Supply Chain Disruption – Thematic Intelligence
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Supply Chain Disruptions Thematic Report Overview
A supply chain comprises organizations’ activities and processes to manufacture and deliver goods and services to consumers. Supply chain disruption occurs when these processes are compromised. In the aftermath of the pandemic, many companies have reverted to a just-in-case strategy as high interest rates make it more expensive for companies to carry large inventories. Recent global challenges, including the US-China trade war and the Ukraine conflict, alongside the growing impact of climate change, will force companies to rework supply chains and decouple from non-geopolitically aligned regions. Moreover, to improve supply chain resilience, companies should prioritize digitalizing their networks and adopting a circular economy model.
The supply chain disruption thematic report discusses the factors that interrupt the flow of supply chains and presents solutions to mitigate the risks to make supply chains more resilient. Furthermore, the report enlists alternatives to the Chinese supply chain depending on geopolitical affiliations. It also assesses a few of the key industry supply chains.
Solutions to Supply Chain Disruption | · Reshoring, Nearshoring, and Friendshoring
· Diversification · Digitalization · Circular Economy |
Alternatives to China | · North America
· Europe · China · India · Southeast Asia |
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Supply Chain Disruptions – Keyways to Make Supply Chain More Resilient
friendshoring opportunities; diversify their supply chain; digitalize their networks; and adopt a circular economy model.
Digitalization: This technique should be used to tackle individual weak points. Digitalization is more cost-effective to focus on addressing individual issues than systemic supply chain concerns. Companies are using this modern technology to identify and manage weak points across their supply chains. For instance, in November 2023, Tecsys launched its Elite warehouse management system (WMS). This is designed for US-based healthcare distribution and is integrated with serialized Drug Supply Chain Security Act (DSCSA) support.
Leading Companies Using Technology to Tackle Supply Chain Disruptions
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Supply Chain Disruptions – Alternatives to China
China dominates global supply chains, from raw materials to end products. So, despite the billions of dollars in government aid directed towards reshoring supply chains, there is unlikely to be a complete decoupling of supply chains from China in the foreseeable future. A few nearshoring and friendshoring regions that can help companies decouple from China while keeping production costs low are North America, Europe, China, India, and Southeast Asia among others.
India is considered to be a strong manufacturing alternative to China. Furthermore, cost-effective labor and proximity to China make Southeast Asian countries such as Vietnam, Malaysia, and Thailand attractive manufacturing destinations for companies exiting China.
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Supply Chain Disruptions – Assessment of Key Industry Supply Chains
Most major industries are dependent on the semiconductor supply chain. However, this supply chain is littered with bottlenecks. US trade restrictions specifically target China’s capacity to manufacture AI chips, particularly for military purposes. The trade barriers include tax breaks to alleviate the costs associated with decoupling. Furthermore, the EV revolution is being singularly led by Chinese supply, with China dominating the batteries and EV markets.
The COVID-19 pandemic and the Ukraine conflict significantly disrupted the agriculture sector, with production shutdowns, transportation diversions, commodity shortages, energy price hikes, and inflation becoming recurring issues. As increasing trade policies fragment the global energy sector, building a circular supply chain will boost sustainability and resilience across the sector. It can also improve supply chain visibility and communication with Tier 2 and 3 suppliers.
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Scope
Reworking supply chains is complex and expensive, with no quick fixes. Slowing growth and increasing conflict are making companies’ operating environments riskier, more complex, and costlier. To improve supply chain resilience, companies should prioritize safety and reliability over profit by relocating production closer to home, diversifying their supply chain, digitalizing their networks, and adopting a circular economy model.
Key Highlights
Slowing growth and increasing conflict are making companies’ operating environments riskier, more complex, and costlier. To improve supply chain resilience, companies should prioritize safety and reliability over profit by relocating production closer to home, diversifying their supply chain, digitalizing their networks, and adopting a circular economy model.
In the aftermath of the pandemic, many companies have reverted to a just-in-time strategy, as high interest rates make it more expensive for companies to carry large inventories. Recent global challenges, including the US-China trade war and the Ukraine conflict, alongside the growing impact of climate change, will force companies to rework supply chains and decouple from non-geopolitically aligned regions.
China dominates global supply chains, from raw materials to end products. So, despite the billions of dollars in government aid directed towards reshoring supply chains, there is unlikely to be a complete decoupling of supply chains from China in the foreseeable future. That said, some nearshoring and friendshoring locations in Latin America and Southeast Asia can help companies decouple from China while keeping production costs low.
Reasons to Buy
- Understand the impact of supply chain disruptions on the global economy.
- Identify how leading companies are adapting to supply chain risks.
- Learn about the global challenges increasing the frequency of supply chain disruptions.
Apple
ASE
ASML
Avery Dennison
Bosch
BYD
CemAI
Contemporary Amperex Technology (CATL)
CropX
Foxconn
Ginkgo Bioworks
Goertek
Infineon
Intel
Jabil
Micron
Oracle
Stellantis
Systech
Tecsys
Tesla
TSMC
Vendanta
Volkswagen
Xpeng
Table of Contents
Frequently asked questions
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What are the key ways to tackle supply chain disruption?
A few of the common ways to tackle supply chain disruption are reshoring, nearshoring, and friendshoring, diversification, digitalization, and circular economy.
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Which are the key regions being considered as alternatives to China in the supply chain disruption theme?
The key regions that are most often considered alternatives to the Chinese supply chain are North America, Europe, China, India, and Southeast Asia among others.
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Which are the key industries impacted by supply chain disruptions?
The key industries impacted by supply chain disruptions are transport, consumer, manufacturing, and healthcare among others.
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