Companies continue to expand and diversify their supply base and invest in technology solutions to deal with global supply chain challenges, according to a recent report from Berlin-based financial technology firm Modifi.
The company’s H2 2022 Predictions Report examines the state of the logistics industry and its impact on global trade and the supply chain, based on input from the company’s regional business leaders. A shortening of supply chains and a heavier focus on technology are among the key trends shaping the business landscape, according to the report.
Geopolitical issues, economic factors, and labor challenges are driving much of the change and fueling investment in new regions.
“The crisis in Ukraine and Russia, as well as other supply chain disruptions, such as Covid-19 lockdowns, staffing shortages, and labor unrest, have caused many businesses to look at more localized manufacturing and shorter supply chains,” Brian Dowd, Modifi’s sales director for North America, said in a press release. “The accelerated transition is resulting in more companies increasing their investment in countries such as Vietnam, Thailand, and India.”
Companies are also investing more heavily in technologies that can ease challenges associated with moving goods around the world. This is especially true of U.S. businesses, according to the report.
“To combat supply chain disruptions, our experts have also identified that technology is becoming critical to supply chain success in the U.S. as businesses invest in innovative tools to provide more insight into the movement of goods and inventory,” according to the report. “Emerging technologies such as AI, predictive analysis, risk analysis and monitoring, are helping companies deal with disruptions and external obstacles by enabling leaders to make instant executive decisions within their supply chain.”
The Covid-19 crisis remains a challenge as well, primarily due to ongoing pandemic restrictions in China that are creating ripple effects worldwide. As a result, organizations remain focused on mitigating risk and building resilience to deal with anticipated delays and disruptions.
“The global supply chain market is in a period of turmoil and organizations across the world are attempting to build resilience into their systems. This means shifting to local suppliers, scrutinizing suppliers, investing in or stockpiling inventory, and investing in supply chain security,” according to the report. “Organizations in every country are using technology to transform the way they do business to secure opportunities in an uncertain future.”