In an era marked by unprecedented challenges and disruptions, supply chain leaders worldwide are navigating a complex landscape of uncertainties. Among the myriad concerns that have emerged, high inflation has taken center stage. According to a recent global report from the Thomson Reuters Institute, a staggering 33% of supply chain leaders have identified high inflation as their top strategic priority for the years 2023-24. This revelation is a testament to the profound impact of inflation on the global supply chain ecosystem.
Unpacking the Insights from the 2023 Corporate Global Trade Survey Report
The Thomson Reuters Institute’s 2023 Corporate Global Trade Survey Report delves deep into the minds of over 175 trade professionals hailing from diverse regions, including the US, Canada, Mexico, the European Union, the UK, and Latin America. The report seeks to unravel the intricate web of disruptions and technological advancements within the global trade sector. Notably, the respondents in this survey predominantly consisted of upper-level executives, directors, and managers, each playing pivotal roles in various aspects of global trade such as operations, logistics, procurement, supply-chain management, and compliance.
Prioritizing Strategies Amidst Constant Disruptions
The survey report paints a vivid picture of how companies are strategically positioning themselves to combat the relentless waves of disruption. Inflation, rising costs, supply-chain shortages, international conflicts, regulatory changes, and transportation issues loom large on the horizon. Additionally, technology emerges as a critical ally in managing and mitigating the risks posed by this uncertain trade environment.
The Four Key Challenges Faced by Global Trade Professionals
Through meticulous analysis, the report identifies four overarching challenges that currently plague global trade professionals:
- Disruption: The ever-present spectre of disruption casts a long shadow over the industry. Supply chain leaders are grappling with the need to adapt swiftly in the face of unforeseen events.
- Talent and Knowledge Gap: A consistent lack of qualified talent and expertise is a pressing concern. Notably, more than half of the surveyed companies are outsourcing certain aspects of global trade or supply-chain management due to the scarcity of qualified personnel.
- ESG Reporting: Environmental, Social, and Governance (ESG) considerations are gaining prominence. A striking 88% of businesses are now collecting ESG-related data from their suppliers at least once a year, emphasizing the growing importance of sustainable practices.
- Technology Usage: Technology, particularly in the realm of supply chain security and data protection, is rising in significance. A substantial 62% of survey respondents have identified supply chain security and data protection as their top technology priority in 2023.
The Evolving Landscape of Technology
Technology, as a critical enabler, deserves special attention. Companies with revenues exceeding $100 million are proactively implementing technology upgrades to meet the escalating demands for data and reporting. This underscores the pivotal role of technology in enhancing the resilience of global supply chains.
Inflation and Escalating Costs: A Dual Challenge
While inflation stands as the foremost concern among supply chain leaders, the spiraling costs of doing business are equally alarming. Retaliatory tariffs, exemplified by the ongoing US-China trade tensions, have started to exert significant pressure on costs. In the UK, the introduction of the Customs Declarations Service has created hurdles for 75% of companies.
ESG Reporting: A Beacon of Optimism
Amidst the array of challenges, ESG reporting shines as a beacon of optimism. A remarkable 88% of businesses now gather ESG-related information from their suppliers on an annual basis. ESG considerations have become a major factor in supplier selection, reflecting a global shift towards sustainability.
The Nuances of ESG Data Collection
Delving deeper into ESG reporting, the report highlights the various dimensions of data collection. This encompasses health and safety data, supplier business ethics, carbon emissions, human rights violations, and energy management. Additionally, a significant number of companies are monitoring supplier employee diversity, underscoring the comprehensive nature of ESG reporting.
Balancing Act: ESG Reporting and Corporate Values
While ESG reporting introduces new responsibilities for global trade professionals, it also aligns with a company’s values, ethics, and reputation. This alignment underscores the significance of ESG reporting as a reflection of corporate ethos.
Navigating Uncontrollable Forces
Many of the challenges faced by supply chain professionals are beyond their control. Global inflation, escalating transportation costs, and constantly changing rules and regulations add layers of complexity. However, there is hope on the horizon, as more companies invest in technological solutions to navigate these challenges effectively.
In conclusion, the Thomson Reuters Institute’s comprehensive report paints a multifaceted picture of the challenges and opportunities facing supply chain leaders in 2023. Inflation emerges as a top concern, but it is just one facet of a complex global trade landscape. As companies adapt, innovate, and harness the power of technology, they position themselves to thrive amidst uncertainty and emerge as resilient leaders in the ever-evolving world of global trade.