SAP: US, UK & India elections 'will impact supply chain'

Supply chain leaders must accept that volatility is part of daily life, and plan accordingly, a leading industry expert says.

Tony Harris is Head of Marketing & Solutions at SAP Business Network, a collaborative spend-control platform. 

He warns that 2024 will continue to challenge supply chain leaders with “weather, unresolved geopolitical conflicts, shortages in food and medicines and labour disputes”.

He also points out that in the coming year, more than half the world’s population will vote for national leaders, with elections set to take place in countries including the US, UK, South Africa and India, among others.  

“Election results will undoubtedly impact businesses and supply chains,” cautions Harris, who adds that a potential impact of this could be "new trade restrictions that are implemented quickly in some countries". 

“As such, companies should be planning now,” he says. “They need to be researching potential alternative suppliers on-shore, or in other countries where there are no political and trade tensions.” 

He adds: “They should also look into capacity constraints, logistics implications, and import tariffs.” 

SAP: Upcoming elections will impact global supply chains 

Harris also points out that changes in government can also lead to domestic incentives “that make it more appealing to produce and buy domestically”. 

“Enterprise zones or investment zones where governments fund or subsidise production of key products can offset cost increases of moving production from a lower cost country,” he says.

“It’s time supply chain leaders realise that the list will never stop evolving,” Harris says.”Supply chains will always be volatile, which is why technology is no longer optional. Businesses must use integrated technologies to keep track of their suppliers, and their suppliers’ suppliers.”

Harris urges business leaders to embrace solutions that not only connect supply chain and logistics data across an organisation but that can also “organise a global network of suppliers – including logistics providers – in a single platform to enable efficient collaboration”. 

He adds: “This visibility gives leaders a heads-up on potential disruptions, allows them to quickly identify a backup plan, and provides other critical information like environmental impact.” 

Harris’s warning around the inevitability of disruptive events is borne out by recent extreme weather in California, which has seen flood warnings issued. 

New data from Coupa – the AI-driven cloud-based business spend management platform – show that the severe weather will impact two of the largest US seaports, LA and Long Beach. 

It also says critical agriculture and livestock production is likely suffer, at a time when they have never been more important to food security because of the US’s shift away from importing food products from countries such as China. 

Coupa data shows that US-based customer purchases from US suppliers increased 244.5% year-on-year in 2023 for food and beverage items.

It says that 2023 also saw an overall decline in the volume of goods shipped to the US from other major economies – most notably China, which saw a per-customer fall of 93%.