21 Years of 21st Century — Promises Kept or Broken — Challenges & Solutions…

21 years of 21st century have passed. For those born in later half of 1900’s, 21st century was set as a dream which would sort out most problems of the world. Some called it a century that would belong to India, some a century of Science and Alien worlds and some of an all invasive technologies. All in all it was supposed to be a century of comfort, growth and a new world. Yes, 21 years of 21st Century have passed and all those dreams while not completely shattered, are also not completely fulfilled.

Story so far… 21st Century so far has been a story of three main influencers — Globalization, Technology and Pandemics (Covid19 not being the only one) and between these factors a very promising century has had a very mixed start. Lets examine these three factors in bit more detail.

Globalization. World today is far smaller and much more integrated today then it ever was. Supply Chains have spread far and wider and despite cries of localization and self reliance, there is hardly any part of the globe that can claim itself to be completely self sufficient. Market indices in one part of the world are impacted by what could be happening in the significantly other part of the world and Supply Chain designs today have to bear in mind the geo-political realities of each part of the globe. Some of the key events or trends of 21st Century so far: —

• Movement of People & Capital. Increasingly higher immigration for education, job and better life prospects. Easier money flow through borders with online mechanisms and easier trade restrictions / tariffs facilitated by WTO leading to wave of investments in developing countries.
• Rise of Multinationals. While they have always been there, 21se Century has seen a true rise of MNCs with many of them now in over 100 countries and present across the globe. This leads to challenges and opportunities in Supply Chain, people management, finances and balancing global optima of demand, supply and manufacturing & sourcing costs.
• Protectionism. Increasing globalization also brought with it political ask for protectionism to safeguard domestic industries, jobs and people from the foreign competition. Developed world got more worried of lower cost resources available in developing world and developing world increasingly concerned of lower cost products from the developed markets. Uncertainty of policies and practices leads to uncertainty and complexity in design of Supply Chains and ensuring business continuity.
• War on Terrorism. Attack of 9/11 started a global war on terrorism. Fact that this event seems so much distant in time now and hard to believe of the same century, shows that time has been moving fast and things have been changing at a rapid pace. Cost of war continued to increase as it spread from Afghanistan, Iraq and several other parts of Middle East. But this war is nowhere near being over or conclusive as yet.
• Greek & Eurozone Debt Crisis. Huge amount of Sovereign Debt that Greece had taken on led to default in 2015 leading to further loans by EU in the biggest financial rescue of a bankrupt country in history. This also triggered the need to rescue several other EU countries and raised many a questions on the viability of single currency for EU.
• Rise and Rise of China. On purchasing power parity basis, China became the biggest economy in the world. Its absolute GDP is growing faster than US and being the second largest holder of US debt gives it significant leverage negotiating global political and economic policies including imports & exports. China is the de-facto and important part of any Global Supply Chain and hence an important factor to learn and consider for any Supply Chain / Procurement professional.
• Brexit. In 2017, British voted in favor of exiting the European Union, a move that was expected to severely impact its growth and potential start the disintegration of EU. UK officially left EU on 31st Jan’2020 and its real impact of the world is yet to be seen. Supply Chain professionals did work overtime to plan and execute multiple scenarios and business continuity plans.

In my next article, we would discuss the technological trends and the impact on Supply Chain and Procurement world. Meanwhile, I would love to hear your views on how Globalization has impacted Supply Chain over last two decades and specifically the key challenges that you faced through these years and perhaps how you addressed them. Feel free to share your experiences and success or failure stories in managing these. For all you know, your success could help turn around someone else’s failure or vice versa.

If you are still with me, thanks for reading it and looking forward to hearing your comments on this first article of the series — 21 years of 21st Century.