GLOBAL LOGISTICS: KEY TRENDS AND TAKEAWAYS GLOBAL KEY AND
NEARSHORING/RESHORING More North American companies also are looking to locate operations closer to home. In early 2023, Mexico replaced China as the United States’ top trading partner, benefiting from its geographic proximity, strong manufacturing-based economy, skilled workers, and free-trade pacts, reports research firm MSCI. Along with Mexico, all of Latin America offers strong potential for nearshoring, says Rick Jordon, senior managing director with FTI Consulting. Many companies will still need to rely on supply networks based in Asia. However, as Latin American companies implement new technology, it’s possible they’ll leapfrog ahead of their Asian counterparts. REGIONALIZATION Interest in regional supply chains is growing. The idea is to “move away from thinking that we have one manufacturing hub for the whole world,” Stank says. Instead, companies can set up regional supply chains, which tend to be more agile, to support their major markets. If operations are disrupted in one area, other locations can compensate. ARTIFICIAL INTELLIGENCE “The biggest impact to the global supply chain will continue to be the use of artificial intelligence (AI),” Pitts says. Among other benefits, AI allows supply chains to maximize efficiency in ways that hadn’t been possible previously, such as maximizing space utilization on a container or a pallet. “AI allows companies to work smarter,” she adds. Given ongoing disruptions, supply chain transparency and visibility to the sources of goods will factor in planning. “AI can enhance that power,” says Melinda McLaughlin, global head of research with logistics real estate company Prologis. One company employing AI in the supply chain is Good360 is a nonprofit that distributes product donations through its network of 100,000+ vetted nonprofit partners.
As global logistics evolves, here's how shippers can adjust. Strengthen Agility Resilience remains essential, but it doesn’t mean trying to create bulletproof supply chains. “There is no such thing as being bulletproof,” says Goldsby of the University of Tennessee. Instead, resilience should take the form of agility, or developing options before they’re needed. Plasticity, or the ability to make rapid structural changes, such as sourcing in new locations, is also necessary, he says. Understand Geopolitics Supply chain leaders today need to understand a range of subjects, including geopolitics, economics, and cybersecurity, Goldsby says. “They have to be global citizens and understand that what takes place in, say, Indonesia could very much influence their supply chains and business,” he adds. Create a Task Force More than three-quarters of respondents to BDO’s Global Risk Landscape 2023 indicated that the risk landscape is shaped more by connections between risks than individual risk factors. Addressing these connections requires a company-wide focus. Assemble an enterprise-wide task force to take a control tower view of the supply chain, advises Tony Nuzio, founder and chief executive officer with ICC Logistics Services Inc. It should be cross-functional and include employees from all levels. Employees on the ground might be best suited to identify, for instance, suppliers that are critical to production, even if the company purchases relatively small amounts from them. Task force members can run scenarios and assess how prepared the company is for them, he adds. Beef Up Cybersecurity Nearly three-quarters of cyber incidents include a human element, such as an employee clicking a phishing link, according to Infosec, a cyber security training company. Employee education is key to preventing attacks. “All it takes is one person in the organization to click on something they shouldn’t, and then the entire company is exposed,” says Nathan Johnson from consultancy GLCS. Another essential safeguard is multifactor authentication, or requiring users to present two pieces, or factors, that show their identity before they can access a system. Find Partners or Platforms The very largest companies may have the resources they’ll need to manage the evolving global logistics environment by themselves. Many other organizations will need to work with partners and/or platforms to achieve the benefits of scale, says Prologis’ McLaughlin. NAVIGATING EVOLVING GLOBAL LOGISTICS
36 Inbound Logistics • March 2024
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