6th Supply Chain Risk Barometer: the supply chain and the challenge of deglobalization

The year 2024 will have been marked by the definitive closure of the globalization cycle, driven by the universalization of the market economy and the lowering of borders. The election of Donald Trump in the United States, the rise of nationalism in elections in Europe and elsewhere, the intensification of conflicts in the Middle East and Ukraine, the expansion of the BRICS... usher in a new era, dominated by rivalry between powers, the return of the central role of states and protectionism.

The report offers a sector-by-sector analysis highlighting the specific challenges faced by different industries, and identifies the top ten supply chain risks to 2025. Topping the list are geopolitical crises, rising costs, demand volatility, cyber attacks and supplier bankruptcies. These risks are analyzed in detail in the report, offering a clear mapping of future threats and the solutions favored by players in each sector.

So, faced with these challenges, combined with the need for an accelerated ecological transition, it is imperative for companies to rethink their models. They must continue to strengthen the resilience of their supply chains by diversifying their critical sources and reducing dependence on key zones, while complying with growing sustainability requirements.

It is now essential to build robust supply chains, which means proactively managing risks throughout the value chain, strengthening ties with strategic partners, diversifying critical supply sources, and increasing flexibility in managing requirements, thanks in particular to the integration of advanced technologies, to gain visibility and responsiveness in the face of disruption.

This necessary, albeit costly, transformation also represents a strategic opportunity: to gain competitive advantage in an unstable environment through agile, sustainable value chains.

However, it is important to note that we are not going to wipe out 30 years of globalization and de-industrialization with a wave of a magic wand. The idealized world in which we would have the capabilities to guarantee independence and growth does not exist. Capacities and skills have disappeared too long ago to be reconstituted so easily. To be viable, relocations must first and foremost be competitive if they are to be profitable. Companies are now just as dependent on the suppliers they have sourced in low-cost countries, as they are on the consumers in these same countries to whom they sell their products.

Today's supply chains are the product of a globalization that has come to an end, and are now exposed to a new geopolitical and climatic situation, forcing them to adapt at breakneck speed. To achieve this, they need to source competitive alternative suppliers in new, less risky zones, encourage their strategic suppliers to locate capacities close to consumption basins, and activate local circularity loops that create new added value.

This is a necessary investment if we are to have robust Supply Chains capable of meeting the challenges of a multi-polar, uncertain world. Companies need to prepare for these changes now, and adapt their supply chain strategy accordingly, in order to remain competitive and resilient in this new global environment.