This post originally appeared in Supply Chain Brain.
From 2020-2022, companies weren’t thinking about supply chain strategy or design at all. Everyone had shifted to short-term thinking. In 2023, companies began cautiously raising their heads to assess the situation and look ahead.
The time for pandemic-era thinking is over. This will be the year of strategic supply chain design — but companies must be shrewd in their technology and vendor selection.
Following are six predictions for the new era of strategic supply chain design in 2024.
A shift from short-term to strategic thinking. In 2023, businesses got their heads above water, logistically speaking, and cautiously began to look ahead. Now, they’re ready to delve into strategic assessments, to focus on long-term supply chain resilience and efficiency.
According to a Gartner 2023 survey, 41% of supply chain organizations are currently deploying advanced analytics in the form of end-to-end network modeling, with an additional 48% planning to deploy in the next two years.
An end of the age of unlimited cheap suppliers. Companies are recognizing the need to diversify and reevaluate their sourcing strategies.
Deteriorating U.S.-China relations, in combination with an underperforming Chinese economy, are driving supply chain managers to reconsider their reliance on China as the primary manufacturing link in their supply networks. In fact, a Gartner study reported that “52% of industrials with operations in China are moving some sourcing or production away from the country to other cost-competitive locations in the attempt to de-risk their supply chains.”
These shifts are prompting companies to trade off the cost, service and risk of doing business in China and rethinking their near-shoring strategies. Sophisticated risk assessment algorithms help them to understand potential vulnerabilities before selecting suppliers to safeguard against disruptions and bolster stability and resilience.
Demand for vendor transparency. Customers are becoming more discerning, seeking transparency beyond product functionalities. They’re increasingly interested in the teams behind the technologies, and making more decisions based on the company’s mission and culture, and the expertise of the individuals involved.
Selecting a good partner requires due diligence. If a vendor is unwilling to discuss things like its investors, its partners and how and where its solutions are made, you can’t trust it. Prospective partners should engage with you and make you part of their journey.