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G7 Summit Call for Supply Chain Diversity


To highlight several supply chain articles that have been released and stood out this week in the media. RJM has discussed this weeks news with supply chain professionals we are constantly in touch with ..



G7 finance leaders pledge financial stability and supply chain diversity


Action will be taken to present low and middle income countries with a bigger role to diversify supply chains to make them more resilient. This topic has been in the news frequently encouraging APAC countries not to be so reliant on country and to spread out and diversify their supply chains across the region. Easier said than done and sounds great in practice. Similar ideas discussed during the trade war 4 years ago. Supply chain businesses attempting to diversify their supply chains at the time reported a different level of quality when comparing China suppliers and supply chain partners of other countries. Other options in the region in comparison to China may be more cost effective but are in favourably compared in terms of general quality which supply chains could not go without.


Certainly it make sense to diversify a supply chain rather than placing all eggs in one basket. On paper it is a far better strategy for addressing supply chain risk. However it is not so easy in practice when different supply chain partners will have different strengths, weaknesses and not always able to achieve on time deliveries with the desired quality levels of service and on budget. Diversifying across multiple countries is a good plan but new partners must be assessed in terms of their compatibility and competence , are they going to be able to make the grade? Do they have shared values , a compatible culture, embrace team work and required technology? If not, this in itself is a risk to a supply chain even if in theory and on paper diversifying sounds very rosy but is it a safer option compared to only using one nation or partner due to their performance level. The situation is complex and there os no easy decision.


The G7 group have expressed their concern regarding highly concentrated supply chains in a single country not specifically naming China or trying to encourage supply chain concentrations away from China. Supply chains performed well and if companies are attracted to centralising their supply chains in one country it produces great economic benefits for the country performing well in hosting supply chains. These include maintaining macroeconomic and mainly making eco mines more sustainable.


Supply Disruption Seen As Biggest Risk to Growth & Attracting Investments


A survey conducted by Capgemini of over 2000 companies in 15 countries identified the above as the most likely factor to drag down growth in the next 18 months. There is a major concern surrounding increased prices of raw materials and an energy crisis. This has resulted in an increase in interest in supply chain technologies seen as the solution to promote agility , transparency and visibility. This leads to a whole host of challenges. Supply chains introducing new technologies need to decide the level of their investments and other what period of time to achieve an ROI. How should they implement a supply chain transformation involving new technology? Therefore, supply chain businesses that will thrive will be in a constant state of change and transformation to achieve innovation. Those companies adhering to the status quo will die a slow or more likely quick death due to  economic challenges and will not be able to continue operating. Cybersecurity is another topic that stems from this situation as supply chain businesses utilise cloud , data and analytics. Once again the topic of diversifying, onshoring and nearshoring and not concentrating a supply chain manufacturing facilities in one single geographic region. European supply chains are leading the diversification charge.


RJM is seeing a trend for supply chain businesses to invest in talent able to act as change agents and lead transformations. It is not only a case of getting through the next 2 or 3 years but staying relevant in the future in general. Supply chain business that invest now in efficiency and sustainability and overall improvement will create a competitive advantage in the future. Such talent will not only be supply chain and tech savvy experts but will understand the need to change, and implement by utilising excellent planning, commitment, persuasion and communication skills. Such managers operating in this area will understand the concept of managing stakeholders and their expectations as well as change resistors and how to overcome them.


To discuss supply chain global transformational talent reach out to Robert …Founder RJM - rjmaguire@rjm-associates.com

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