Eighty-eight percent of small and mid-sized businesses, known as SMBs, plan to switch suppliers closer to the U.S. in 2023 according to Capterra, a software company. The company surveyed 300 U.S. SMB professionals to gain insights into the future of the supply chain.
Faced with economic uncertainty, bottlenecks, and a need to remain competitive, companies are taking action to optimize and innovate their supply chains.
Capterra found the following insights:
Strained economy, low inventory are top stressors. SMB supply chain professionals rate economic inflation, the lack of inventory, and the economic recession as their top three concerns going into the new year. SMBs are disproportionately impacted by these challenges compared to larger companies with more resources to absorb rising costs and more buying power in the procurement process.
Software-based emerging tech is on the rise, hardware tech lags. Small business supply chains are investing in software-based emerging tech at twice the rate of hardware-based ones. The top three emerging technology adopted by SMB supply chains are internet-of-things universal connectivity, blockchain and smart contracts, and artificial intelligence.
Seasonal forecasting reduces excess inventory concerns. While major retailers have been dealing with an influx of excess inventory, 67 percent of SMBs say their forecasting techniques have helped them avoid this same fate. Both seasonal and quantitative forecasting techniques are among the most used by SMBs going into 2023.
SMBs are leveraging cooperative procurement to increase buying power. Either by working directly with each other to place larger orders or with their supplier who then has greater purchasing power, the number of SMBs in a group purchasing organization has more than doubled in the last year. About 64 percent of SMB supply chains have joined or plan to join an organization of this type to help manage procurement costs and challenges.
“The biggest surprise in the research is that nearshoring is happening much faster than predicted at small businesses,” says Olivia Montgomery, associate principal supply chain analyst at Capterra, in a statement. “What’s less surprising, but equally critical, is the shift we’re seeing toward collaborative procurement. Supply chains are becoming less of a back-of-the-house ‘secret recipe’ and more like a joint collective where everyone benefits.”
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