A supply shock and ongoing disruption during the COVID-19 pandemic have exposed weaknesses in global supply chains.
A recent survey conducted by McKinsey & Company revealed that 93 % of global supply-chain leaders plan to increase resilience across the supply chain. Expected changes will include:
- Dual sourcing of raw materials
- Increasing inventory of critical products
- Near-shoring and increasing supplier base
- Regionalising supply chains.
In addition to this, 54 % of global supply-chain leaders say they intend to change how they organise their supply-chain activities which is likely to result in centralising their supply-chain planning and using advanced technology.
Thorough analysis of weaknesses in supply chains had not been a top priority for many firms but this topic rose to the top of agendas when unexpected disruptions brought businesses to a sudden halt. Mapping supply networks has become essential to identify vulnerabilities and take the necessary steps to build resilience. Although sourcing locally may be a reflex solution for some, abandoning globalisation could prove costly. Therefore, supply-chain managers will have to find the right balance between retaining all the advantages globalisation has brought to companies sourcing from around the globe and engaging with regional suppliers to reduce and manage risks in the future.