Global supply chains have seen a number of shocks in recent years. The COVID-19 pandemic brought lockdowns and border restrictions that affected manufacturing, transportation and distribution. Geopolitical conflict has disrupted exports while sending the wider costs of critical inputs such as energy soaring. At the same time, the sustainability revolution is reshaping the way companies do business.
Towards a new way of working
Global businesses that have coped well during the supply chain crisis have typically already implemented “supply chain towers” – a dashboard of data, key metrics and events that help organisations to understand, prioritise and resolve critical issues.
“If your supply chain is the same as it was in the old normal of 2019, you’re doing something wrong,” Wilding notes. “What customers want and value has completely changed. You need to think end to end. You’ve got to think about your customers and your customers’ customers. You’ve got to think about your suppliers and your suppliers’ suppliers. That’s why we’re in the growing pains of a new way of working.”
As emerging technologies change what’s possible and the world moves towards a more sustainable and innovative value chain, investors will find opportunities. Fan concludes: “There are opportunities for investment in companies that implement automation, robotics and digital supply chain tools, or in countries and regions that benefit from the geographical diversification of supply chains.”
At the same time, companies that fail to implement resilient supply chains will be leaving themselves vulnerable to future shocks. “This may start to be seen as a risk factor by markets, especially given the close links between supply chains and other important investment themes such as environment, social and governance (ESG) standards, sustainability and progress towards net zero.”
1 Supply chains: To build resilience, manage proactively, McKinsey & Co, May 2022 ↩
3 Asia-Pacific Organizations Are Most Receptive to Smart Manufacturing Usage, Rockwell Automation, July 2022 ↩