4 in 10 business leaders diversify supply chain sources
The pandemic exposed weaknesses in the lean ‘just-in-time’ model, KPMG said.
About 42% of business leaders in Singapore have diversified their sources of supply chains to build greater resilience, according to KPMG’s 2021 CEO Outlook survey.
The accounting firm said that this was driven by the pandemic exposing supply chain vulnerabilities, in areas such as inventory costs and waste.
“With the pandemic exposing the weaknesses of the lean ‘just-in-time’ model, some businesses began to pivot towards keeping larger inventories to lower the probability that any one product will sell out,” KPMG said in a report.
It added that companies are keen on nearshoring critical material supply and putting in place more robust recovery plans in anticipation of future disruptions in the global supply chain. This includes developing alternate supply chain strategies such as supply chain segmentation, the use of ‘control towers’ and micro supply chains.