In the Citi GPS Global Supply Chains: The Complicated Road Back to “Normal” report published in December 2021, we examined the multiple challenges that have afflicted global supply chains. We concluded that supply chain conditions remained remarkably tight, but we saw reasons for hope that the situation might improve over the course of 2022.
The Complexities Multiply
How Did We Get Here?
Supply chain disruptions have quickly escalated across the globe. The primary driver is the demand for goods far exceeding supply as consumer spending shifted away from services during the pandemic. We note six key macroeconomic drivers:
Relieving the Stress
Current supply chain tensions will not be solved simply by waiting for supply to "catch up." To relieve the stress in global trade, we ultimately need to see an improvement in the pandemic and in the Russia-Ukraine conflict. Some specific supply chain issues are beginning to unwind by there are a number of lingering unknowns.
Future Supply Chain Management Strategies
Given the vulnerabilities in supply chains exposed by the pandemic, many firms will feel obliged to review the pandemic's lessons and make adjustments in their operations. Potential areas of focus include: