Geopolitical Impacts on Supply Chains

In an era marked by heightened geopolitical tensions and increasing global polarisation, Swiss manufacturers face unprecedented challenges and opportunities regarding supply chains. Our analysis reveals how adopting strategies such as friendshoring, local sourcing, and advanced digitalisation can mitigate risks and turn them into competitive advantages. Discover how Swiss companies are reshaping their supply chains to be more resilient and responsive to the dynamic global landscape, ensuring stability and growth in a more polarised world.

Our comprehensive study leverages quantitative data analysis and qualitative insights from leading experts in Swiss manufacturing, enriched by our extensive experience supporting clients through similar challenges. This approach has helped us identify four key strategies—friendshoring, in-country production, make-or-buy decisions, and automation/digitalisation—particularly relevant for Swiss manufacturers and other globally diversified companies. By embracing these strategies, businesses can enhance their operational resilience and adaptability to geopolitical shifts, ensuring sustained growth in an increasingly complex international market. This study outlines effective strategies and reflects our deep understanding of the dynamic challenges our clients face, providing a trusted roadmap for navigating global dependencies.

Friendshoring

Moving relevant parts of the supply chain closer countries is increasingly seen as a viable strategy for reducing vulnerabilities within global supply chains by aligning more closely with countries that are not only geopolitical allies but also share similar economic and cultural values. This strategic alignment allows companies to leverage political stability and favourable trade agreements, improving supply chain reliability and cost efficiencies.

Our study highlights that Swiss manufacturers are particularly positioned to benefit from friendshoring due to Switzerland's strong global relationships and reputation for quality and reliability. Companies are encouraged to evaluate potential friendshoring partners based on political alignment, economic stability, and the ability to adapt quickly to changing market conditions.

In the Country, for the Country

The strategy of 'In the country, for the country' focuses on strengthening local production capabilities to serve domestic markets more effectively, thereby reducing the reliance on global supply chains that can be disrupted by external shocks such as pandemics or political conflicts. This approach supports local economies and aligns with growing consumer preferences for locally sourced products.

With their high standards and precision technologies, Swiss manufacturers are well-suited to implement this strategy by enhancing their local production facilities and developing closer relationships with local suppliers. The study underscores the importance of this strategy in promoting sustainability and reducing logistics costs, making it a critical part of risk mitigation.

Make or Buy

The Make or buy decision is a fundamental strategic question for companies looking to optimise their balance between cost, control, and flexibility. The study suggests that Swiss manufacturers need to carefully consider their core competencies and the strategic importance of their inputs in deciding whether to insource or outsource production processes.

It is better to produce critical components that require proprietary knowledge or entail high-security risks in-house, while commoditised items can be outsourced to reduce costs. This strategic evaluation helps firms minimise risks and capitalise on opportunities for innovation and specialisation by focusing resources where they generate the most value.

Automation and Digitalisation

The study points out that Swiss manufacturers are leading the way in integrating Automation and digitalisation to enhance productivity and reduce dependency on labour-intensive processes. Automation increases the consistency and quality of production, while digitalisation offers new ways to monitor and manage supply chains in real-time.

Our research highlights several case studies where Swiss companies have successfully implemented these technologies to create 'smart factories' that are more adaptable to changes in the global market environment. This reduces operational costs and improves the responsiveness to customer needs and market dynamics.