In a new report, the consultants at Capgemini predict that for most companies local suppliers will be the majority in just three years.
Supply Chain Digest Says... |
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| 45% said their supply chain cost basis had increased over the past three years in order to gain higher resilience, sustainability, and customer-centricity. |
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The report says that the current split between global and local (in country) suppliers is 57% to 43% respectively.
But Capgemini that 25% of global trade will be relocate in the next three years, resulting in an also exact reversal of current sourcing, with local supply making up 57% of the total and 43% global. (See graphic below).
The report says that “Organizations are pivoting their supply chains towards more local and regional suppliers and manufacturers.”
Houssam Hage, SVP of supply chain of automotive company Stellantis and contributor to the report, said: “Stratetic sourcing may be considered as local, to ensure there is no dependence on any war-constrained countries or vulnerability to supply chain disruptions, such as the recent blockage of the Suez Canal.”
The research involved a survey of 1,000 supply chain executives at large enterprises in consumer products, retail, manufacturing and life sciences across 13 countries.
It also found that 92% of companies said the on-going relocation of the global supply chain have had a major impact, but only 15% were equipped to deal with it.
And 45% said their supply chain cost basis had increased over the past three years in order to gain higher resilience, sustainability, and customer-centricity.
The report says what is calls “supply chain masters” comprise 9.5% of respondents and are characterized by their ability to successfully balance multiple demands on their supply chains. That capability on average saw the masters achieve 15% higher revenue growth compared to the other companies.
Mayank Sharma, global supply chain lead at Capgemini, said in press release relative to the new report that “The last few years have highlighted the need for organizations to build agile and resilient supply chains, not only to cope with disruptions but also to help them stay ahead of the curve, especially from a sustainability perspective.”
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Sharma added that “It is clear that there’s no one-size fits all solution, but organizations that lay the foundation for a data-driven, technology-enabled, scalable, and sustainable supply chain are the ones that will reap the most impressive returns in terms of driving improved customer loyalty, creating more business value and meeting sustainability goals.”
The full report, which is actually around the broader topic of supply chain excellence, can be found here: How greater intelligence could supercharge supply chains.
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