Supply Network Reconfiguration and Digital Supply Networks

COVID-19 has accelerated some trends already in place and highlighted others in terms of reconfiguring global supply networks. The pandemic underscored the dependence on single regions and the risks of concentration of supply capacity. It is still early to distinguish precise patterns and strategies will vary by country, region, product, and company, but we can identify some general trends and strategy. I addressed these issues in a recent talk to a global audience comprising participants from nearly all continents.

I contextualize the impact of COVID-19 on global supply networks in the face of previous outbreaks, prior disruptive crisis, and other market forces already at play when the current pandemic emerged. Mainly, I briefly discuss the impact that each last major crisis had on the configuration of global supply networks. I then provide an example from a highly concentrated global supply network in the high tech industry and discuss factors that help you understand various business forces playing out in the reconfiguration, including interpreting the CHIPS for America Act, for instance.

I mention the possible emergence and expansion of new supply hubs and the need for crucial investments by regions attempting to enter the global value chain. One of the most straightforward points is that leaders can build more resilience in the system through multiple supply points, but the issue is more complicated. Making the network more agile and creating digital capabilities for end-to-end visibility and agility are possible paths as we move forward. The video recording of my talk is below. I share thoughts on the effects of COVID-19 on the global configuration of supply networks and supply network digitization.

I conclude with three major reconfiguration trends, the continued role of China due to its market size and complex high-value supply network, and the impact of the pandemic on digital transformation.

I invite you to share thoughts or experience in the topic using the comment box below or by connecting with me.