Those waiting for the supply chain to balance out may be waiting a few more years. More than half of supply chain executives don’t expect a return to a more normal supply chain until the first half of 2024 or beyond, according to a new survey from Carl Marks Advisors and SupplyChainBrain.
Twenty-two percent of respondents said they expect disruption to continue through the second half of 2023 as threats such as the war in Ukraine and labor shortages continue to cloud the picture. “This research underscores just how profoundly the pandemic impacted corporate supply chains, but also how economic conditions, rising inflation and global tensions are preventing a return to normal,” said Peter Keogh, managing director for Carl Marks Advisors. “In this environment, organizations will need to continue to be nimble, and be especially attentive to inventory levels. In the retail sector, for example, many companies overcompensated for supply chain disruptions by aggressively stocking products and are now facing an inventory glut. We expect to see other industries struggle to recalibrate over the next year or two.”
The economic impact of the ongoing supply chain disruptions cannot be understated. The survey found that supply chain issues negatively impacted revenues at 75 percent of responding companies over the past year. Companies have taken a variety of steps to address the disruption, with most (53.3 percent) diversifying suppliers and a majority (50.1 percent) maintaining more inventory.
When it came to what supply chain executives wish they could do to get supply chain costs under control in 2022, the largest group (31.78 percent) said they would end the war in Ukraine, followed by lower fuel costs by 20 percent (30.84 percent of respondents).