Global supply chains: The race to rebalance

November 16, 2023

Economic volatility driven by inflation, energy crises and geopolitical tensions – among other forces – have created a new reality for business leaders. There’s a global race happening right now as businesses look to rebalance their supply chains and seek new suppliers, locations and talent. It’s no longer enough to focus on resilience and short-term profitability. Businesses need to transform to survive and grow.

Rarely in history have business leaders dealt with as many challenges as the last three years, each uniquely complex and compounding. And never before have leaders had to respond to them all at once.

CEOs and the wider leadership team must now be diplomats to deal with geoeconomic and polarisation issues, crisis managers to quell angry customers when supply disruption limits product availability, purpose evangelists to retain talent, socially conscious to view decisions through an ESG lens, digitally literate to drive transformation, all while having the risk tolerance for business model reinvention.

It’s no longer enough to focus on resilience and short-term profitability. Businesses need to transform to survive and grow.

Fortunately, despite the global turbulence, Asia Pacific is weathering the storm. Over the next decade, 70% of global growth will come from Asia Pacific. The region is set to have the highest aggregate consumer expenditure by 2030 and is home to some of the largest consumer markets.

There are three fundamental questions that we believe businesses need to consider when repositioning their supply chains for growth:

The supply chain is no longer an operational concern; it is a strategic asset that holds the key to success in turbulent times. Competition for suitable sites, suppliers and talent is intensifying as more global businesses look to Asia and elsewhere, for sourcing and production.

Technology adoption should be aligned with overall business strategy to ensure digital investments contribute to long-term growth and competitive advantage. Transforming your linear supply chain into one digital ecosystem is the gold standard.

Sustainability is now a value driver, not a cost. Embedding ESG principles into your business ensures long-term viability in a changing world. Businesses are increasingly expected to understand, report on, and take steps to prevent actual and potential human rights impacts and modern slavery violations in their global supply chains.

Continuing global turbulence has only exacerbated the supply chain crises of the COVID-19 years, creating a race for new suppliers, locations and talent, and highlighting the pressing need for more wholescale strategic transformation. Despite these challenges, Asia Pacific is still primed for growth. Businesses that differentiate themselves to win this race, while using advanced technologies and ESG to their advantage, will see future success secured. Find out more on practical steps that CEOs can take to rebalance for growth.