- Supply Chain Agility and Resilience
The COVID-19 pandemic has clearly shown the importance of supply chain agility and resilience. With the pandemic challenge, companies have been forced to pivot quickly to respond to disruptions caused by responses to the pandemic, such as lockdowns, border closures, and other challenges.
A new trend will see businesses focusing on improving their supply chain agility and resilience. This will involve the implementation of contingency plans and backup suppliers. Also, businesses could adopt real-time monitoring and tracking tools and invest in digital technologies. Businesses will also need to prepare to pivot quickly in response to changes in demand or supply chain disruptions.
- Global Production Networks Will Remain Dominant, but Localization May Increase
Global production networks have played an important role in being a critical part of supply chains for decades. However, with the COVID-19 pandemic, some businesses have been forced to reconsider the risks associated with offshore manufacturing and sourcing.
Therefore, we should expect global production networks to remain a dominant feature of supply chains in the future. However, businesses might increase their focus on localizing their supply chains to minimize risks and improve their agility. Such actions will include bringing production and sourcing closer to home by manufacturing in-house or working with suppliers closer.
- China Will Remain a Key Manufacturing Hub of the Global Economy
China has proven to be an undisputable king in manufacturing for decades. This will unlikely change despite rising labour costs and trade tensions between the United States and China. However, with these geopolitical dynamics, uncertainties, and associated challenges, businesses must consider their sourcing strategies carefully. This could involve diversifying their supply chains by working with suppliers in other regions, such as Southeast Asia or Africa.
- Globalization of Services Will Accelerate
The globalization of services has been a growing trend in recent years. This has seen businesses increasingly outsourcing services like customer support, finance, and IT to providers located in other countries.
As we move further into the future, we should expect the globalization of services to accelerate. This will include businesses outsourcing more services to providers in other countries, mostly emerging markets. However, businesses must carefully consider the risks associated with outsourcing services. Some of these risks are data security and intellectual property protection.
- Sustainability and Ethical Sourcing Will Become Increasingly Important
Over the years, sustainability and ethical sourcing have proven to be important considerations for businesses and consumers alike. With the new trend towards sustainability, the future will be more about more businesses incorporating sustainable and ethical practices into their supply chains.
The move may involve adopting circular economy principles, which include reducing waste and emissions or sourcing materials from ethical suppliers who prioritize fair labour practices and environmental sustainability. With these new changes, organizations will need to work closely with their suppliers to ensure that they meet sustainability and ethical standards.
In summary, a number of trends will shape the future of global supply chains. With these changes, organizations need to adapt to remain competitive in the global marketplace and meet their customers' evolving needs. By adapting to the new markets, they can create more resilient, sustainable, and efficient supply chains that can withstand future disruptions.