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Identification of trends, changes and disruptions in supply chains

The goal of the current ReSChape working package “Identification of trends, changes and disruptions in supply chains” is to propose innovative models for supply chains shaped by various current trends that also comprise significant changes and disruptions. Therefore, firstly, a PESTLE analysis has been performed to investigate the trends with respect to socio-economic, technological, political, legal, and environmental factors that impact European supply chains. As a basis, the findings from prior Next-Net EU project have been examined regarding their contribution to resilience and sustainability. After that, a structured literature analysis has been conducted to ensure the inclusion of newly arising, most current trends and will be supplemented by empirically collected insights of external community members that fulfil management roles in supply chains.

As a first finding, the emerged megatrends of the conducted PESTLE analysis can be obtained from figure 1.

Figure 1. ReSChape megatrends identified in the PESTEL analysis.

 

For more in-depth information, appendix 1 lists particular trends that are associated to the megatrends. As in this month only multiple earthquakes and tornados happened in the eastern and western world, the environmental megatrend of the climate change is taken as an exemplary highlight in this paper and described in terms of its associated trends and supply chain effects.

The climate change is long since impacting economic developments and demands for climate protection activities. Businesses and particularly supply chain partners are increasingly focusing on its consequences as a major risk that – in the context of regulation – requests from regulators and other stakeholders. The climate change is characterized by global warming and fluctuating weather conditions as well as accompanied by sub-trends that are also having an impact on the supply chains, such as air and water pollution. According to the European Environment Agency, air pollution is still the largest environmental health risk in Europe and significantly impacts the health of the European population, particularly in urban areas. Also, water resources remain under pressure as large amounts of surface water bodies in the European Union are in poor ecological conditions. The sub-trend of global warming is indisputable. If society fails to meet the climate targets, global warming will continue while increasing physical impacts, such as extreme weather conditions in the form of storms, droughts, floods, or heat waves. Still, even if the climate targets are met, transitory risks will arise along the way, for example due to changing demands, energy and commodity prices, or new regulations.

When considering the effects on supply chains, the continuing air and water pollution trends cause the need to strengthen sustainable means of production and transportation while increasing smart and sustainable energy sources, materials, packaging, and commodity transitions [1, 2]. Economic growth and more unpredictable weather patterns otherwise increase competition for access to water, impacting citizens, farmers, industries, and governments likewise. In this context, the use of practices and emerging technologies to limit environmental damage need to be and will be researched with the aim of implementing green certifications, policies, and processes through all parts of the supply chain [2]. Also in terms of the global warming as a second sub-trend of the climate change, companies and supply chains are expected to move into action and reduce emissions and the environmental footprint of their products as well as meaningfully use technologies to reduce the impact [2]. By following these aims companies and entire supply chains face multiple risks that will be part of a subsequent paper.

Appendix 1: ReSChape supply chain megatrends and trends along the PESTLE dimensions.

Dimensions

Megatrends

Trends

Political

Protectionism Import tariffs
 Quotas
 Different tax structures
 Subsidies
Political stability Terrorism, conflicts, and corruption
 Social unrest
Supranationalism Trade agreements
 Free movement
 Decline in democracy

Economic

Global trade shift Deceleration of the economic growth in emerging economies
 Export growth on recovery
 Restructured investment flows
 Reorganized globalisation
 Emergence of born-global firms
 Transportation costs increasing
 Increasing inflation
Digital platform economy Digital platforms
 Sharing Economy – B2C – C2C
 Cashless payment / Digital currencies
 Financial technologies revolution (Fintech)

Social

Demographic change Ageing population boom
 Young population boom in developing countries
 Migration flows
Urbanisation Densely populated areas
 Smart cities
Consumption patterns Middle-class explosion
 Consumer consciousness
 Consumerism
 Individualisation
Digital learners Change of purchasing patterns
 Change of communication patterns
 Reshaping the workplace
Knowledge based society Emerging skills required
 Increase demand for high-qualification jobs
 Continuous learning culture

Technological

Increasing amount of data Big data and advanced analytics
 Artificial intelligence
 Cloud based computer systems
 Blockchain and Distributed Ledger Technologies
 Edge Computing
 Digital Twin
Autonomous Things and Hyperautomation Robots and Cobots
 Internet of things
 Augmented reality and virtual reality
 3D printing/additive manufacturing
 Drones
 Automated vehicles / Automated guided vehicles
 Sensors
 Wearable devices
Infrastructure and Security-related risks Online platforms
 5G and 6G
 Cyber security
Technologies Contributions to alternative Energy Sources “Cleaner” energy sources for transportation
 Alternative Sources of Energy

Legal

Consumer protection Cross-border payment regulation
 Long-term consumer retention
 Product safety regulations
Informational regulation Data privacy
 Data ownership and sovereignty
 Patents
Social and environmental regulations Corporate social responsibility
 Inclusiveness regulations
 Emissions control regulations
 Waste and resources management regulations

Environmental

Climate change Air and water pollution
 Global warming
Resource scarcity

 

Waste increase
 Lack of resources such as water, land, energy, food and  rare earth elements
 Energy demand
 Semiconductor shortage