WTC Article: Finding Opportunities in Uncertain Times
Published by the World Trade Centre Winnipeg
The world economy is at an inflexion point. What was once the most highly interconnected global economy in human history has unexpectedly ground to a halt overnight. Millions of people stand to lose their jobs and untold billions of dollars in business activity will simply vanish into thin air.
Despite this monumental turn of events, many leading experts remain cautiously optimistic that the economy can return to relative normalcy within a year. As the restrictions to movement are lifted, the population can return to work and once again consume goods and services at a consistent rate.
Notwithstanding the uncertainty surrounding the exact timing of those restrictions being lifted and its effects on that analysis, what is certain is that once the economy does find its footing, there will be a massive global market for products that fix the inherent flaws exposed in this crisis.
One of those key deficiencies is the extent to which major multinationals still do not master the traceability of their supply chains. As soon as the crisis hit, companies were forced to develop contingency plans to keep their operations afloat. That sounds straightforward enough but think of what that entails for globalized organizations like Boeing or Walmart.
They must simultaneously track their own evolving capabilities across all their sites (financial, human, logistical, IT), link it to projections of completely unexpected client demand, and ensure that their suppliers are up to the task. From this chaotic environment full of vital unknowns, they must determine the optimal course of action. Unless they are entirely vertically integrated – which they are assuredly not – that requires them to have a real-time view of their entire universe.
In the pre-pandemic world, the odds of a crisis of this magnitude were considered very low. There was therefore little justification to plow resources into preparation for this scenario; a scenario in which even Boeing reportedly does not really know which local suppliers still exist across the Pacific Northwest.
Recent events have fundamentally changed that calculus. The disastrous slowdown will surely cost more than the required investment into perfecting traceability, which means that billions will be spent to double-down on refining those capabilities. As happens in a free market, it might not be long before the fruits of that investment make their way to SMEs and the broader market.
To paraphrase Gretzky’s legendary advice: if you’re trying to anticipate where the puck is headed, it might be wise to start looking at traceability.