A new report from Citi says that global trade is undergoing a period of transformation driven by the requirements of supply chain resilience.
Supply Chain Financing – Building Resilience as the New Definition of ‘Global’ Emerges says that the recent strong focus on supply chain resilience has led to businesses and countries building new trade corridors or new relationships between dominant cities, economic development agencies, and rural areas, as well as the diversification of their supply chain partners.
The report provides industry insights from Citi’s proprietary Global Supply Chain Pressure Index.
The Index indicates that while corporates have looked to move back towards just-in-time inventory practices, they have also strategically held larger inventories for components that are hard to source.
Corporates have also continued to diversify their supply chain resources by considering new suppliers and nearshoring, as well as creating new trade corridors.
In a survey for the Index, Citi asked respondents if they were considering adopting a China Plus One strategy as a way to diversify their supply chains. Over half of global respondents indicated that they already had, or were considering, adopting such a strategy, with North America leading other regions with 63%. Vietnam was the preferred secondary destination, except in Latin America, where respondents would prefer to bring production back to their home market.