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10 December 2021 / Report
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Copy LinkRedesigning of supply chains will continue in the decade ahead. Key drivers of potential changes to global supply chains include transport capacity risks, climate change, geopolitical risks, concerns about sustainability, cyber risk, the high cost of energy, labor shortages, high inflation, and the possibility of new trade barriers. To respond to these challenges, businesses will need supply chains that are resilient (able to absorb and recover from shocks) and agile (capable of correcting course swiftly and effectively without significantly increasing operational costs). In this report we discuss five distinct trends in global supply chains for the next decade that will affect the business landscape.
The global pandemic’s impact on world trade revealed the need for greater agility and resilience of global supply chains. Existing systems were unprepared for the unprecedented shifts. Current short-term remedies, such as earlier advance orders and higher inventory targets, have increased volatility and amplified the inflationary effects of shortages. Adapting to new conditions will take time, and volatility remains. New demand patterns will continue to emerge in the post-COVID-19 environment. When these intersect with reduced logistics, production, and manpower resources, supply problems—and costs—will increase.
Redesigning of supply chains will continue in the decade ahead. Key drivers of potential changes to global supply chains include transport capacity risks, climate change, geopolitical risks, concerns about sustainability, cyber risk, the high cost of energy, labor shortages, high inflation, and the possibility of new trade barriers. To respond to these challenges, businesses will need supply chains that are resilient (able to absorb and recover from shocks) and agile (capable of correcting course swiftly and effectively without significantly increasing operational costs).
Global production networks are not going to disappear. However, localization of production and sourcing will continue, and in some cases accelerate, driven by the need for increased resilience and supply security. Such reshoring of goods supply chains may prove inflationary. At the same time, China will remain a crucial hub for manufacturing, but supply chains in and around China will change.
Faster development of supply chains in services and services trade, including trade in digital services, means globalization will not recede. And global production networks are not going to disappear. However, we see five distinct trends in global supply chains for the next decade that will affect the business landscape. Each trend carries an implication for what lies ahead.
Redesigning of supply chains will continue in the decade ahead. Key drivers of potential changes to global supply chains include transport capacity risks, climate change, geopolitical risks, concerns about sustainability, cyber risk, the high cost of energy, labor shortages, high inflation, and the possibility of new trade barriers. To respond to these challenges, businesses will need supply chains that are resilient (able to absorb and recover from shocks) and agile (capable of correcting course swiftly and effectively without significantly increasing operational costs).
Global production networks are not going to disappear. However, localization of production and sourcing will continue, and in some cases accelerate, driven by the need for increased resilience and supply security. Such reshoring of goods supply chains may prove inflationary. At the same time, China will remain a crucial hub for manufacturing, but supply chains in and around China will chang
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