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How to work around supply chain disruption

Supply chain disruption is the new normal, meaning companies now face the painful task of reconfiguration. A report from GlobalData’s Thematic Intelligence Team outlines possible solutions.

The era of the easy, frictionless supply chain is over. Up until 2020, supply chains were incredibly resilient and efficient. Everything was delivered seamlessly, on time and at a low cost – to the benefit of companies and consumers. As such, few people were focused on them. According to GlobalData’s Social Media Analytics, supply chains were mentioned on Reddit and Twitter only 1,908 times in 2019.

However, supply chain vulnerabilities have been exposed by several recent events including Covid-19, the semiconductor shortage, and the Ukraine war. In 2021, social media mentions of supply chains reached 25,636, a thirteen-fold increase from 2019. The world order that enabled globalisation and those resilient, efficient supply chains is splintering. A new order of de-globalisation will replace it.

There are no quick fixes, and reworking the supply chain model will be painful. Many corporate leaders view the risks and costs of reconfiguring their supply chains as greater than leaving them as they are. Many believe that reconfiguring supply chains could seriously damage the global economy. According to the World Trade Organization, decoupling into Western and Eastern blocs would cause the global economy to lose almost 5% of output, equivalent to more than $4trn. Re-engineering supply chains is an enormous task, and corporate budgets will be squeezed as the global economy moves into a possible recession. However, it must be done. VIEW ARTICLE

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