McKinsey Insists that Five Global Forces Will Reshape Your Supply Chain

… but are they right? Let’s take the five global trends they have identified as key transformational forces one by one:

  • The Great Rebalancing

    The emerging market countries will contribute more growth than the developed ones.

    Once emerging countries increase their standards of living across the board, they will no longer be low-cost countries. If you rely on low-cost countries to power your supply chain, you’ll have to find new low-cost sources of supply.

  • The Productivity Imperative

    Developed economies will need to generate pronounced gains in productivity to power continued economic growth.

    In addition, an average company will need to generate pronounced gains in productivity and efficiency to survive — including enhanced efficiency and productivity in the supply chain. As a result, an average company will have to accelerate its adoption of new processes and technology.

  • The Global Grid

    The global economy is becoming increasingly connected with increasingly complex flows of capital, goods, information, and people.

    The supply chain will have to become increasingly connected as well. This will require more communications and information technology at each and every stage of the supply chain.

  • Pricing the Planet

    Demand for resources is rising, supplies are becoming constrained, and changing social attitudes are heightening the focus on environmental protection.

    Supply chains will have fewer top talent resources, will have to focus on helping engineering identify designs that require less of those raw materials in short supply, and will have to be redesigned to decrease their environmental footprint.

  • The Market State

    The contradictory demands of market growth and safety nets is putting governments under extraordinary pressure.

  • As a result, supply chains can expect to be subjected to an onslaught of legislation in the near future as governments attempt to adapt.

In other words, McKinsey is right and the five global forces will have an effect on your supply chain. In the short term, you will have to:

  • streamline your processes,
  • adopt new technologies,
  • implement lean and minimize waste,
  • improve your ability to comply with regulations, and
  • start looking for new low cost sources of supply.

And then you’ll have to get creative.