Strategic Intelligence: Demographic Trends Impacting Supply Chains

Strategic Intelligence: Demographic Trends Impacting Supply Chains

Summary

A supply chain comprises the activities and processes that organizations perform to manufacture and deliver goods and services to consumers. Supply chain disruption occurs when these processes are compromised. The global supply chains organized to optimize profit and speed for over two decades were flipped upside-down by the COVID-19 pandemic. Companies had to adopt a just-in-case strategy for their supply chains where hoarding inventory offered a safety net for unforeseen supply chain disruptions. This approach has eased in favor of long-term strategic moves to bolster supply chains as businesses learn disruptions to supply chains are here to stay.

Key Highlights

• Reworking supply chains is complex and expensive, with no quick fixes. Instead, long-term strategic actions to increase the resilience of supply chains are needed. Regionalizing supply chains, working with more than one supplier, and incorporating digital technologies, such as intelligent automation and robotics, are the best ways to mitigate the impacts of supply chain disruption. In this way, businesses can prioritize the safety and reliability of supply chains over profit, an essential move as slowing growth and increasing conflict are making companies' operating environments riskier, more complex, and more costly.
• As nations globally transition from high birth and death rates to low birth and death rates, aging populations are inevitable. This demographic transition will impact global supply chains on multiple fronts, with increased labor shortages across industries, changing consumer demands from ethically-minded and tech-savvy younger generations, and social unrest and political tensions rising in states using migration to replenish their aging populations. Therefore, businesses must act to future-proof their supply chains.

• The COVID-19 pandemic flipped supply chains upside down. Businesses shifted to a just-in-case model and began keeping a minimal inventory level to avoid losses from unforeseen supply chain disruptions. In 2023, despite growing supply chain risks, some companies reverted to just-in-time as pandemic-related disruption abated and high interest rates and high inflation made it more expensive to carry large inventories.
• Since the pandemic, long-term strategic actions have been taken as businesses and nations focus on near- and reshoring, dual-sourcing, and digitalization of supply chains to improve resilience as disruptions inevitably continue.

• 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.