5 Technological Innovations to Aid Businesses in Overcoming Geopolitical Risks in Supply Chains

2024 has seen geopolitical tensions continue to intensify with supply chains facing further disruption as conflicts hinder trade flows and resource shortages. For businesses in danger of struggling amid hardship, five technological innovations could help to continue facilitating growth.

The impact that geopolitical conflict has on global supply chains can’t be understated. Not only can trade become directly interrupted, but higher tariffs and shortages of resources like oil and gas can impact industrial production worldwide.

Fears over geopolitical instability have caused more business leaders to report greater levels of anxiety over the sustainability of their supply chains, according to AlixPartners’ Disruption Index.

The index, which draws insights from 3,100 surveyed executives, found that respondents reported holding more fear over investing and sourcing in the current geopolitical climate. CEOs expressed higher levels of anxiety, with 65% reporting high levels of disruption to their company.

As geopolitical tensions continue to grow in the Middle East, the Suez Canal shipping route for imports between Asia and Europe has become a particular source of disruption. Instances of attacks on merchant ships in the Red Sea also caused oil and gas prices to increase while hindering efforts to slow inflation.

These attacks have forced more supply chains to explore longer routes to deliver imports into Europe, causing widespread delays and further complications between all parties within chains.

However, emerging technologies could help to maintain supply chain efficiency while geopolitical tensions linger. Let’s explore five innovations that can help to ease anxiety levels in the supply chains of tomorrow:

1. Leveraging the AI and Machine Learning Boom

The artificial intelligence boom last year has heralded a transformative era for supply chain management. McKinsey data suggests that the use of AI in inventory control cna help to deliver a 20% reduction in inventory carrying costs and a 50% decrease in instances of running out of stock.

Modern algorithms and data analytics through the blending of AI and machine learning technologies can deliver far greater forecasting capabilities. 

This will not only empower more businesses to better anticipate market trends, customer behavior, and fluctuations in demand, but it can also look at prospective disruption across different areas of a supply chain and take decisive action to prevent running out of stock. 

The emergence of generative AI can help to optimize logistics and actively build orders in response to predictions over stock arrival times as supply chains become more volatile due to global uncertainty. 

2. Harnessing the Power of Blockchain

Another emerging technology that appears set to deliver greater transformation for the supply chain landscape is blockchain. 

Thanks to the decentralized framework of blockchain and the smart contracts that can help facilitate payouts based on meeting certain delivery and quality control criteria, the future of supply chain management is set to be far more transparent. 

Blockchain serves as an excellent solution for invoice management, freight monitoring, product traceability, and information processing. 

Because every block added to a blockchain is immutable and thus impossible to tamper with, end-to-end visibility can help businesses monitor their chains with crystal clarity and quickly identify geopolitical disruptions and precisely where they’re impacting the supply chain. 

Fundamentally, blockchains can eliminate the need for intermediaries and lower administrative costs while improving efficiency at all stages of the supply chain. 

3. Action-Based Prioritization

As we’ve touched on, prescriptive analytics can help to prioritize inventory actions by blending AI and ML effectively. This paves the way for manufacturing companies to optimize days of inventory (DOI) while improving inventory management as a whole. 

These intelligent supply chains cannot only actively monitor and make key inventory decisions, but they can also revolutionize the process in which businesses manage vendors payouts. 

Through the capabilities of advanced analytics and communication tools, it’s possible to leverage performance-based transactions and compliance in a way that offers a revolutionary way to manage vendors while streamlining interactions and inefficiencies.  

This means that you can not only deliver products to meet consumer demands but also collaborate with partners effectively enough to create an action-based prioritization approach to secure bottom-line growth and facilitate an intelligent supply chain throughout every area. 

4. Building an Augmented Workforce

An augmented connected workforce (ACWF) helps to shorten the time needed to onboard an employee to become fully productive and offer trustworthy levels of decision-making. 

In strategizing an augmented workforce, businesses can optimize the performance of human workers alongside innovative technology through dedicated analytics and skills augmentation. 

This helps businesses build a more intelligent workforce based on their capabilities to effectively counter the hazardous conditions posed by geopolitical tensions. 

An augmented workforce can overcome supply chain disruptions and bottlenecks by empowering employees to build a unified, cohesive strategy that accelerates and scales its best talent accordingly. 

In a recent press release, Gartner identified the emergence of the augmented connected workforce as a leading trend to impact supply chain technology in 2024, and given the prevalence of geopolitical unrest, its arrival could help more businesses to optimize more effectively throughout many steps of the chain during periods of intensified disruption. 

5. The Rise of Sustainability

This period of growing geopolitical uncertainty can potentially become a driving force in the adoption of more sustainably-focused supply chain technology. 

Not only can sustainable practices throughout chains improve regulatory compliance, but they also alleviate company dependence on oil and gas, which can become more volatile during periods of conflict. 

Ethical sourcing ensures that products and services are produced in a fair, safe, and environmentally friendly manner, and analytical tools can help to automate the auditing process of suppliers and discover opportunities that conform to core business practices and values accordingly. 

Additionally, blockchain can be incorporated into this process for more efficiency, and the added traceability and transparency of distributed ledgers can help prevent fraudulent environmental claims and boost authenticity. 

As an example, IBM’s Food Trust utilizes blockchain technology to facilitate a collaborative network of growers, processors, wholesalers, distributors, manufacturers, retailers, and many other key players to maintain visibility and accountability throughout the supply chain. 

Overcoming the Challenges of Tomorrow

Growing geopolitical volatility and uncertainty are likely to bring more disruption on both a humanistic level and for global supply chains. 

While we can’t predict what will happen tomorrow, technologies like artificial intelligence and blockchain can help us anticipate fluctuations in supply chains to ensure that businesses continue to deliver an optimal level of service for their customers. 

Although anxiety is still likely to linger throughout 2024, we can rest assured that no matter what the geopolitical climate looks like, it’ll be business as usual throughout our supply chains.