Demand for change in the global supply chain is not new. The ongoing trade war between the United States and China already has prompted businesses in the United States to diversify their supplier bases away from China. A recent report by global consultancy Kearney estimates that, as a result of diversification, manufacturing import ratios between the two countries have been pushed to 98% in 2019 — an unprecedented level — and up from -32% the year before. A positive figure indicates net reshoring, and a negative figure indicates an increase in offshoring.
But other factors are driving change too, including the desire to mitigate disruption risk generally, cost savings, greater output agility and closer proximity to centers of demand. COVID-19 has only served to further expose the frailty of global supply chains and turbocharge demand for change. A recent ongoing survey of 50 chief financial officers from Fortune 1,000 companies found that one-third of the companies listed supply chain issues as a top-three concern for dangers facing their businesses.
The needed changes take time and ultimately will rely on technology innovation and implementation, often through the acquisition of technology disruptors by established industry players. Let’s take a look at some of the technology that has a potential to resolve some of the latest supply chain challenges.