Part II – Strategies for Navigating Uncertainty This Year in Logistics.
This is the second of two articles around navigating uncertainty in logistics during 2023.
In our first article, we discussed how economic, geopolitical, and how changing factors in logistics may result in uncertainty this year. This article will focus on ways to prepare for and overcome challenges associated with uncertainty in the year ahead.
Although 2023 will likely bring us some surprises in logistics, this is an opportunity for companies to focus on developing structures to help guide them through the pending challenges ahead. One of these areas is predictive planning. Companies often reflect on the past year to create their forecasts. Key drivers will likely be very different in the year ahead. For 2023, spending time reviewing business projections and maintaining knowledge of how current events are impacting trade and logistics may help with understanding how to adjust revisions to planning and forecasts. As companies alter their business plans throughout the year, we recommend this is reflected through budget revisions and financial planning, likely at greater frequency. Investing time in reviewing general consumer and economic data may highlight leading indicators for adjustments as well. Meeting with leadership teams to develop contingency strategies for both sales and operational execution processes and the need to remove planning silos can contribute to keeping the organization devoted to the goals and obstacles. This level of focus can lead to maintaining success in different scenarios and can set companies up for proactive and financially favorable changes, versus delayed business reactions that can be costly.
Increased operational flexibility can also be a great help during times of uncertainty. In logistics, this can be key, as not having alternative plans can have cascading impacts throughout transportation, ultimately impacting entire supply chains. Software systems that can adjust necessary functionality can be a positive gamechanger or if lacking, crippling to a company. If there are significant changes to how data will be processed or tracked, companies may want to reconfigure how that data flows or interacts. Ensuring that software systems can not only grow with a company, but also be functionally customized may help when changing how business is done may aid in the continued delivery of customer needs. Finally, human capital flexibility is something that can greatly contribute to operational flexibility. Cross training, schedule flexibility, and the ability to work cross-functionally with staff in other groups can allow companies to shift business models and maintain operational cohesion.
Building structures and systems that increase long-term resiliency is another area that may help this year and is a practice that can benefit a company’s overall health. These are often specific to the needs and current state of a company. Performing a gap analysis and looking at potential upcoming risks that may impact a company’s business can be the base for looking at potential large changes the company may need to make to remain competitive. Once the analysis is complete, companies may look at what types of investments in structure are needed to weather potential storms ahead. In some cases, building up cash reserves may be needed, in others, it may be internal infrastructure. During times of uncertainty, taking extra time to build stronger relationships with suppliers, partners and customers may prove beneficial. That extra connection and trust built may help mitigate any adverse news delivered to them due to downstream impacts from challenges experienced due to uncertainty or sudden market changes.
Although 2023 will likely bring us some surprises in logistics, this is an opportunity for companies to focus on developing structures to help guide them through the pending challenges ahead. There are great resources available to get the latest information on what is happening in the ports, legs of transportation and macro-economics that can help your company prepare for the year ahead. Taking that information and evaluating how a company’s systems and structures are setup to handle potential shifts in business can improve business agility, while reducing stress to employees. By taking the steps needed to be more prepared for uncertainty, it can also develop a sustainable mindset in business innovation and increase the ability to handle future market ambiguity. These measures can help companies stand out as leaders during challenging times, become proven partners and enable proactive organizations to gain market share and succeed where others may fail.