Global supply chains have traditionally been designed to focus on supply chain efficiency and reduce costs for a long period. Companies have been looking for affordable places to produce their goods and have been keeping their inventory levels low and using just-in-time supply chain models. However, these supply chains are not resilient and can be disrupted easily. Recent global events like COVID-19, regional conflicts, and trade barriers have highlighted the problems associated with supply chain optimization. Companies are now shifting their focus from supply chain efficiency to supply chain resilience (World Economic Forum 2023). Companies are looking for global supply chains to be safe, secure, and swift.
The shift toward resilient supply chains
The traditional way of carrying out business in the supply chain saw manufacturing taking place at specific locations with heavy dependence on certain countries for critical raw materials. Although this has helped firms reduce the cost of production, it has also resulted in huge risks. The tensions between the large economies have resulted in an increase of tariffs, export controls, and restrictions on critical technologies. This has forced multinational firms to consider the source of raw materials and their dependence on specific suppliers (S&P Global 2024). Therefore, these firms have realized that it is not just the cost that matters but stability as well.
Key strategies for building resilience
To solve these problems, companies are increasingly turning to more suppliers. Rather than relying on a few suppliers or a few countries, companies are now relying on many suppliers from different countries. A case in point is the “China+1” model, where companies are setting up operations in China and in other countries such as Vietnam, India, or Mexico. This has helped companies avoid political risks while still enjoying lower costs (UNCTAD 2023).
Another important concept is that companies are now regionalizing the supply chain, nearshoring, and reshoring. This has resulted in companies shifting operations to regions that are closer to the main markets where consumers are located. This has helped companies avoid shipping risks and lower costs. Governments are supporting this move by investing in manufacturing in the countries and providing incentives for strategic sectors such as semiconductors and renewable energy technologies (OECD 2023). Sourcing close to the manufacturer is one of the time-tested ways to offset costs and build a more reliable supply chain. However, companies have been drifting their supply chains globally in search for cost-effective choices. This approach has been benefitting the companies to keep the costs low while fulfilling their order fulfillment needs.
Another important aspect is that technology is helping companies build more resilient supply chains. Technology helps companies monitor and track suppliers and make decisions in case of disruptions or crises. Studies indicate that companies that are employing digital technologies in their supply chains are better at managing disruption risks and keeping operations going (Ivanov & Dolgui 2021).
![[Alt text: a large industrial harbour view with thousands of containers waiting to be loaded with cranes.]](https://blogit.lab.fi/labfocus/wp-content/uploads/sites/8/2026/03/132_2026_From-effiency-to-resilience-etc-1024x576.jpg)
Balancing efficiency and resilience
Geopolitics is an important aspect in supply chain management for businesses today. Trade policies, sanctions, conflicts, and geopolitical shifts between powerful nations are impacting how businesses procure their goods and where they manufacture their products (OECD 2023). Hence, businesses should consider geopolitics in their supply chain management.
The idea is to find a trade-off between supply chain efficiency and flexibility in supply chain planning. In the long run, the cost of supply chain problems is higher than the cost of adding suppliers and inventory. Hence, businesses are using a mix of global and regional supply chain networks and technology (Baryannis, Dani & Antoniou 2019).
In conclusion, a new approach is needed for global supply chains in 2026. Supply chain efficiency is no longer sufficient for businesses in a geopolitical environment where tensions are rising and economic uncertainty exists (S&P Global 2024). Diversification, regionalization, and digitalization can help businesses build a robust supply chain for long-term success. Understanding consumption patterns and substitution of global products with locally sourced alternatives should be helpful in meeting long term goals.
Authors
Syed Ali Murtaza Zaidi is a 2nd-year Business Information Technology student at LAB University of Applied Sciences, Lahti, and has studied logistics and supply chains management.
Sajal Kabiraj, PhD, works as Principal lecturer at the Faculty of Business and Hospitality Management at LAB University of Applied Sciences, Lahti.
References
Baryannis, G., Dani, S. & Antoniou, G. 2019. Predicting supply chain risks using machine learning: The trade-off between performance and interpretability. Future Generation Computer Systems, 101, 993–1004.
Illahi, H. 2025. Port of Tanjung Priok. Photograph. Unsplash. Cited 16 Mar 2026. Available at https://unsplash.com/photos/ip0yX8W1veE
Ivanov, D. & Dolgui, A. 2021. A digital supply chain twin for managing the disruption risks and resilience in the era of Industry 4.0. Production Planning & Control, 32(9), 775–788.
OECD. 2023. Global Value Chains: Efficiency and Risks in the Changing World Economy. OECD Publishing.
S&P Global. 2024. Geopolitical Risk and Supply Chain Resilience. S&P Global Market Intelligence.
UNCTAD. 2023. World Investment Report 2023: Investing in Sustainable Energy for All. United Nations Conference on Trade and Development. Cited 5 Mar 2026. Available at https://unctad.org/system/files/official-document/wir2023_en.pdf
World Economic Forum. 2023. Global Value Chain Barometer: How to build supply chain resilience. World Economic Forum Annual Meeting. Cited 5 Mar 2026. Available at https://www.weforum.org/agenda/2023/01/davos23-global-value-chain-barometer/
