Author Chris Rogers
Big PictureCOVID-19Supply ChainTrade
The outlook for global supply chains has faced a decade of disruptions. The most significant have included the US-China trade war, the COVID-19 pandemic-era consumer goods boom and the Russia-Ukraine war. Supply chain disruptions have also included a variety of natural disasters, financial failures and operational difficulties.
Supply chain activity has normalized in operational terms during 2023, but there are significant risks across the industrial policy, labor action and environmental policy implementation spheres influencing the supply chain industry outlook for 2024.
Supply chains need to be more resilient, but questions remain over whether corporations and their investors are willing to make the investments necessary to fortify them. There is no shortage of technology available to enable supply chain resilience, with generative AI as the latest example. But most companies need to see short-term returns on investment, and recent experiences with block chain, for instance, are leaving some hesitant.
• Paying for resilience in a high-cost environment
Shrinking corporate profit margins and higher relative capital expenditures signal that reinvesting in capital stock may take priority for companies over spending on supply chains in 2024.
• Technology toolkit for enabling resilience
Deploying technology to enable supply chain resilience requires close attention to return-on-investment. While some large enterprises have the resources to take gambles on emerging technologies, most players in the supply chain space will not spend for digital transformation without a near certainty of return on their investment in a reasonable period.
• Delivering supply chain resilience through organizational agility
Building a robust supply chain is a long-term process, whether through adapting inventory policy and adopting new technologies or fundamentally retooling sourcing via supplier choice or international diversification.
• Resilience still needed, spending not guaranteed
Supply chain resilience will be just as important in 2024 as it was in the past three years, yet corporate willingness and ability to invest in inventory management and multi sourcing may be limited by falling profits and high financing costs.