Resilience and access to alternative supply chain options have overtaken cost reduction as the main drivers of strategy for 84% of chief supply chain officers surveyed by DP World’s Global Trade Observatory.
The report, Rewiring Global Trade: How Chief Supply Chain Officers are Building for Growth, draws on responses from 103 executives across 14 markets and nine industries.
Recent tariff changes are reshaping investment, sourcing and supply chain decisions for 90% of respondents while 83% expect tariff uncertainty to continue influencing their strategies for the foreseeable future.
Businesses are planning changes across sourcing, stockholding and production. Over the next year, 71% of respondents plan to diversify their supplier base and 59% expect to increase inventories.
A further 57% plan to move operations closer to their home markets, known as nearshoring, while 48% intend to shift operations to allied or partner countries (friend-shoring).
The most common combination of planned changes, selected by 22% of respondents, involves diversifying suppliers, increasing inventories and nearshoring simultaneously.
Alternative routes gain importance
Access to alternative and multimodal trade routes is becoming a competitive advantage for 86% of respondents.
The ability to switch routes and transport modes can help businesses respond to disruption while balancing costs, delivery times and market access, the report states.
Regional warehousing hubs have become part of that approach at Unilever International, according to Muzammil Ahmed, its Head of Supply Chain for the Americas and Global Foods. Over the past five to six years, the business has moved from a back-to-back supply model towards establishing hubs in Panama, Rotterdam and Singapore.
“From these central consolidation points, we deploy multimodal freight – combining ocean, rail and long-haul road transport depending on customer lead times, border constraints and channel requirements,” Ahmed said.
A disrupted healthcare shipment illustrates how alternative routes can protect delivery commitments. Cargo blocked by conflict in the Middle East was moved overland to North Africa before being flown to Malaysia, according to Gajaindren Nair, Senior Procurement Lead at Siemens Healthineers.
“We transported the cargo overland across land borders from the Middle Eastern port to a city in North Africa. We then airfreighted the cargo from North Africa directly to Malaysia to satisfy a strict Ministry of Health installation timeline,” he said.
Although rerouting and airfreight carry additional costs, maintaining business continuity and meeting commitments can provide a competitive advantage, Nair said.
The capacity to carry more inventory varies by company size. Among surveyed organisations with more than 1 000 employees, 80% plan to increase inventories, compared with 44% of those employing between 50 and 250 people.
The report suggests that greater financial capacity may allow larger businesses to hold more stock while smaller companies may face tighter working capital constraints.
Visibility supports growth
Digital integration and end-to-end supply chain visibility are the most frequently selected capabilities needed to support growth over the next three years, cited by about half of respondents.
Lower-carbon supply chains follow at 38%, access to multiple international markets at 36% and faster customs processes, compliance and market access at 35%.
“In large multinational healthcare organisations, operating across extensive supplier pools, global customer bases and diverse product categories creates immense complexity. Without end-to-end visibility and data integration, operations can stall,” Nair said.
Emerging markets are becoming more important to business growth strategies for 84% of respondents. The report notes that entering these markets requires an understanding of customs requirements, transport infrastructure, distribution networks and inventory needs alongside the commercial opportunity.
Despite trade policy uncertainty and geopolitical tensions, 97% of the executives surveyed are optimistic about the outlook for global trade over the next year.
Building more flexible supply chains nevertheless carries trade-offs. Additional suppliers, higher inventories and alternative routes can increase costs and complexity, the report cautions, requiring businesses to decide which options are worth maintaining before disruption occurs.
