The GEP Global Supply Chain Volatility Index research indicates that global supply chains are presently working more effectively than they have in a number of months. The indicator decreased from 0.48 in February 2023 to 0.32 in March 2024, reflecting the lowest level of supply chain stress seen since July 2020.
The demand for raw materials and components is no longer declining as quickly in Europe and the US as it was before businesses were able to successfully draw down some of their excess warehoused supplies.
Although the demand for components and raw materials is still weak globally, the trend is improving. Companies are increasing their purchases in some regions of the world, such as Asia, with manufacturers in China and India predominantly driving this, according to the research.
Global companies are cutting back their backup supplies as supplier lead times shorten and worries about supply and pricing disappear. Since July 2020, reports of safety hoarding have decreased significantly.
Since the beginning of 2023, labour shortages haven’t had a significant negative impact on suppliers, showing that the existing employment level is sufficient to meet demand. Since September 2020, business reports of inventory shortages have declined significantly.
Due to easing pressure on sea, rail, air, and road freight, global transportation costs have decreased somewhat below their long-term average.UK and North American supply systems are running smoothly. Supply chain conditions in Europe and Asia have nearly returned to normal.
“A time of lower demand has assisted in resolving supply challenges related to labour and material shortages, stockpiling, and We are currently observing early indications of improving demand. According to Binayak Shrestha, global head of services delivery, GEP, “despite high interest rates, demand for raw materials and components increased across Asia and declines eased across the US and Europe, so now is a good time for companies to lock in prices and key terms with suppliers for the upcoming months, which will also help tap down inflation.”
