CPR firms shift to friend-shoring amid geopolitical risks By Investing.com

© Reuters.

Global Consumer Products and Retail (CPR) companies are actively revising their supply chain strategies, with a significant focus on diversifying suppliers and investing regionally to mitigate the impact of geopolitical tensions and prepare for the holiday season. According to the latest findings from the Capgemini Research Institute, an impressive 83% of these companies are adopting ‘friend-shoring’ tactics, collaborating with allied nations to ensure more stable and secure supply chains.

The research indicates a clear trend away from traditional offshore procurement, which is expected to decline by 7% by 2025. In contrast, there is a projected increase in nearshoring and domestic sourcing by 4% and 3%, respectively. This shift reflects a strategic response to pressing geopolitical issues that affect the bottom line for 77% of firms. As companies brace for possible stockouts, import-related delays, and labor shortages, they are emphasizing process improvements and leveraging cloud computing for automation to secure cost efficiencies and bolster revenues.

Capgemini highlighted the importance of integrating cost-saving tactics with sustainable measures such as warehouse automation. Moreover, incorporating circular economy principles is seen as vital for building resilient supply chains that can also act as a competitive advantage through ethical sourcing initiatives.

Despite these efforts, sustainability practices remain underutilized. Less than half of the companies have effectively implemented such initiatives. While recyclable packaging and other sustainability pursuits are recognized for their role in securing market competitiveness during critical sales periods like the holidays, they face significant scaling challenges.

As CPR firms innovate their supply chains to enhance last-mile deliveries, they are embracing resilience through diversified suppliers (79%) and friend-shoring strategies (83%). The integration of demand-sensing technology is essential for navigating peak season demands effectively, and optimizing product portfolios is crucial for streamlining fulfillment processes.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Leave a Comment