Geopolitics and natural resources have an impact on the supply chain.

1. Recent Events Affecting Your Supply Chain Effects on the supply chain of geopolitics, natural resources, and those Numerous geopolitical challenges are having a substantial impact on the supply chain. Most, if not all, of these are also concerned with natural resources. For example: China's threats to Taiwan: China has escalated tensions with Taiwan to the point of threatening Taiwan. China has normalized incursions into Taiwan's Air Defense Identification Zone in the Taiwan Strait. The quantity, regularity, and risk associated with these incursions have skyrocketed, and China is now conducting naval operations well outside Taiwan's contiguous zone. You don't have to think long to figure out why Taiwan produces 90% of the world's computer chips. Not only is China the world leader in manufacturing, including various products connected to healthcare, other important industries, and national security, but its control over the South China Sea has a significantly greater impact on the supply chain than the pandemic. Watch a Supply Chain Chats video on it. Russia and Ukraine have been at odds for nearly a year with no resolution. Russia and Ukraine provide a wide range of crucial commodities for the United States and the rest of the globe, including oil (used in various critical products), food and fertilizer, and many key commodities such as aluminum, nickel, and copper. These are employed in vital products relating to national security. Watch a Supply Chain Chats video on the subject. China's Belt and Road Initiative and shopping spree: In order to "control" the world, China has been investing in infrastructure and going on a shopping spree around the world in critical locations. For example, they are acquiring terminals at key Latin American ports, investing in infrastructure in natural resource-rich areas, and rapidly acquiring farmland in the United States. Clearly, these moves are bleak for the supply chain picture. China's water: Water is in short supply on China's Northern China Plain. Water is necessary for many processes, including manufacturing, electrical generation, and drinking. If China cannot handle these challenges while maintaining its manufacturing base, it may turn to the water nearby in India. In this blog post, we go into greater detail regarding the water issue in China.

2. Natural resources and rare earth are in short supply because of improvements in civilizations, industry, and consumer expectations. In rare earth, for example, we will require more in the next 27 years than has been mined in the previous 3000 years. In terms of copper, we will require more copper in the next ten years than we have consumed throughout human history. These figures are in low supply, and the areas associated with geopolitical concerns are producing/mining these products. In a recent webinar for Supply Chain Brief, I discussed these topics in depth: Geopolitical & Regulatory topics: The Path Forward in Supply Chain and Logistics (link direct to webcast below). Action Plans Concerning the Supply Chain Obviously, hiding your head under a rock will not address these problems. Instead, we must act immediately. Perform a quick supply chain analysis to determine your risk. Your evaluation should take into account your manufacturing operations (including offload suppliers, outsourced goods, contract manufacturers, and internal sites, including their dependency on their supply chain), suppliers (including your suppliers' suppliers and further into your extended supply chain, your backup suppliers, etc.), your logistics partner network (transportation, distribution, warehousing, e-commerce), customers (and their dependencies), and your infrastructure. Upgrade your SIOP (Sales Inventory Operations Planning) processes, execution planning systems (demand, production, labor scheduling, distribution, replenishment, transportation), manufacturing operations and logistics capabilities, supply chain visibility, and related processes and systems to pro-actively manage your supply chain. You will need to keep track of problems, possible bottlenecks, and the state of your supply chain while being able to quickly adjust to changing circumstances.

3. To comprehend your footprint and the current condition of the resources and products in your end-to-end supply chain, you will need a supply chain control tower, which goes hand- in-hand with improved procedures and systems. Identify new sources of supply and backup suppliers. You obviously need to identify and expand new sources of supply, but you also need backup suppliers. Always have a backup supply source available. These vendors shouldn't be "in name only," meaning you must keep making minor purchases. For instance, when I served as the vice president of operations and supply chain at a mid-market manufacturing, we procured 20% of the raw materials we needed from a backup source. Due to our continued relationship, we were able to outbid larger corporations when that material went on allocation by sourcing from the backup supplier. No question: Reshore, nearshore, friendly-shore, and boost mining and manufacturing. We must expand our manufacturing capacity close to our clients and consumers. The secret to success in a site and logistics network that we can "control" will be production at scale. Manage demand and supply proactively: Give your SIOP (Sales Inventory Operations Planning) / S&OP process priority in order to not only synchronize demand with supply and sales with operations but also to inform your team of important strategic choices that must be made in order to satisfy your customers profitably and preserve working capital so that you can expand, invest, and seize upcoming opportunities. You may read more about SIOP in our recently published book, SIOP: Creating Predictable Revenue & EBITDA Growth. Please get in touch with us if you have any stories, problems, or chances to share about what you're doing to succeed and how these problems will affect your business. Additionally, please keep us informed of your condition so we can figure out how to best assist your company in achieving long-term success. Visit our blog and Download a free copy of our most recent special study, The Road Ahead: Business, Supply Chain & The World Order, to learn more about these subjects. Action Plans Concerning the Supply Chain

4. What Clients Say State of Business, Supply Chain, & Opportunities in Supply Chain Don't take our advice. Hear from our clients directly. I discuss the state of the economy, company, and supply chain in this episode of Supply Chain Chats. Furthermore, I discuss the enormous changes that will present themselves during the coming few years. Executives prepared to seize these possibilities will beat out the competitors and maintain their position for many years. Craig Young, Nellson LLC's Senior Director of Operations. talks about the collaboration we've had. Sales inventory operations planning, commonly known as SIOP or S&OP, purchasing, and sales forecasting were the main topics of our study. The outcomes were reduced on-hand inventory, increased ERP System value, an increase in on-time-in-full (OTIF) from the low to high 90's, and the implementation of the SIOP Process. What actions should you take to make sure you are organized, futuristic, and creative? Check out our Supply Chain Chats series, where we discuss relevant supply chain topics. Your comments and requests are welcome. Visit our client outcomes page to see more client success stories. The STRONGEST LINK in Your Supply Chain Visit our website