Nancy Marino, Associate Partner, Columbus Consulting
The New Normal of Supply Chain Paradigms
The global supply chain landscape is undergoing unprecedented shifts, driven by perpetual disruption, geopolitical shifts, and evolving economic policies. A new wave of policies will impact businesses worldwide. This event mandates a paradigm shift for professionals—moving beyond apolitical discussions to address the intersection of politics and supply chain strategies. It is the economic activity that is cross-border integration and essentially is the process of restructuring or reconfiguring global economic and trade networks. Often with a focus on regionalization or bringing production closer to consumer markets.
Evolution, Not Reversal
Internationalization is not the undoing of globalization but its evolution, built upon lessons learned and adapting to new global realities. This represents a balanced approach to globalization amidst disruptions, combining geopolitical competition with cooperation. It emphasizes resilient, fragmented, and regionalized supply chains while maintaining elements of global integration.
Key principles of internationalization include:
- Regional Focus: Shifting from globalized to regional supply chain models for resilience and agility.
- Collaborative Partnerships: Prioritizing relationships with partners aligned in values and goals.
- Circular Supply Chains: Moving beyond linear models to sustainable, end-to-end processes.
- Risk Mitigation: Diversifying sourcing strategies to avoid single points of failure.
- Economic Factors: Rising labor costs in previously low-cost regions and increased focus on automation and intellectual property protection.
- Geopolitical Shifts: Tariffs and economic nationalism in the U.S. and EU policies, including tariffs on Chinese goods.
By embracing Internationalization, businesses can align supply chain strategies with the economic and geopolitical realities of today.
Internationalization Strategies
- Nearshoring:
- Relocating production closer to the primary market (e.g., Mexico, Canada, South America).
- Reduces lead times, transportation costs, and working capital needs.
- Reshoring:
- Returning manufacturing to home countries for resilience, quality control, and domestic job creation.
- Challenges include higher labor costs and a lack of infrastructure.
- Friendshoring:
- Building trade relationships with trusted partners
- Promotes stability by anchoring operations in friendly regions (e.g., India, ASEAN countries)
- Supply Chain Reconfiguration: Adjusting the flow of goods across different countries
- Deglobalization: A partial rollback of global integration
Internationalization in Practice: Nearshoring, Reshoring, and Friendshoring
To adapt to the new realities of global trade, organizations must evaluate their supply chains through the lens of Internationalization. This includes:
- Scenario Planning: Identifying “hot spots” of potential disruption and developing contingency plans.
- Regional Partnerships: Prioritizing trade within aligned trading groups, such as North America, Europe, India, Japan, and South Korea.
- Sourcing Diversification: Reducing reliance on adversarial trading partners to minimize risks.
How Tariffs Impact Internationalization
While tariffs can be effective, their impact varies depending on context and execution.
- The Good:
Tariffs as a negotiating tool can drive significant strategic outcomes. For example, leveraging tariffs to encourage Mexico and Canada to enforce existing immigration and drug-related laws showcased their utility in achieving policy objectives. - The Bad:
Poorly implemented tariffs—such as those without a clear plan or adequate lead time—can lead to retaliatory measures, supply chain disruptions, and increased costs. - The Risky:
Tariffs used without mutual understanding or contingency planning may result in unsatisfactory outcomes for all parties involved. Businesses must proactively assess potential impacts and prepare alternative strategies.
The Role of Trading Groups in Supply Chain Strategies: The world is increasingly divided into two major trading groups:
- Aligned Partners: North America, Europe, Near East, India and the Sub-Continent, Japan, and South Korea share aligned trade values.
- Adversarial Networks: Russia, China, Iran, Afghanistan, and North Korea often adopt contrasting approaches.
For companies operating within or across these groups, understanding the implications of geopolitical tensions is critical. Evaluating redundant sourcing, alternative supply chains, and alignment with regional strategies ensures preparedness for potential disruptions.
The Circular Supply Chain: A Path to Sustainability
Internationalization requires rethinking supply chains not as linear processes but as circular systems that integrate sustainability at every stage. From raw materials to customer satisfaction, businesses must emphasize environmental, social, and economic resilience to thrive in the face of disruption.
Challenges and Considerations
- True regionalization and decoupling from China remain difficult due to decades of established trade relationships, whether they be apparel or hardline manufacturers or parts and material suppliers.
- Disruptions are perpetual, requiring Dynamic Supply Chain Optionality, the ability to pivot strategies dynamically.
- Companies must weigh resilience, agility, and sustainability alongside cost in decision-making.
Future Implications
- Internationalization is an evolution, not a reversal, of globalization.
- Companies adopting strategic Internationalization can achieve:
- Increased resilience.
- Competitive advantage.
- Sustainable growth amidst disruption.
- The cycle of “Internationalization” emphasizes a continually evolving supply chain landscape.
Navigating the Era of Paradigm Shifts
The 2020s are defined by rapid and frequent paradigm shifts in global supply chains. As we adapt to new political and economic realities, the global shift emerges as the path forward—building resilience, fostering collaboration, and redefining global trade strategies.
Internationalization will redefine the supply chain landscape. Businesses that embrace this evolution will not only navigate disruption but emerge stronger, more agile, and better positioned for the future.
.Future Implications
- The global shift or Internationalization an evolution, not a reversal, of globalization.
- Companies adopting strategic initiatives can achieve:
- Increased resilience.
- Competitive advantage.
- Sustainable growth amidst disruption.
- The cycle of Internationalization emphasizes a continually evolving supply chain landscape.
Want to Learn More? Columbus Consulting has the tools and knowledge to help companies with the implementation and assessment of the strategic and economic viability of relocating or diversifying their supply chains and creating a step-by-step plan for implementing the global shift. Check out more industry insights here: https://www.columbusconsulting.com/category/insights/
ABOUT NANCY MARINO
Nancy Marino is an Associate Partner at Columbus Consulting with a proven track record of successfully leading retailers and brands for implementation of processes from design to delivery and development of their Go-To-Market strategies. She is respected for her leadership skills and project management oversight for executing system initiatives and international acumen having managed global sourcing and buying offices in over 50 counties. Nancy is a decision leader and change management expert. She is an adjunct professor at FIT and is pioneering leadership in the PLM AI retail space.
ABOUT COLUMBUS CONSULTING
Columbus Consulting delivers solutions that drive true value and have been transforming the retail and CPG industries for over two decades. We are a retail consulting company of industry experts. Our approach is simple, if you do it, we do it. We are more than consultants; we are experienced practitioners who actually sat in our clients’ seats. We understand the challenges, know what questions to ask and deliver the right solutions. Columbus offers a unique, consumer-centric approach with an end-to-end perspective that bridges functional & organization silos from strategy to execution. Our specialties include: unified commerce, merchandising & category management, planning & inventory management, sourcing & supply chain, data & analytics, accounting, finance & operations, people & organization and information technology. Let us know how we can help you. To learn more, visit COLUMBUSCONSULTING.COM.
