Page 25 - ITLN Jan-Feb 2023 for Magzter

The year 2023 will be the year of the fastest adoption
of ESG practices.

Automation
No one has any option to avoid acceleration in
automation of the supply chain as it is need of hour to
survive, sustain and grow. The degree of automation
may vary based on the maturity of the organisation
and subdomain. The adoption of advanced tools in
cloud computing, analytics, artificial intelligence
(AI), robotics, and Internet of Things (IoT) will gain
momentum. The objective of automation will be
driven by efficiency improvement, cost optimisation or
support in decision-making. The pace for the adoption
of autonomous vehicles and drones will move to
a faster lane. We may also see a few pilot steps in
advanced technologies like quantum computing in
this domain.

Infrastructure
Operational capabilities will always be at the centre
stage of the supply chain and infrastructure will be
perquisite for the same. Most of the fast-growing
economies like India and China are also heavily
investing in infrastructure projects, which enables
the efficiency of the supply chain. In 2023, it is likely
that there will be a greater thrust for investment to
uplift supply chain infrastructure,
warehouse automation and operating
assets. We don’t see any indication of
the reduction in organisations’ budget
for supply chain infrastructure &
capability building.
The decline in
economic growth also Network
has a consequential With the change in offshoring
impact on the logistics pattern, improved automation
costs but improves transit time, and supply chain and better infrastructure,
transportation cost and inventory level there will impact on the global
favourably. The trend is expected to industry and will drive logistics network. During the last
get further momentum in 2023. the sector towards Covid-19 wave, disturbance in the
more resilience. transportation network led to a
ESG sharp rise in freight rate, which
Disruptions in the last few years ultimately came down after two
have bought sustainability to the forefront of the years by end of 2022. In spite of the fresh Covid-19
supply chain. The adoption of ESG-focused initiatives wave, no such spike in freight is expected due
and technologies will accelerate in the coming to suppressed demand and changing offshoring
year. Most of the initiatives will be targeted towards patterns. In case of a sharp spike in the new Covid-19
optimising operating practices, emission control and wave, we expect pent-up demand for air freight.
risk avoidance. Net-zero has come to discussion In nutshell, the year ahead will be a year with few
forums in the last few years. Carbon offsetting – disruptions for supply chain professionals. Wherein
the compensation for carbon emissions through “3A” - Adapt, Automate & Agile strategy may help in
other projects that are reducing carbon emissions accelerating the performance and mitigate the risks.
elsewhere - will continue to come in front in coming The absence of “3A” may have serious implications on
years but it will be a long way to go. Among logistics the overall performance of organisations in future. 
players, the adoption of eclectic vehicles (EVs) will
increase in order to reduce carbon emissions, but the Vikash Khatri is the founder of the logistics & supply chain
infrastructure gap will be a challenge in this direction. advisory and execution support firm Aviral Consulting
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