Supply Chain

Accept de-globalization as the new normal In their 23rd Annual Global CEO Survey www.pwc.com/gx/en/ceo-survey/2020/trends/industrial-manufacturing-trends-2020.pdf Published in 2020, PWC has identified a growing trend of de-globalization across industries. In particular, the report suggests that firms should consider the following changes to their operating systems:

Preparing for the potential fallout of a trade war, increased tariffs, labor restrictions, and subsequent cost increases does not require localizing production altogether but it does require companies to revisit their globalized, highly interconnected supply chains. Moreover, the COVID-19 health emergency is revealing the effects of disruption on these globalized supply chains. To address these issues, leaders should consider some or all of the following:

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1. Consider suppliers from other countries besides China and Mexico, where doing business is becoming more complex and expensive. Alternative sources include Malaysia, Indonesia, India, Thailand, Poland, Slovakia, Hungary, Ireland, and Brazil.

2. Optimise existing plants to squeeze every ounce of current capacity. Automation and digitally-enabled workflows can create that capacity, lower unit costs to more globally competitive levels, and speed customer responsiveness.

3. Redraw your global manufacturing and supply chain footprint, and reconsider alliances and strategic partnerships that can provide regional, technical, and skill-set agility. Keep in mind production costs, tax implications, quality, and delivery. There is value in shortening the overall supply chain cycle time to better adapt to changing environments.

Please select one of the three suggestions above. Discuss how your chosen suggestion will influence a firm’s operating system by detailing the key capabilities, assets, and processes that are needed for a successful implementation of the suggestion. Please also explain whether (or not) you perceive your chosen suggestion as a good and sustainable way to improve a firm’s operating system. For more information on Supply Chain check on this: https://en.wikipedia.org/wiki/Supply_chain

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