Disruption, Digitisation, Resilience

30 DISRUPTION, DIGITISATION, RESILIENCE : The future of Asia-Pacific supply chains There clearly seems to be less panic among Asian supply-chain managers, who are more bullish about the prospects of globalisation, while supply- chain managers in the West could be pulling back from very long and very global supply chains that have developed over the decades. An extensive overhaul of supply chains may not have eventuated, but covid-19 has nonetheless has brought about a renewed focus on resilience. Changes are afoot to make supply chains in the region more resilient to future shocks with a view towards securing the sustainability of business operations in the long term. This is important, given the full impact of the trade and tech tensions between China and the US is not yet known and broader uncertainty remains. To support this endeavour, the vast majority of companies are investing in technology, and digital tools and processes. Industries are responding differently to the range of challenges they’ve faced over the past 18 months, but all with a common goal in mind — making supply chains more resilient. Mr Olson points to this shift to resilience as probably the most important takeaway from the pandemic: “we let the pendulum swing a little bit too far in the direction of trying to reap economic efficiencies, at the expense of stability and resiliency in our supply chains. I do expect to see the pendulum start to swing back a little bit.” That the covid-19 pandemic severely disrupted supply chains in Asia-Pacific and beyond is undisputed, but it is evident the impacts of the disruptions began to wear off fairly quickly in the region, and that companies with supply chains cutting through Asia responded swiftly and deftly to make sure the disruptions did not hamper operations for long. We let the pendulum swing a little bit too far in the direction of trying to reap economic efficiencies, at the expense of stability and resiliency in our supply chains. I do expect to see the pendulum start to swing back a little bit. Stephen Olson, senior research fellow, Hinrich Foundation As a result, there hasn’t been a fundamental shift in, or restructuring of, supply chains in Asia- Pacific. In the short-term, we’ve seen a range of responses from companies to manage their supply chains better. While smaller companies have focused on localising their supply chains, larger firms are looking to diversify them further to reduce dependence on a limited number of sources. And where there is a considerable focus on regionalisation and diversification among supply-chain specialists in North America and Europe, there is less of a focus on this in Asia.