June 3, 2024 | less than a minute read

How should companies think about supply-chain shifts?

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Hanny Widjaja

VP Global Business Assurance and Food Services

Get in touch

Hanny Widjaja

VP Global Business Assurance and Food Services

Concept Growth of transport and logistics. symbols of Container cargo ship, airplane, cargo truck

An important shift is underway in the global economy - the relocation, diversification, and reshoring of supply chains to various destinations.

In recent years, these trends have only been accelerated by the COVID-19 pandemic, increasing geo-political tensions, and global supply chain disruptions. This has pushed companies to further prioritise resilience and diversification over cost and efficiency, prompting them to look for new outlets for their production and sourcing.

Doing business in new countries can raise new, equally complex concerns. As companies diversify their supply chains, they must understand the risks associated with alternative markets – some of which might be less familiar. New markets may bring challenges like financial crimes, human trafficking, terrorism, bribery, or other risk events.

Intertek Supply Assurance services play a crucial role in mitigating these complex concerns, offering comprehensive risk assessments and monitoring to ensure safe and ethical operations in new markets. By leveraging Intertek's extensive global network and expertise, companies can confidently navigate the challenges of diversification, ensuring compliance and sustainability throughout their supply chains.

For more information, please visit Supply Chain Assurance.

Unlike the relocation of capital or information, supply chain shifts involve complex, interdependent actions. Among the different motivations for these shifts, China’s manufacturers have to contend with the rise of the China Plus One strategy - a parallel supply chain model. In an interconnected world, the resilience of China’s supply chains serves as a reminder of the importance of global specialisation and the need for collaborative efforts to address shared challenges. Just as it is impractical for multinational corporations to entirely exclude Chinese suppliers, China cannot afford to fully localise production, risking the loss of knowledge exchange and capacity upgrading from foreign enterprises. As global supply chains evolve, a balanced approach that fosters fair competition, regulates market entry and promotes global standards is essential for sustainable growth and mutually beneficial trade relationships.