As companies prepare to shore up against the various factors influencing global supply chains, they are increasingly looking at localisation as a way to build business resilience. This has created a complex environment for global players, says Hitendra Mankani, Chief Commercial Officer, DB Schenker India.

As the world gets increasingly interconnected, we are seeing how global supply chains are the cornerstone of international trade. Not only do they connect businesses and consumers across borders, but industries ranging from pharmaceuticals and automotive to consumer goods and technology rely heavily on them.  However, as per the KPMG 'Future of Supply Chain' survey conducted with more than 300 global supply chain professionals, only 55% of the respondents described their supply chain as stable and 47% believed they were vulnerable to disruption.

The last few years have been very volatile for global supply chains, with ongoing geopolitical developments presenting multiple challenges.  

In particular, the trade tensions between major economies have caused companies to rethink their sourcing strategies.

As companies prepare to shore up against the various factors influencing global supply chains, they are increasingly looking at localisation as one way to build business resilience. This has created a complex regulatory environment for global players. Industries must work towards complying with local laws, navigating differences in digital tax regimes and environmental standards, while maintaining global operational efficiency. 

Building a robust, agile, and resilient supply chain is a long-term mandate. However, global as well as financial pressures have a role to play in the strategies pursued by enterprises to ensure supply chain stability.  

Modern supply chains bridging multiple countries and industries, lead to creation of intricate interdependencies. A single disruption in any one region or industry can have a domino effect, cascading across the network, halting production, and impacting timelines. 

At the other end of the spectrum, for organisations going the digital way, it is important to note that digital supply chains, while efficient, are highly susceptible to cyberattacks. Incidents targeting critical infrastructure—such as transportation management systems or warehouse automation platforms—can cripple operations.

Add to this the rising raw material costs, labour shortages, and energy price volatility and you get profit margin erosion across industries. In such a scenario, for most organisations, balancing cost optimisation with the need for resilience is a continual challenge. 

Last, but not the least, businesses need to deliver on consumers’ and stakeholders’ expectations for sustainable practices, prompting companies to reduce their carbon footprint, source responsibly, and maintain ethical labour standards. Delivering upon these expectations often involves significant upfront investments and operational overhauls.

As organisations prepare to step into 2025, they must recognise that traditional approaches will no longer suffice. They will need to explore different paths and embrace new trends to stay resilient.

Towards this end, a key strategy that companies can adopt to counter business uncertainties is to diversify their suppliers as well as manufacturing locations. 

Next, technology is a critical enabler of resilient supply chains and businesses must evaluate new technologies to build resilience going forward. Some examples of technology enablement include predictive analytics powered by Artificial Intelligence (AI), which helps companies anticipate business disruptions and plan contingencies. Also, blockchain technology allows businesses traceability and transparency across supply chains, reducing risks of fraud and ensuring compliance. With the advent of Internet of Things (IoT), businesses have enhanced real-time visibility, enabling them to monitor goods at every stage and address potential concerns proactively. Automation, be it robotics or other advanced manufacturing technologies, accelerates productivity and reduces potential for human error. Take for example, the growing prominence of e-commerce that has spurred significant advances in last-mile delivery systems such as AI-driven route optimisation and drone technology that enhance efficiency and convenience. 

Going forward, businesses need to build more sustainability into their operations as well as supply chains, be it adopting renewable energy sources or investing in electric vehicle fleets or biodegradable packaging materials. They can also incorporate carbon accounting tools and lifecycle assessments to help them measure and reduce environmental impact.

It would be prudent to assume that going forward geopolitical, economic, and environmental challenges will continue to persist. Therefore, companies must shift from reactive to proactive strategies. Adopting advanced technologies will enable businesses to undertake faster decision-making and be prepared for greater adaptability. Also, machine learning models will refine forecasting, allowing companies to address potential disruptions well before they occur.

In addition to technology, organisations that invest in green logistics will stand out in an increasingly eco-conscious market. Emphasis on recycling and reusing materials will drive innovation in product design and logistics. Furthermore, investing in green logistics with carbon-neutral supply chains will not only meet regulatory requirements but also align with consumer expectations for sustainable practices.

To conclude, the future of global supply chains lies in resilience, sustainability, and collaboration. Businesses must adapt to geopolitical shifts by diversifying networks, embracing technology, and prioritising ethical practices. As the global supply chain ecosystem evolves, the ability to adapt remains imperative for sustainable growth and competitive advantage.

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Hitendra Mankani is the Chief Commercial Officer at DB Schenker India. He is a seasoned professional with extensive experience in the logistics and supply chain industry. He leverages his deep knowledge and expertise to drive business growth and improve organisational communication, always prioritising customer satisfaction while aligning with company objectives. DB Schenker in India is one of the leading providers of integrated logistics services in the region. It offers a complete range of international air & ocean freight and contract logistics and global supply chain solutions from a single source.