Global supply chains will face a transformation towards a circular economy and shared value creation
When we work together with corporate clients, helping them meet their ambitions in terms of strategy, supply chains or operations, we look for opportunities to sustainably improve performance and sometimes simulate crises to test their resilience. When a crisis hits, it can easily cost tens of millions of euros. But what happens when the crisis is over? We wake up and go back to our day-to-day lives, doing precisely what we did before the crisis arrived. A month later, we look at our plans and strategies to prepare for worst-case scenarios and suddenly find them too encumbering, too extreme and certainly too expensive and we file them away in our “let’s not think about that” folder.
Why do we do this? Because we continue to believe in and live and work in the models that we’ve shaped over time. But COVID-19 is changing all that. Today, many of us are waking up to the realisation that this virus has the potential to do the unthinkable: to take us back to step one of Maslow’s stairs. And that’s not even the worst-case scenario. But at the same time, COVID-19 presents an opportunity. It is not the end of globalisation but maybe the trigger to reassess the models used globalisation was built on.
Covid-19 will accelerate the evolution towards other models of how we work, produce, serve and consume in a world that’ll only become more constrained. Starting this process now will not only help people, companies, economies, countries and markets to become more resilient, but also generate more sustainable value for everyone to share.
Going forward, companies should consider structurally rethinking their business models and supply chains by implementing circularity principles and digital solutions. Closing the loops to secure transparent, continued access to sufficient qualitative resources will be key. They should also look at transforming their operations and supply chains to maximise the utilisation of resources and the lifetime of the goods or services they deliver to guarantee, satisfy and outperform customers’ expectations.
For primary essential goods, such as food and medical equipment, and services, such as utilities, we’ll need to shorten the chain and manufacture closer by. The same goes for other strategic support services, resources and products.
To make that happen, governments will have to speed up the transformation of their tax systems, to reduce the cost of labour for example. They have an obligation and responsibility to create an environment in which citizens and companies can manufacture and prosper.
Because we believe we should contribute to the world with what we’re best at - solving important problems from strategy through execution - at PwC, we’re speeding up the integration of our unique knowledge and experience in the field of transforming supply chains and markets into circular markets and digital solutions.
Today’s the right time to start this process. Working in new ways is already helping us create new insights.
Author of the article: Christoph Vanderstricht