Perspectives for 2023 from Supply Chain Leaders at Uber, Maersk, and P&G

Supply chain is having a moment.

Rarely has the backend logistics infrastructure for global commerce been a more relevant topic of discussion in the news or in corporate boardrooms than it is today. Following two years of unprecedented disruption wrought by the COVID-19 pandemic, supply chain leaders have the attention of the C-suite and a clear mandate for change.

Last week, Menlo brought together three leading voices in this discussion to talk about what these dynamics will mean for the future of supply chain: 

• Bill Driegert, Co-Founder & Head of Operations at Uber Freight
• Michelle Eggers, formerly Vice President of Logistics Purchases at P&G, currently Vice President of Grooming Purchases at P&G
• Shereen Zarkani, Managing Partner at Maersk Growth

Over the course of the conversation, the three panelists assessed the state of the current supply chain landscape, discussed the industry’s new mandate to future-proof logistics infrastructure, and outlined the technologies and innovations they are most excited about investing in over the next year.

Below, we recapped the five biggest takeaways from the panel.

COVID-era supply chain issues are receding, but the aftereffects will linger

The impact of the pandemic on global supply chains cannot be overstated. The supply shock that started in China in March 2020, and the demand shock that followed as consumer spending surged, exposed vulnerabilities in the production strategies and logistics infrastructure of firms around the world.

Nearly two years later, the worst seems to have passed. Delays at ports are now easing, container prices are falling back to pre-pandemic normals, and retail inventory is rebounding. Labor shortages have been stubbornly persistent, but are now stabilizing rather than continuing to climb.

Despite the early signs of relief, however, our panelists predicted continued disruptions in the short term as global supply chains continue to feel the aftereffects of the pandemic, and geopolitical tensions and regulations introduce new and ongoing uncertainty. 

“I think there are a lot of pent-up buffers and other factors at play that haven’t fully recovered,” Driegert said. “We’ve still got some surprises left in terms of how the market will react over the next four to six months. It’s more normal but not quite there yet.”

Resiliency has become essential coming out of the pandemic

“I think what the pandemic has shown is how fragmented and completely fragile the supply chain is. And this fragility cannot be unseen,” Zarkani said.

In response to the lessons of the pandemic, supply chain leaders have been given the pressing task of building back a more resilient, future-proof global logistics infrastructure with new levels of visibility, automation, and sourcing redundancy.

Crucially, however, this new charge must be balanced with the continued need to operate efficiently. To this end, Driegert emphasizes the important role that supply chain technologies can play in improving modern supply chains and hastening the speed of adoption.

“Increased visibility has motivated a lot more focus on transformational tech and how it can build more resiliency for modern supply chains,” he said. “We have seen a lot more interest in new procurement methodologies. A lot of the tech that we first marketed two to three years ago, which were getting steady bites and growth, we saw a dramatic acceleration in—like real-time pricing APIs.”

“Transportation and freight is a very conservative industry, and so I think a jolt like this has helped accelerate what otherwise would’ve been a very slow adoption curve of some of these new technologies.”

Automation is being prioritized amid macroeconomic headwinds

So what’s on the shopping list for supply chain leaders? Automation is first, according to Eggers—especially in light of persistent labor shortages and the cost-cutting pressures brought on by recent macroeconomic headwinds.

“Automation is the most interesting thing for us right now,” she said. “Automated vehicles within our warehouses is one approach, but automation technology outside of the warehouse walls will be a while.”

More immediately, panelists indicated business process automation will be a priority in 2023—especially systems that are able to integrate with existing software infrastructure to achieve greater transparency and drive efficiency.

Sustainability is no longer optional

Another important area for supply chain investment in the next year will be in sustainability. Regulations compelling investments in this area have only begun to surface, but pressure from consumers, supply chain partners, and investors have pulled up the timeline for large companies.

“We have really robust discussions ongoing with our key partners on decarbonization and how to approach this,” Zarkani said of Maersk. “The clear signal we’re getting is that for most bigger companies, sustainability is no longer optional.”

These investments start with carbon accounting and visibility into the environmental footprint of companies’ supply chain operations. From there, firms are looking into approaches like carbon capture, alternative fuels, network design, and efficiency to reduce emissions.

Reshoring and nearshoring remains further out on the horizon

One trend that panelists were cooler on for the next year was nearshoring. Despite longer-term tailwinds compelling some U.S.-based companies to shift production to Latin America or North America, Eggers indicated the move still comes with tradeoffs that might blunt the trend’s near-term momentum.

“Nearshoring is certainly an opportunity, but it’s a choiceful decision,” she said. “ROI plays in here, as does sustainability and the resiliency discussion.”

Zarkani agreed, indicating that the trend might take a few years to materialize.

“The more urgent shift right now is out of China and into Southeast Asia, which many of the customers and companies have been trying to do during the pandemic and it has not been that easy to shift. It takes time and a lot of planning to redesign complete supply chains.”

Looking ahead

At Menlo Ventures, we’re more bullish than ever on the future of supply chain technology, and are actively looking to partner with entrepreneurs building for the logistics needs of the post-pandemic world.

Our previous investments in the space include Alloy, CloudTrucks, Enable, Fox Robotics, Parade, RightHand Robotics, Scout RFP (acquired by Workday), ShipBob, and 6 River Systems (acquired by Shopify).

We’re grateful for our panelists Bill Driegert, Michelle Eggers, and Shereen Zarkani for sharing their insights and perspectives with us, as well as the many supply chain leaders, founders, and investors who tuned in.