Kyu, a consultancy firm, has just published its annual barometer of the risks weighing on the supply chain. While the health crisis has dropped out of the top 10 concerns of the players questioned, geopolitical crises are fragmenting the world into blocks, and supply models are becoming regionalised. Not without risks.
The first risk cited by the supply chain managers surveyed by Kyu is the volatility of demand against a backdrop of inflation and sluggish growth. Given this uncertainty, is it necessary to replenish stocks? In electronics and telecoms, exports of integrated circuits are set to fall by 20% from China, Japan, Korea and Taiwan in 2023.
In the United States, purchasing managers frequently cite their inability to assess demand as the issue with the greatest impact on their relationships with suppliers.
In Europe, the mass retail sector is experiencing the same effects, as is the growing importance of the second-hand market. In all sectors, this trend requires suppliers to be flexible and geographically close, and companies to plan their supply chain more effectively.
Sharp rise in barriers to free trade
The second source of concern is the growing number of conflicts and tensions (Ukraine, Middle East, Taiwan, etc.). This upsurge in violence is reflected in a growing number of obstacles to free trade (sanctions, embargoes, increased customs duties, etc.).
There are currently around 3,000 of them, compared with just a few hundred 4 or 5 years ago", observes Thibaud Moulin, consultant at Kyu. We are seeing a reorganisation of flows to get round these constraints and the emergence of connector countries between the major blocks, such as Vietnam and Mexico.
In addition to these three strong trends, there is inflation (particularly in fuel prices, given the conflicts and tensions in the Middle East), cyber threats and a shortage of skilled labour, including in logistics.
In road transport, there is currently a shortage of 3.5 million drivers worldwide, including more than 2 million in China", points out Thibaud Moulin. In Asia, in Vietnam for example, fast-growing sectors are attracting textile workers who are then in short supply in that sector".
In addition, quality problems are emerging as a result of the reorganisation of supply chains with new suppliers. The climate and its impact on shipping, as well as shipping failures and increasingly stringent CSR regulatory compliance round out the top 10.
Glocal" rather than relocation
At a time when the Covid-19 pandemic has thrown supply chains into an era of uncertainty and called into question the foundations of globalisation, it is now time to turn inwards and focus on nearshoring.
"On a large scale, this movement is helping to fragment the world, contributing to cost inflation and weakening emerging countries", warns the Kyu barometer. This trend towards "glocal" (multi-local production) is strong and contradicts the prospects for reindustrialisation and relocation.
Across all sectors, 44% of the companies surveyed by Kyu want to return to outsourced activities. For Laurent Giordani, founder and director of Kyu, "relocations will only be to countries considered friendly and offering significant competitive advantages, such as Mexico for the United States and Eastern Europe for the Old Continent".
According to a survey carried out by OpinionWay for By. O Group and published on 20 January, nine out of ten French companies have no plans to relocate their activities in France.