Accept de-globalisation as the new normal

In their 23rd Annual Global CEO Survey
www.pwc.com/gx/en/ceo-survey/2020/trends/industrial-manufacturing-trends-2020.pdf
Published in 2020, pwc has identified a growing trend of de-globalisation across industries. In
particular, the report suggests that firms should consider the following changes to their
operating systems:
Preparing for the potential fallout of a trade war, increased tariffs, labour restrictions and
subsequent cost increases does not require localising production altogether but it does
require companies to revisit their globalised, highly interconnected supply chains. Moreover,
the COVID-19 health emergency is revealing the effects of disruption on these globalised
supply chains. To address these issues, leaders should consider some or all of the following:
1. Consider suppliers from other countries besides China and Mexico, where doing
business is becoming more complex and expensive. Alternative sources include
Malaysia, Indonesia, India, Thailand, Poland, Slovakia, Hungary, Ireland and
Brazil.
2. Optimise existing plants to squeeze every ounce of current capacity. Automation
and digitally enabled workflows can create that capacity, lower unit costs to more
globally competitive levels, and speed customer responsiveness.
3. Redraw your global manufacturing and supply chain footprint, and reconsider
alliances and strategic partnerships that can provide regional, technical and
skill-set agility. Keep in mind production costs, tax implications, quality and
delivery. There is value in shortening the overall supply chain cycle time to better
adapt to changing environments.

Please select one of the three suggestions above. Discuss how your chosen suggestion will
influence a firm’s operating system by detailing the key capabilities, assets, and processes
that are needed for a successful implementation of the suggestion. Please also explain
whether (or not) you perceive your chosen suggestion as a good and sustainable way to
improve a firm’s operating system.

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