Supply chain leaders will have an important role to play as companies move into emerging markets, a new report has said.
According to research from Gartner, strong demand planning and supply chain strategies will be crucial if businesses are to capitalise on the huge opportunities presented by emerging markets around the world. At the same time, they will be vital for companies wanting to manage the risks that come with expansion into these fast-growing economies.
But the report also finds that while chief executives acknowledge this fact, not all are convinced that their strategies are ready to support such a move. Half of the business leaders surveyed by Gartner said that they considered globalised supply chains to be more complex and fragile. On the contrary, the rest said that supply chains were actually more resilient than ever before, indicating that the level of preparedness may vary widely among businesses.
Even among those who feel positive about their strategies, there is concern about the challenges globalisation presents. A survey of some of the world’s top global supply chains as identified by Gartner found that the biggest concern for many was keeping up with changing regulations, tax arrangements and other legislation across several different territories.
Finding and developing the right talent in foreign markets was the second biggest worry for the world’s supply chain leaders, with the need to adapt supply chains to the needs of local markets coming in close behind. In general, cultural differences and language barriers are another challenge which some companies fear they will struggle to surmount.
In many of the fastest-growing economies, demand is scattered across vast and disparate geographical regions. Urban and rural locations both need to be served but with infrastructure sometimes insufficient for companies’ needs, the report says, there are still plenty of logistical challenges ahead. Similarly, political instability can limit access to some locations and, on the whole, investment in supply chains can come with considerable risk.
Fortunately, supply chain organisations are already taking steps to face these challenges and make the most of the opportunities awaiting them, working with sales and product teams to build better strategies for a globalised operation.
“Businesses are positioning to take advantage of the most explosive growth opportunity since the industrial revolution,” says Mike Burkett, research vice president at Gartner. “That growth won't come from existing developed markets but from expanding into less-developed emerging markets.”
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