Strategic fork

The world is at a historic crossroads. The outcome of the US presidential election will have a major impact on import tariffs and thus on global trade and international supply chains. Additionally, the re-election of Donald Trump will affect US military support to Ukraine. The gruelling and protracted battle on Ukraine’s eastern front will potentially see escalation due to the involvement of North Korea on the Russian side followed by South Korea on the NATO side.

According to a new report by UK research organizations the Royal United Services Institute and the Open Source Centre, the most effective way to disrupt Russia’s war effort in Ukraine is to boycott its artillery supply chains. Indeed, artillery plays a central role in Russia’s invasion of Ukraine and causes more than 70% of Ukrainian military casualties. Russia’s attack capability can be significantly weakened by reducing access to key materials for howitzers and ammunition from specific suppliers in South Africa and Kazakhstan, among other countries, according to the report titled ‘Ore to Ordnance: Disrupting Russia’s Artillery Supply Chains’.

The war in Ukraine, the stagnating Chinese economy and tighter European regulations are the main geopolitical reasons for large international companies to transform their supply chains. Unfortunately, another recent international survey, by consultancy firm Efeso and Supply Chain Media, shows that many of these multinationals lack a clear business strategy. Three quarters of respondents want to increase their company’s resilience, while at the same time half want to reduce supply chain costs. This is an almost impossible feat, which does not really reflect a sound strategy.

Strategic fork in the road

In World War II, American general Omar Bradley said: ‘Amateurs talk about strategy and professionals talk about logistics’. In other words, strategic thinking is essential, but success is ultimately determined by the practical execution of a plan. Now more than ever, within executive boards, it is the task of supply chain directors to clarify the business strategy per customer segment and to translate those strategies into different supply chains. Only with such a clear battle plan can companies choose the right direction at the strategic fork in the road to get through these uncertain times successfully.

Martijn Lofvers, Chief Trendwatcher Supply Chain Media
martijn.lofvers@supplychainmedia.nl