurement professio

65、nals,academics,and practitioners.Semiconductor Climate Consortium:A group formed by companies across the semiconductor value chain to accelerate reduction of greenhouse emissions.Partners include Google,Intel,Microsoft,DuPont,and Nikon.Corporate Coalition for Innovation&Technology Toward Net Zero:Cr

66、oss-sector business alliance helping countries meet decarbonization and climate change goals.An alliance of Bechtel,GE,GM,Honeywell,Invenergy,and Johnson Controls.Business for Nature:A global group of business and finance organizations working toward mandatory corporate disclosure of impact and depe

67、ndencies on nature by 2030.Partners include World Economic Forum,WWF,and University of Cambridge.Buy Social Corporate Challenge:A cross-industry initiative to collectively spend 1 billion with social enterprises through their procurement by helping large businesses engage with innovative suppliers a

68、nd embed sustainability and diversity into core operations.Partners include Deloitte,Johnson&Johnson,Nestle,and Siemens.How Businesses Are Driving Change Through Peer PartnershipsCompiled by GEP13Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATION2|Speak Softly and Carry a B

69、ig Supply Chain Recent calamities have exposed the frightening effect of disrupted supply chains,as hardly any were immune to the shocks and challenges of the past few years.For many business executives,supply chain strategy became a priority risk area and remains a critical business transformation

70、imperative.But supply chains showed something more in 2022,something that leading firms will unleash in a bigger way in 2023:supply chains have immense potential to be wielded for good.A Global OutrageIn February 2022,Vladmir Putin ordered the invasion of Ukraine,catching many governments by surpris

71、e.Prior to this invasion,direct military action between large militaries was hard to fathom.In almost every conceivable scenario,the downsides of and destruction from military conflict clearly outweigh the gains.This notion may have emboldened Vladimir Putin and Russia,who can safely be said to have

72、 thought that the risk of direct military reaction from NATO or other militaries was low.The course of the war has brought death,suffering,economic damage and much more on both sides.And then an unexpected actor entered the fight.This actor doesnt fire a bullet or detonate a bomb,yet arguably does m

73、ore damage than perhaps all the wars actors combined.The Weapon Is Supply Chain A large global and consensus-building resistance to Russias invasion emerged,led unpredictably by corporations.They squared up to the leader of one of the largest nuclear-equipped militaries and defended their corporate

74、values while managing to deliver a blow where it could have the most painful impact:Russias supply chain.These firms pulled products from stores,closed retail outlets,restricted transportation,limited transportation insurance,denied raw materials for manufacturing and much more.This wasnt simply a h

75、andful of ESG-conscious firms over 150 of the largest 200 companies withdrew operations from Russia.5 133+Leaving Russia:Global Corporations That Took a StanceExit Completed(Firms that sold business/assets or part of business to local partner and left the market)416+Withdrawing Operations(Firms that

76、 are completely halting Russian engagements or are exiting Russia)711+Suspending Operations(Businesses temporarily curtailing operations)*Data as of Nov 10,202214Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATIONThe bold action of these large global firms was unprecedented.

77、While nations have traditionally imposed predictable measures such as economic sanctions,shipping blockades and other political censures,the rapid and huge response from the private sector was not forecasted.Instigators of future conflicts must now carefully weigh the effect of this group and the st

78、rength it can wield at a lightning-strike notice.Empowering Supply Chain Action for the FutureSupply chains,and especially the intricate global linkages throughout,have arguably become weapons.Corporations can exert this power to discourage damaging behavior from concerning parties or to encourage a

79、ctivities that can positively affect our society.If supply chains can be used to hobble the operations and economies of nuclear powers,imagine the potential good that can be accomplished if leaders deploy their supply chains to tackle priorities aligned with their corporate values if this cooperativ

80、e action can be catalyzed to progress onto noble,collective good causes.For 2023,many issues loom large.Extraordinary progress can be made toward removing slave labor from the supply chain.To reduce packaging and waste in the supply chain.To improve the climate footprint of business operations.It is

81、 within supply chains grasp.Building on the effective action taken in response to Russias invasion,supply chain leaders will take bolder steps to advance their corporate aspirations in 2023.THERESPONSIBLESUPPLYCHAINALIGN WITH AND DEFENDCORPORATE VALUESDRIVE ACTION FORPOSITIVE CHANGEREDUCECARBON FOOT

82、PRINTENSURE WORKER SAFETYIN UPSTREAM SUPPLY CHAINSource:GEP15Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATION3|Delivering ESG Outcomes Through Supply Chain Operations ESG issues are now at the center of organizations long-term strategic visions.Facing shareholder and publ

83、ic pressure,companies are setting ambitious emissions targets as well as committing to increasing supplier diversity and improving working conditions across supply chain operations.However,businesses are finding it challenging to convert goals into action,as the effort to deliver ESG outcomes impact

84、s every supply chain function from upstream product design,sourcing and procurement to downstream inventory management and distribution.Furthermore,to make a meaningful difference,companies must look beyond internal operations and examine suppliers and partners.Supply chain leaders that are ahead of

85、 the curve in meeting this challenge are:1.Taking a Data-Driven Approach To Operationalize ESG TargetsIntegrating sustainability goals into supply chain operations must be a data-driven exercise.Leaders need a comprehensive understanding of baseline data across the value chain in terms of current-st

86、ate emissions,supplier diversity,and working conditions to set targets and track KPIs.They can use this data to identify easy wins and build momentum before addressing the larger,longer-term sustainability gaps.Firms also need to understand data from their Tier 1 suppliers,third-party manufacturers

87、and logistics providers as well as take a long-term view of government/regulatory benchmarks(such as minimum wage)across their operational footprint.This is a huge undertaking,but companies have been successful accelerating data exchange through third-party data providers.Leaders should prioritize c

88、ollaboration and data sharing to improve interorganizational outcomes.2.Emphasizing Shared Business Practices With Partners Through Policy The largest opportunities lie outside a firms direct control scope 3 emissions(emissions not produced by the company but occurring in its value chain)typically r

89、epresent around 70%of total emissions,depending on the industry.6 Similarly,wages,working conditions and diversity cannot be meaningfully addressed without examining the supplier base.Therefore,operationalizing ESG targets needs to be outward-looking.16Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOO

90、K 2023INSIGHTDRIVESINNOVATIONProportion of procurement functions on track to meet emissions targets(%of respondents)Scope 3 emissions targetsYesScope 1 and 2 emissions targetsNoDont knowN/A23.695512.414.323.138.424.2The Challenge of Scope 3 Emissions ReductionSource:CPO Compass 2023,based on a surve

91、y conducted in August 2022 of 106 CPOs or their equivalents from different organizations,industries and geographies.Survey findings supplemented with interviews with CPOs,advisors and researchTo address scope 3 emissions,leaders should look beyond just a supplier code of conduct and implement sustai

92、nable procurement policies,including contract clauses with sustainability criteria and walking away from partners that dont comply.Additionally,procurement can address diversity,equity and inclusion targets by establishing diversity criteria for Tier 1 and 2 suppliers and increasing expenditure with

93、 partners that meet set requirements.3.Leveraging Center-Led Buying Power To Influence Supplier Sustainability Procurement should lead the charge toward sustainability,as it represents the most leverage an organization has with its supplier base.Center-led procurement can shape the entire supply cha

94、in operation by deciding which suppliers to spend with,how much to spend and under what terms.Firms can use this leverage to influence suppliers to add sustainability clauses,carbon pricing,emissions caps and more to contracts.17Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOV

95、ATION4.Enabling ESG Through Digitalization Digital-first supply chains can drive ESG goals more effectively.Digital tools supplement a data-driven approach by enabling visibility into ESG KPIs and providing auditable insights in targets and outcomes.The right technology can guide stakeholders toward

96、 suppliers with shared business practices.An integrated digital platform can embed purchasing criteria into the procurement process,leveraging buying power to advance ESG.Organizations recognize the publics growing impatience with the long journey to sustainability.Leaders will face the challenge of

97、 meeting ESG targets head-on and start to act on their promises through supply chain operations.4|Cultivate a Digital-First Supply ChainDigital transformation has shifted to the forefront for supply chain leaders in recent years.With investment in digitalization forecasted to grow 16.5%(up to$6.3 tr

98、illion)over the next two years,7 business leaders will need to prioritize digital strategies to stay competitive in 2023.Digital-first supply chains are more flexible and responsive to external shocks.As the available technology matures and AI,IoT and cloud service capabilities grow,digital tools wi

99、ll not only set companies apart from competition but also become a must-have for long-term resilience.Leaders seeking to successfully build a digital-first supply chain are focusing on achieving end-to-end integration and visibility both upstream and downstream in the supply chain.18Back to Contents

100、SUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATIONReal-time data visibility and access to streamline communication and data-sharing for improved decision-makingAdvanced predictive analytics to drive forward-looking data analysis,track supplier performance,inform category strategies and cap

101、ture benefitsBuilt-in agility through cloud technology,centrally hosted operations and automation to reduce reaction time and resource dependency,increase compliance and improve supplier managementAutomated workflow orchestration to establish standard processes,improve data management,customize supp

102、lier relationship management approaches and reduce laborCollaboration across the value chain to improve responsiveness to customer needs and drive operational efficienciesSelecting the right digital tools is now a top priority for forward-looking companies.Data is key for supply chainresilience and

103、leaders should look for digital solutions that provide:What To Look For in Digital SolutionsSource:GEPWhile traditional operational excellence programs are dependent on many moving parts data selection,multiple data streams and platforms,connecting data to the right people,etc.digitalization provide

104、s a single source of truth and will empower leaders to take a data-driven approach to challenges,resulting in more proactive,timely and efficient decision-making.While software selection can be straightforward,implementation is a different story.Sustaining new capabilities,maintaining adoption rates

105、,retaining skilled talent and using data as effectively as possible are necessary to ensure program success and longevity.19Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATIONWhen cultivating an enterprise-wide digital-first mindset,its critical that leaders invest time to u

106、nderstand how digitalization will uniquely affect their firm.They need to consider the maturity and scale of their organization and impact on peoples day-to-day roles and responsibilities.A digital-first culture prioritizes awareness of new tools and encourages collaboration and feedback to suppleme

107、nt software upgrades for continuous improvement.A successful digital transformation requires well-defined milestones and processes supported by communication and training.A solution that intuitively solves problems relevant to stakeholders sees higher adoption.Proper team selection for implementatio

108、n and governance not only enables digital deployment but also ensures talent retention.The pandemic,conflicts,inflation and recession have elevated the importance of supply chain resilience.Digitalization allows companies to be proactive rather than reactive to macroeconomic shocks.The year ahead wi

109、ll see a further rise in digital investment driven by IoT,cloud services and AI.Businesses that choose not to cultivate digital-first supply chains may get left behind.No current plans for data85.26.95.92(%of respondents)Approaches to Data in 2023Introduce data use for the first timeMaintain current

110、 levels of data useExpand the use of dataSource:CPO Compass 2023,based on a survey conducted in August 2022 of 106 CPOs or their equivalents from different organizations,industries and geographies.Survey findings supplemented with interviews with CPOs,advisors and research20Back to ContentsSUPPLY CH

111、AIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATION5|Leading Through Inflation:Think Outside the Box for Success To stay ahead of inflation,supply chain and procurement leaders will embrace a holistic approach to value identification and capture in 2023.While well-timed bids and negotiations can yie

112、ld benefits,most of the opportunities will come from reviewing the entire value chain and identifying areas for improvement.Leaders and organizations will need to be nimble,innovative and,at times,daring.Data Visibility a Key EnablerIn a rapidly changing environment,data visibility enables strong pe

113、rformance.Leading supply chain technology creates a holistic view of a companys requirements,stock,supply options and risks.It also allows for real-time collaboration with suppliers to balance needs with capacity and price.This transparent approach empowers suppliers to forecast customer requirement

114、s and enter into guaranteed purchase agreements,reducing the need to buy at spot market prices or secure new last-minute sources.It also enables better planning for capacity utilization and labor requirements.The result is lower cost and lower supply risk.Digital Platforms Key to Supply Chain Resili

115、enceSource:Economist Impact survey of 400 executives across different industries in Europe and the U.S.Already deployedPlanned in next 1 to 3 yearsNot planned to be deployedN/AEnergy and UtilitiesHealth Care and PharmaceuticalsConsumer Goods and RetailManufacturing,Media and TelecomAgriculture and F

116、ood020406080 9514621Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATIONLesser-Used Strategies Will Be More Effective Supply chain and procurement leaders will need to embrace a broad range of strategies to combat inflation.In 2022,companies that adopted

117、 a holistic approach were able to hold input costs flat while others saw steep increases.As many large firms used their leverage to delay cost increases from suppliers in 2022,realized cost increases are expected to lag market indices.This suggests that 2023 will be a year of high input cost pressur

118、e even if inflation moderates.Labor costsRaw materials costEnvironmental regulationsShipping and logistics bottlenecksCOVID-19 pandemicLabor/talent shortagesFluctuating customer demandsSupplier insolvency/bankruptcyClimate-related natural phenomenaPolitical risks(instability,corruption,conflicts)Cur

119、rency exchange rate volatilityCyberattacks/data breachesTrade protectionismInsufficient infrastructureUS-China trade warBrexit42%40%39%39%39%36%36%35%34%34%34%34%33%33%25%23%Q.How do you expect the following to have a disruptive impact on your organization supply chain in 2022?Labor and Raw Material

120、s Costs a Major Business ConcernSource:Economist Impact-GEP 2022 State of Global Supply Chains Study 400 business leaders across different industriesin Europe and North America surveyedWhile strategies such as should-cost-modeling and benchmarking remain important,some lesser-used strategies will be

121、 particularly impactful in the year ahead.22Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATIONReuse and Reduce:Companies should review consumable components in production,packaging and operations to identify items that can either be used longer or refurbished.Reusing compon

122、ents will also help drive a companys sustainability goals.Examples:Clean and reuse components such as robotic paint shields instead of replacing them Reassess and extend where possible the operation lifetime of components such as racks utilized in internal storage and manufacturingPrequalify Multipl

123、e Components:Companies know any supply disruption of critical inputs can affect operations.One step being taken to mitigate supply risk is expansion of the supplier base,which brings redundancy and increases competition.Businesses should also look at prequalifying more than one component for product

124、ion identifying alternative components that work just as effectively.This flexibility further increases the ability to acquire the required volume from multiple suppliers and may identify lower cost alternatives that still meet functional requirements.Examples:Create product flexibility to utilize m

125、ultiple chipsets for the same function within the system Test and qualify multiple lubricants to ensure safety in operating equipmentThe abovementioned strategies critical in managing inflation rely on the following two key foundations:Business PartneringBusiness stakeholders and supply chain/procur

126、ement must collaborate more closely and transparently than ever.The more visibility business partners can provide,the better supply chain and procurement can address supply needs and optimize costs.In return,supply chain and procurement should provide forecasts of supply risks and cost impacts that

127、can be built into business operating models.Governance Robust governance will be necessary to keep key parties focused on the right priorities and to ensure well-intended strategies are implemented.Supply chain and procurement professionals must play a key role in governance,increasing their collabo

128、ration with business partners and driving as much value as possible.23Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATION6|Rethink Supply Chain and Procurement Metrics To Drive Value To adapt effectively to current macroeconomic,industry and market trends,supply chain and pr

129、ocurement leaders are evaluating the methodology and impact of the metrics established in their organization.Revising metrics will translate into higher performing teams with measurable impact that can effectively handle market variations.Its crucial that tangible,result-driven metrics are aligned w

130、ith the organizations vision.Implementing these revamped metrics and adapting to new ways of determining value demand strong partnership with internal stakeholders and suppliers,along with transparent methodology and collaborative steering.Trends in Four Focus Areas The potential supply chain and pr

131、ocurement trends in 2023 that influence leadership direction in redefining new metrics can be clustered into four key areas,including:Operational Efficiency With Digitalization:Enhancing maturity with adoption of digital solutions to enable process efficiency Cost Protection:Controlling financial im

132、pact due to inflationary changes and price volatility Supply Security and Risk Mitigation:Improving supply chain visibility to secure source of supply while reassessing risk mitigation protocols ESG:Strengthening plans for long-term adoption of measurable ESG goalsAdopting new metrics that can succe

133、ssfully measure and monitor how these trends impact the organization will allow leaders to proactively develop fresh strategies.Realigning Supply Chain and Procurement MetricsKeeping these focus areas in mind,supply chain and procurement leaders can recalibrate what they measure by including the fol

134、lowing strategic,operational and financial metrics in addition to traditional metrics to continuously measure maturity levels:P&L Protection:Measure procurement efforts to maintain low impact of direct material price volatility and trends in cost components of major products on margins.24Back to Con

135、tentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATIONSupply Chain Visibility:Determine quantifiable metrics to assess upstream material security visibility across the supply chain to avoid disruptions and find real-time solutions.Supply Security:Establish a procurement metric through cat

136、egory management on securing multiple potential sources of key materials and services,to strike a balance between consolidating the supplier portfolio and ensuring material and service robustness.Lead Time Management:Leverage strategic supplier partnerships to develop robust performance metrics on l

137、ead time for procured service and materials.Supplier Solvency:Measure solvency through a credible risk rating agency,assessed in line with the supply chain risk exposure of the organization.For example,a“critical”supplier should be monitored more regularly and with higher solvency expectations than

138、a“transactional”supplier.On-Time-In-Full:Measure contractual buffer stock maintenance to ensure there are order refreshes that translate into the expected demand.Market-Tailored Sourcing Events:Quantify strategic sourcing events that reflect the increase in risk likelihood and impacts from service o

139、r material availability versus total cost of ownership considerations.Supply Resiliency:Measure upstream tiered supply chain from suppliers that is,supply chain of suppliers while exploring supplier alternatives to quantify dependencies.Demand Forecasting:Align with procurement representatives and s

140、uppliers to ensure all parties are aware of the supply/demand trends and likely impacts on resiliency,risk and cost.This should be based on a regular,reliable,accurate and common format.These metrics can complement traditional metrics and offer added perspective on value capture,energizing organizat

141、ions by creating the vision and capability to align objectives and targets with current market changes.25Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATION7|Remote Working:An Opportunity To Attract Diverse Talent and Catalyze DEI Goals The world of work is at a crossroads s

142、trategies and goals for companies are changing,and employees,job seekers and consumers at large are demanding that businesses be more socially responsible and take a stronger stance.Diversity,equity and inclusion(DEI)is top of mind for organizations,and companies are reviewing talent management proc

143、esses to improve workplace diversity.Remote work can be an effective strategy to achieve ambitious DEI targets,while simultaneously enabling companies grappling with high attrition and labor rates to hire and retain employees.It improves diversity as it does not limit hiring to a geographic region(a

144、round the companys offices)and permits recruiters to cast a wider net;allows primary caregivers such as but not restricted to single parents and women to enter the workforce by making it easier to balance family responsibilities and work;creates a more neutral,secure and stress-free environment for

145、marginalized/underrepresented groups;and opens up opportunities for people with disabilities that affect mobility.After almost two years of working from home,employee expectations have changed people no longer want to waste hours commuting to an office or spend five days a week there.The pandemic br

146、oke down barriers and shifted the global perspective on work.Remote work is here to stay,according to researchers at career platform Ladders that has been tracking remote work availability across the 50,000 largest employers in North America since 2020.Pre-pandemic,about 4%of U.S.and Canadian jobs w

147、ere permanently remote roles.In 2020,that grew to 7%;in Q1 2022,24%of all professional jobs in the U.S.and Canada were permanent remote work.8 According to projections,remote opportunities will continue to increase through 2023.This is an excellent opportunity for organizations to make good on DEI c

148、ommitments.Companies like tech giant Meta are seeing the benefits of increased remote work the company announced in its 2022 annual diversity report that it has already exceeded its DEI goals set for 2024 because of increased remote jobs.9 Best Practices in Hiring Business leaders are now adopting s

149、ome of these practices to mitigate hiring biases and truly enhance workplace diversity:Rethinking job requirements:Is the job defined in a way that excludes or only targets a certain demographic?Creating neutral job descriptions:Is the job positioned in ways or on forums that resonate with and are a

150、ccessible to all?26Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATION Eliminating racial and gender biases:Can there be job applications with the applicants name,gender,age,and other potentially prejudicial factors anonymized?Minimizing recruiting bias:Is data and carefully

151、 defined metrics being used to evaluate candidates?How can cultural fit biases not based on traits,skills or knowledge be reduced?Are the interviewers a diverse group?Improving DEI Does Not End With Hiring Organizations are also recognizing and actively managing generational differences now.As Gen Z

152、(those born between the late 1990s and early 2010s)employees enter the workplace,leaders are implementing best practices that address the divergent needs of an increasingly multigenerational workforce.With over five generations working together,companies are conscious of the stereotypes that exist w

153、ithin each group and are developing a deeper understanding of the economic and social realities of each generation to understand motivations,biases and boundaries,and create truly inclusive workspaces.MetricsCommunicationPolicyOwnershipBuilding a Sustainable Diversity ProgramSource:GEPSetting up a p

154、olicy on diversity is the first stepIt should be a part of overall business strategyOwnership is important to impart change people with key roles in the organization should be responsible for driving the policyResponsibilities should be driven downwards from executive level Change management should

155、be targeted at implementing the recommended changes for inclusion and diversityIt would be a multistep process focusing on overall organizational changes Change ManagementInternal:The goal is to define DEI,its impact on the organization,and its policies and activitiesExternal:Establishing effective

156、communication channels with external business partners to spread program awarenessEstablishing and tracking metrics for measuring performance.These will provide benchmarks to track the programs progress,and highlight value of the program 27Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHT

157、DRIVESINNOVATIONSupply chain and procurement leaders enter 2023 with a lot on their minds.The business outlook,stressed by war,inflation,interest rate changes and more,will prompt many firms to take a cautious approach.Despite the broader renewal that firms sought following the ebb of the COVID-19 p

158、andemic,given these uncertainties,many leadership teams remain unable to take bold steps to reshape their future.Leaders from supply chain and procurement must be ready to act.These leaders will wield their supply chains to advance social causes and their corporate values.They will accelerate ESG ou

159、tcomes.They will accelerate digital transformation.They will battle inflation with tools old and new.And they will recruit modern,diverse talent into their teams.These leaders offer something different.These leaders hold the keys to unlock a brighter and more productive future.This is their moment 2

160、023 is the year for supply chain and procurement.ConclusionTurn Ideas Into Action.Talk to GEP.GEP helps enterprise procurement and supply chain teams at hundreds of Fortune 500 and Global 2000 companies rapidly achieve more efficient,more effective operations,with greater reach,improved performance,

161、and increased impact.To learn more about how we can help you,contact us today.John PiatekVice President,ConsultingJohn has 18 years of strategy consulting experience managing several large-scale engagements with leading global clients.At GEP,John is responsible for partnering with leading CPG and re

162、tail enterprises on strategy,supply chain and management initiatives.John is also the Chair of GEPs Thought Leadership Council.LETS TALK28Back to ContentsSUPPLY CHAIN&PROCUREMENT OUTLOOK 2023INSIGHTDRIVESINNOVATIONNOTES 1“World Economic Outlook,October 2022:Countering the Cost-of-Living Crisis,”Inte

163、rnational Monetary Fund,11 October 2022|https:/www.imf.org/en/Publications/WEO/Issues/2022/10/11/world-economic-outlook-october-20222 “Edelman Trust Barometer 2022,”Edelman,2022|https:/ 3 “For Employees,Shared Values Matter More Than Policy Positions,”Qualtrics,2 June 2022|https:/ Fang Block,“Global

164、 Impact Investments Surpass$1 Trillion for the First Time,”Barrons,12 October 2022|https:/ Yvonne Lau,“47 of the Worlds Biggest 200 Companies Still Havent Left Russia.Now the Kremlin Is Preparing Expropriation Blackmail,an Expert Says,”Yahoo!finance,14 August 2022|https:/ “Scope 3 Emissions,”Global

165、Compact Network UK,2022|https:/www.unglobalcompact.org.uk/scope-3-emissions7 Giulia Carosella,Serge Findling,Shawn Fitzgerald,Daniel-Zoe Jimenez,Gard Little,Adelaide OBrien,Robert Parker,Joseph C.Pucciarelli and Yukiharu Yorifuji,“IDC FutureScape:Worldwide Digital Transformation 2022 Predictions,”ID

166、C,October 2021|https:/ “Ladders Q1 2022 Quarterly Remote Work Report,”Ladders,4 April 2022|https:/ “Remote Work Fuels Major Diversity Boost at Meta,”World Economic Forum,21 July 2022|https:/www.weforum.org/agenda/2022/07/meta-remote-work-diversity-boost/GEP delivers transformative supply chain solut

167、ions that help global enterprises become more agile and resilient,operate more efficiently and effectively,gain competitive advantage,boost profitability and increase shareholder value.Fresh thinking,innovative products,unrivaled domain expertise,smart,passionate people this is how GEP SOFTWARETM,GE

168、P STRATEGYTM and GEP MANAGED SERVICESTM together deliver supply chain solutions of unprecedented scale,power and effectiveness.Our customers are the worlds best companies,including hundreds of Fortune 500 and Global 2000 industry leaders who rely on GEP to meet ambitious strategic,financial and oper

169、ational goals.A leader in multiple Gartner Magic Quadrants,GEPs cloud-native software and digital business platforms consistently win awards and recognition from industry analysts,research firms and media outlets,including Gartner,Forrester,IDC and Spend Matters.GEP is also regularly ranked a top su

170、pply chain consulting and strategy firm,and a leading managed services provider by ALM,Everest Group,NelsonHall,IDC,ISG and HFS,among others.Headquartered in Clark,New Jersey,GEP has offices and operations centers across Europe,Asia,Africa and the Americas.To learn more,visit .100 Walnut Avenue,Clar

171、k,NJ 07066|P 732.382.6565| Clark,NJ|Austin|Chicago|Atlanta|Toronto|Mexico City|San Jose|So Paulo|Dublin|London|Amsterdam|Frankfurt|Prague|Cluj-Napoca,Romania|Pretoria|Abu Dhabi|Mumbai|Hyderabad|Coimbatore|Kuala Lumpur|Singapore|Shanghai|Dalian|Tokyo|SydneyCopyright 2023 GEP.All rights reserved.GEP S

172、MART is an AI-powered,cloud-native software for direct and indirect procurement that offers comprehensive source-to-pay functionality in one user-friendly platform,inclusive of spend analysis,sourcing,contract management,supplier management,procure-to-pay,savings project management and savings track

173、ing,invoicing and other related functionalities.GEP NEXXE is a unified and comprehensive supply chain platform that provides end-to-end planning,visibility,execution and collaboration capabilities for todays complex,global supply chains.Built on a foundation of big data,artificial intelligence and machine learning,GEP NEXXE is next-generation software that helps enterprises make supply chain a competitive advantage.