24

Jan

Addressing Ongoing Challenges in Global Supply Chains

Despite ongoing efforts to stabilize supply chains, disruptions remain a persistent obstacle for organizations worldwide. McKinsey & Co.’s Supply Chains: Still Vulnerable outlines how geopolitical tensions, natural disasters, and trade restrictions continue to destabilize global networks. In 2024, 90% of companies reported ongoing supply chain challenges, highlighting the critical need for robust strategies and solutions.

Evolving Strategies for Resilience

Companies are making strides in adapting to this challenging landscape:

  • Dual-Sourcing and Regionalization: 73% of companies are advancing dual-sourcing strategies. While 60% are regionalizing their operations to minimize risks.
  • Enhanced Visibility: The percentage of companies achieving comprehensive visibility into tier-one suppliers has risen to 60%, making steady progress for the second consecutive year.
supply chains

Talent and Inventory Management Remain Key Issues

While progress has been made, challenges persist:

  • Talent Shortages: A lack of skilled talent continues to hinder digitization and transformation efforts, with 90% of companies reporting a gap in capabilities – a figure unchanged since 2020.
  • Adjusting Inventory Strategies: Companies are moving away from temporary measures, such as oversized inventory buffers, which have dropped from 59% to 34%. However, nearly half of organizations plan to maintain current inventory levels while optimizing assortments and locations.

The Need for Stronger Risk Management

McKinsey’s research reveals that only 25% of companies discuss supply chain risks at the board level, leaving many vulnerable to disruptions. To address this, organizations should conduct board-level risk reviews, integrated risk analysis into planning, and publish detailed risk reports for transparency.

Looking Ahead

Addressing supply chain challenges requires a balanced approach, combining strategic adjustments, improved risk management, and investments in talent and technology. Companies that focus on resilience, visibility, and collaboration will be better positioned to navigate disruptions and maintain stability in a rapidly evolving global landscape.

Tara Briody, Vice President of Business Development

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