As a new president gets set to take the reins of America in 2025, supply chains are wondering what that means for them. That is just one of the trendlines that supply chain managers will be focused on as 2025 kicks off in a few weeks.
Abe Eshkenazi, CEO of the Association for Supply Chain Management, recently was on the Talking Supply Chain podcast to discuss what 2025 may look like from a supply chain perspective.
"Obviously, we want to see the actual policies that are being implemented or are being suggested," he said. "And obviously there's a wide range of possible outcomes, and companies are in some respects waiting to see. But ... we have had some history with the Republican administration, specifically Trump's administration."
While companies may be in a wait-and-see mode, Eshkenazi noted that the supply chain disruptions of the past several years have positioned companies better for the uncertainty that lies ahead.
"We also had four years of disruptions that have really required almost every company to have appropriate contingency plans from sourcing to production to logistics. This is just another factor that needs to be accounted for in their contingency," he said.
While Trump has proposed a series of tariffs -- both blanket tariffs and targeted tariffs, Eshkenazi says that is just one consideration businesses will deal with in 2025.
"Organizations ... have been adjusting their supply chain strategies away from a China-sole-source into a China-plus-one strategy given the previous disruptions that we've had over the past three to four years," he said. "This is a continuation. It's an acceleration of the diversification of suppliers, of locations, of the support. We're seeing organizations are continuing to develop contingency plans and ensuring that they have other sources of suppliers away from single-source or sole-source suppliers that brings on significant risks for those organizations.
"I think we're in a period of significant transformation for supply chains," Eshkenazi added. "I think this is just one more element of it. I don't know that this is necessarily any larger or any different than what we've seen in the past."
Eshkenazi said the past few years and the growing trend of nearshoring/reshoring may have positioned supply chains better for a Trump presidency.
"Those organizations that have experienced the disruptions, I think we're in an environment of adaptability and resiliency," he noted. "We don't know what the next disruption is going to be. Obviously, when we're talking about tariffs, we have an indication as to what may cause it, but I think we've got to take a look at this as a long run -- whether we're talking about nearshoring or reshoring -- this isn't going to be done in quarters. This is done in years in terms of planning. The chip manufacturing is a great example. It's almost three to five years before we start to see production out of the investments that are being made today. So, in the short term, I think there's some activities or some changes that organizations can make to mitigate either sole source or sourcing from China into other locations. We're seeing this already, the China-plus-one strategy. We're seeing significant investment in India ... as well as Vietnam and some of the other locations to mitigate against a sole source or a disruption that would create a lack of alignment on your planning."
While Eshkenazi also touched on technology, resiliency and visibility within supply chains, talent is a top priority of ASCM, and he saved some of his most passionate conversation for this conversation.
"A good example is the TSMC, the chip manufacturing that is being built right now in the Phoenix area," Eshkenazi pointed to as an example of the talent issue facing the U.S. "We're importing workers from Taiwan because we don't have a trained workforce. And so it's not just the facility itself, but the ecosystem necessary to support it. Taiwan, China and some of the other locations, they've had almost a 20- to 30-year head start in building an ecosystem necessary to support the manufacturing."
Chip manufacturing is just one area of concern moving forward. Ashkenazi cited a recent ASCM estimate that supply chain could be short some 2 million workers by 2030 if the current pace of hiring and training continues.
"I think that the challenge that we have here is not only attracting but retaining the talent that are critical for supply chain roles," he said. "With the automation, with the technology shifts, the industry is adopting a multifaceted approach to bring in individuals. But I think one of the challenges that we have is that the investment in professional individuals often rises with their profitability or their lack thereof. Too often we've seen organizations pull back on professional development if they're not meeting their financial objectives as if this is a spigot that you can turn on and off and get those individuals trained in a short time period. Professional development and investing in your workforce is an ongoing activity."
The upside, Eshkenazi said, is that those new to the industry are digitally saavy, and for an industry that is rapidly adopting technology, it is creating new opportunities to develop tomorrow's supply chain leaders.
"They've grown up with technology, whereas most of the leadership did not grow up in an environment where you had technology at every step along the way," he said. "There's not only mentoring opportunities for individuals coming into the workforce, but there's reverse mentoring for individuals [already in the] workforce on how to enable and to leverage the technology investment that organizations are making building that infrastructure and attracting the talent, retaining them, giving them opportunities for career development and more importantly, giving them leadership and development and opportunity."