MRO, Friendshoring, Altacia and Other Supply Chain Keywords for Next Year

Emro, the nation's No. 1 AI-based supply chain management software company, announced the ‘Key Supply Chain Keywords for Next Year’ on the 20th.

Emro conducted a survey on supply chain trends targeting purchasing specialist columnists through the online community service for corporate purchasing managers, ‘BUYBLE.’ Based on the collected responses, five keywords were derived.

Amid expectations that the global economy will continue to experience low growth and supply chain risks next year, the keywords identified are ▲Friend-shoring ▲Altasia ▲Predictive logistics ▲Just in case inventory management ▲and delivery systems reflecting raw material price fluctuations.

The Biden administration in the U.S. is actively promoting reshoring and near-shoring policies that encourage American companies to relocate production bases to the U.S. or neighboring countries. Several countries, including the European Union (EU) and Japan, are going further by adopting ‘Friend-shoring,’ which builds supply chains among allied or friendly countries. The trend of securing stable supply chains centered on regions and allied countries is expected to intensify next year, expanding the global supply chain restructuring.

In line with this trend, ‘Altasia’ is expected to emerge. Altasia is a coined term combining ‘Alternative’ and ‘Asia,’ referring to a new economic supply chain ecosystem. It includes 14 countries such as South Korea and Japan, which have technological capabilities, as well as India, Vietnam, Bangladesh, Indonesia with relatively low labor costs, and Singapore, a financial and logistics hub. Governments worldwide and many global companies are turning to Altasia to reduce dependence on supply chains concentrated in specific countries. Companies need to understand the trend of global supply chain diversification well and prepare strategies to turn it into new opportunities.

Due to various factors such as trade conflicts between countries, geopolitical risks, and climate change, instability in raw material supply and rising logistics costs continue in the global market. With the expansion of supply chain risks and global market volatility, accurately predicting demand has become difficult. Going forward, companies will find it increasingly important to enhance supply chain resilience and ultimately reduce costs by utilizing digital new technologies such as artificial intelligence (AI) for ‘predictive logistics’ and ‘just in case inventory management’ when establishing supply chain strategies.

Given the expectation that raw material price volatility will remain high next year due to unstable international conditions, establishing delivery systems capable of responding to this is expected to become essential. Many companies are adopting prediction systems for raw material prices and supply. They are also actively reviewing win-win measures with suppliers delivering raw materials. In the domestic market, the government has been accelerating the stabilization of the delivery payment linkage system implemented since last October. Adjusted contracts in subcontract transactions reflecting raw material price fluctuations and sanctions against companies not implementing the delivery payment linkage system are expected to be major issues next year.

An Emro official said, "We have entered the so-called ‘VUCA era,’ which stands for Volatility, Uncertainty, Complexity, and Ambiguity, where unpredictable management environments continue." He added, "Companies need to establish systematic and flexible supply chain strategies and systems to proactively respond to the global supply chain crisis."

This content was produced with the assistance of AI translation services.