Past the point of no return for Supply Chains? How to manage the impact of disruption
- Lizzie Black
- January 20, 2023
Over the last week, companies, leaders and nations have come together at the World Economic Forum’s 2023 Meeting in Davos. A few of the 2022 ProcureTech100 have been spotted there too!
At Davos 2023, Kearney and WEF introduced the Global Value Chain Barometer.
Identified through the application of AI, it features billions of data points from Everstream Analytics (a ProcureTech100 pioneer), to help ‘leading organizations anticipate vulnerabilities in their global supply chain so that they may better weather any impending storms on the horizon.’
What does the Barometer do?
The Global Value Chain Barometer identifies 3 megatrends that are the main drivers of disruption:
- Climate change
- Geopolitical tension
- Technological step-change
WEF and Kearney Barometer
Some key points of change since December 2021:
- Climate events up 146%
- Tech disruption down 12%
- Disruptive events driven by geopolitical tension up 110%
Disruption has encouraged manufacturers to adapt to increased market volatility. Unfortunately, tension and disruption still lie ahead: high inflation and energy prices, risk of recession, value chain disruption. But there can be ways of managing the severity of impact.
How can companies mitigate risk?
- Diversify supplier base
- Engage in regular financial stress testing
- Implement advanced planning capabilities – identify component shortages, ESG risk and shifts in consumer demand
- Manufacturing adaptability
- Customer spending
Supply chain demand has changed. The world has changed. Kearney and WEF believe there is ‘no return to pre-pandemic ‘normal’’. Maybe the Barometer will encourage companies to act and take action to mitigate future risk and disruption in their supply chain and operations.
(0) comments