Global Supply Chain Review: April 2017

Global interconnectedness has been an unavoidable topic, shaping all supply chain events this month. Whether considering economic growth or crisis, import or export, rising nationalism and attempts to develop international partnerships, leaders in supply chain will recognize that developments in the field are never isolated to one nation.


US: “Buy American / Hire American” is this month’s catch phrase, following President Trump’s executive order to that effect. But as the country reconsiders the uses of the H1B Visa or the positioning of auto factories, some industries are expressing concern that their supply chains will make it nearly impossible to comply. Not only are tech companies in a position to justify their need for the H1B at a time when there aren’t enough Americans to fill all positions, automakers are expressing concerns that reshoring their supply chains will make cheaper foreign competitors more attractive to consumers.


UK: The UK supply chains are facing new pressure. As the pound drops in value in the wake of Brexit, rising food and energy prices are straining food suppliers, as well as transportation and logistics businesses.   Analysts are predicting that these costs will continue, and that they will trickle down and increase costs for restaurants and retailers. The issues are unlikely to improve while uncertainty over the UK’s trade relationship with the EU persists.


France: Despite being the EU’s third largest economy, France has recently continued to be plagued by high unemployment and deficits, struggling to recover after the financial crisis of 2008. These concerns are of primary importance to the nation’s presidential candidates, and the EU waits to see whether the French will bet on the far right or far left candidate to jumpstart new economic growth.


Germany: Germany’s new offshore windfarm project has announced it will partner with Northern Ireland-based firm H&W to establish a UK supply chain. Called the Borkum Riffgrund 2 wind project, the farm is under construction in the North German sea and is pulling together supply chain partners from across the EU.


Greece: After years of a serious struggling economy and referenda on austerity, the Greek economy is showing signs of growth. The IMF’s most recent World Economic Outlook Report shows that there has been a 2.2% increase so far this year, and the trend should continue through next year as well. The question remains if this will be enough to pull Greece from the brink of collapse, and to what extent it can push through its current heavy influx of migrants and the swirling questions about the future of the Euro.


Japan: Facing the realities of an aging and dwindling workforce, Japan is pushing for the more rapid mainstream introduction of autonomous vehicles. In contrast with other nations, which have been slower to test and adopt the technology, Japan is recognizing that self-driving cars will have dual benefits. In addition to assisting an aging population to travel safely, the vehicles will serve to fill in gaps left behind as workers in transportation jobs retire.


China: China has launched a supply chain platform that promises to produce more lean efficiency across the pharmaceutical industry. Through a partnership between IBM and Heija, this new program (Yijan Blockchain Technology Application System) will improve payment systems as well as ensuring greater transparency in tracking, flow, and quality control.


South Korea: The nation has an eye on global trade partnerships, and how its economy will be affected if and when its most important trade allies come to conflict. With ¼ of its exports going to China, South Korea’s economy will suffer if the US reduces or limits its trade with China. If the US does this, and China responds by imposing counter measures, even greater losses would occur.


Indonesia: Seeking to grow its sustainable agriculture industry, Indonesia has partnered with France through the Sustainable Agricultural Landscapes in Southeast Asia platform (SALSA) to develop a more transparent and traceable supply chain. As a top producer of palm oil, which has caused international concerns linked to deforestation among other sustainability issues, Indonesia is optimistic about the improvements that will result.


Venezuela: Protests, violence, and now the seizure of a GM plant by the government are pushing Venezuela deeper into crisis. Already noted as one of the world’s worst economies, the nation is beginning to force out foreign companies, all the while facing soaring inflation and food shortages. Manufacturing and energy sectors near collapse as inflation hits 455%.


Brazil: Brazil is reinventing its economy—and the project is having positive impacts. Stocks are rising, and the economy is showing its best growth since 2010. This is positive news, but the IMF does note that for the trend to continue Brazil will need to reform multiple unsustainable practices, including how it operates social security.


Mexico: Regardless of the heightened rhetoric against immigration and global trade coming from its neighbor to the north, Mexico maintains strong ties with the US. The tight supply chain integration between the two nations makes modern updates to NAFTA mutually desirable; and Mexico has no plans to curb its purchase of over $20 billion of US exports annually.



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