88% of US' SMBs to shift supply chains closer home in 2023: Survey

23 Dec '22

2 min read

Pic: Shutterstock/ Rawpixel.com

Around 88 per cent of small and midsize businesses (SMBs) plan to or are currently switching at least some of their suppliers closer to the US in 2023. Faced with economic headwinds, operational bottlenecks, and an ongoing need to remain competitive, SMBs are taking drastic action to optimise and innovate their supply chains, as per a survey.

While industry experts predicted nearshoring to happen slowly over the course of several years, SMBs have already or are making a rapid shift to nearby suppliers. SMB supply chain professionals rate economic inflation (65 per cent), the lack of inventory (45 per cent), and the economic recession (42 per cent) among their top three concerns going into 2023, according to a survey conducted by software company Capterra.

SMBs are disproportionately impacted by these challenges compared to larger companies with more resources to absorb rising costs and who have more buying power in the procurement process. Small business supply chains are investing in software-based emerging tech at twice the rate of hardware-based ones. The top three emerging tech adopted by SMB supply chains are IoT (42 per cent), blockchain/smart contracts (41 per cent), and artificial intelligence (39 per cent).

While major retailers have been dealing with an influx of excess inventory, 67 per cent of SMBs say their forecasting techniques have helped them avoid this same fate. Both seasonal and quantitative forecasting techniques are among the most commonly used by SMB supply chain professionals in 2022 and going into 2023.

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 organisation (GPO) has more than doubled in just the last year. Nearly two-thirds (64 per cent) of SMB supply chains have joined or plan to join a GPO 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,” said Olivia Montgomery, associate principal supply chain analyst at Capterra. “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.”

Capterra had surveyed 300 US SMB supply chain professionals to better understand the challenges and solutions for navigating a changing industry.

ALCHEMPro News Desk (NB)

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