The State of the Global Supply Chain: Mid-2023 Update

The post-pandemic supply chain isn’t what companies expected. What can leaders do about it?

We’ve come a long way since the jarring disruptions of the coronavirus pandemic. During that time, the phrase “supply chain” shifted from industry jargon to a household term. Everything from appliances to lumber to eggs became a hot commodity. Even when goods were produced, there was no guarantee that they would actually get from point A to point B without encountering some delay along the way.

The tumultuous days of pandemic-induced supply chain disruption are now behind us. Consumers and professionals alike have adjusted to the new supply chain reality. Even as this critical area of the economy has stabilized following the turbulence of a global crisis, it’s abundantly clear that a series of adjustments are underway.

From sanctions and tariffs to reshoring and realignment, several key factors are driving the post-pandemic supply chain. Here are some thoughts on how executives in the C-suite can handle the ongoing evolution of goods transportation across the globe.

The State of the Supply Chain in 2023

Many of the most recent shifts in the supply chain haven’t reflected pandemic pressure so much as its political alternative. Governments around the world have been ramping up sanctions and tariffs for quite some time. They’ve put restrictions on sensitive technologies, too. The poster child of this has been the U.S. implementing controls on China’s advanced computing and semiconductor manufacturing in late 2022.

In fact, the undeclared war over chip manufacturing is a good microcosm of the ongoing supply chain shift. In 2016, The Economist was busy reporting that China was in the midst of an investment of $100-$150 billion in public and private funds aimed at turning the nation into a technological powerhouse through chip manufacturing.

It even added that in 2015 the Asian nation announced plans to produce 70% of the world’s chips within the next decade. In 2019, the BBC was still reiterating this Chinese message of self-reliance and industry leadership. Then the pandemic hit.

Since that time, which was partly marked by a sharp shortage of microchips, there’s been a dramatic reshuffling and a re-alignment of the World Order. Western Nations are increasingly consolidating their power away from, severing their dependence on, and positioning themselves into a defensive posture against so-called “Police State” countries around the world. This starts with China but also includes classic modern authoritarian nations such as Russia and Venezuela.

Despite the restrictions, Chinese companies are claiming that the pressure will spark a technological revolution behind what was once called the Bamboo Curtain. Russia’s economy seems substantially better off than analysts expected after the slew of sanctions placed on the Eastern European state, as well.

All the same, the United States continues to limit economic activity with what it sees as an increasingly hostile block of totalitarian states. Instead, it is pouring incredible subsidies into reshoring activity in industries like manufacturing, which has been heavily China-dependent for decades now.

The collective impact of these changes may be difficult to tell at the moment. But the individual effect can be seen everywhere. Supply shortages continue to be a recurring theme. Store shelves are sporadically emptied and replenished at an inconsistent rate. Prices continue to fluctuate wildly, with eggs remaining the prime example of the fickle nature of supplying the world economy in the 2020s.

Managing Supply Chains From the C-Suite

As the world comes to terms with the inconsistent “new normalcy” of the post-pandemic supply chain, many executives are finding themselves in a similar boat to consumers — though one where the stakes are much higher. Their entire companies and, in many cases, dozens and even hundreds of employees depend on unstable supply chains to keep their enterprises in business.

In this heightened state, it’s imperative that the members of the C-suite invest in stability. The safest path forward is to hire a competent CSCO. This rising star in the C-suite has been a hot commodity since the pandemic began and for obvious reasons. Installing an experienced individual to oversee the ebbs and flows of the supply chain used to feel like a luxury. Now it’s become a necessity.

“The safest path forward is to hire a competent CSCO.”

At Stanton Chase, our executive recruiters have worked with and placed a growing number of CSCOs over the course of the last few years. As supply chains have evolved and remained unpredictable at best, leaders have come to see a dedicated and capable supply chain officer as one of the best ways to run their businesses without significant disruption.

Whether it’s through adding to the C-suite, following the news, or simply rolling with the punches, executives everywhere are learning to cope with a supply chain that, while no longer in pandemic purgatory, has remained in its own troubling state of limbo for years now with no end in sight. There are some bright spots, to be sure, but the cons far outweigh the pros at the moment. Here’s hoping supply chains find a more agreeable equilibrium in the not-too-distant future.

About the Author

Peter Deragon is a Managing Director at Stanton Chase Los Angeles. He is also active in the CFO Practice Group and Financial Services, where he started his career. He has 30-plus years of experience as a trusted advisor and manager in B2B environments. In his free time, Peter supports charitable organizations, especially those focused on ocean stewardship.