Supply Futures

Geopolitical issues and rapid technological change threaten traditional supply chains. Read on to discover where the opportunities lie in the future and take action accordingly.

What is changing?

Supply chain

  • The success of Indiana’s advanced manufacturing industry depends on natural resources and a complex global supply chain that’s put at risk by environmental change.
  • Low oil prices of $25.4 per barrel (bbl) by 2030 will affect the entire supply chain.
  • Global automaker supply chains will shrink to a fraction of their current size.
  • Global supply chains are expected to shorten.
  • Demanding consumers will shape the future of global supply chains.
  • The push and pull of global value chains will build momentum for climate action and pressure U.S. companies to engage supply chain partners more deeply and keep pace with new global climate leaders.
  • Both tariff and non-tariff barriers could disrupt integrated supply chains between the UK and the EU.
  • Regional and local supply chains will need to be strengthened if global businesses are to locate or stay in them.
  • Vietnam’s rapid integration with South Korean supply chains could make it vulnerable.
  • Data-driven processes will generate $371 billion in net industry value for production over the next four years streamlining supply chains.
  • The rules of global trade are shifting and companies will need to make sure their supply chains have the agility and resourcefulness to deal with potential challenges and disruptions that may lie ahead.
  • Apple has pledged that all its supply chain will run on 100% renewable energy, and its data centers already run on 100% renewable energy.
  • Half of manufacturers will be benefiting from digital transformation in their supply chains by 2019.
  • RFID will move from the supply chain into the world at large.

Supply

  • Personnel and supplies could be delivered using launch vehicles to virtually any location on Earth within 30 to 45 minutes.
  • Using aerobrakes instead of propellant will expand by 30 to 100 times the number of asteroids where water and other supplies can be affordably delivered to markets in Earth orbit.
  • The supply of OLED displays will start to expand meaningfully in late 2017 and continue to be featured primarily on flagship smartphones in 2018 due to its high cost versus LCD technology.
  • There could be significant intensification of agriculture among alternate producers such as Brazil to increase supply.
  • Current business practices will contribute to a global gap of 8 billion metric tons in supply of and demand for natural resources by 2030.
  • The supply of industrial robots will reach 400,000 units by 2018 and grow by a rate of 15% a year.
  • Shortages of food, medicine, and basic supplies will probably continue to stoke tensions through 2017.
  • The melting of glaciers will affect people around the world, their drinking water supplies, water needed to grow food and supply energy.
  • By 2030 China will account for 37 per cent of world fish production and 38 per cent of fish supply for human consumption.
  • The global wafer supply will likely fall short of demand by 10-20% at the end of 2018.
  • Large additions to Australia’s housing supply are expected to increase vacancy rates and keep rent inflation low over the next few years.
  • Negotiations around Brexit and a potential second referendum on Scottish independence will inevitably create some uncertainty [in the Scottish market] over the next few years and may lead to prolonged shortage of farms and land supply.
  • The biggest risk for Facebook, Google and other digital giants is the increasingly limited supply of software engineers.
  • The EU predicts an increase in meat supply.
  • ASR could create about 152,000 acre-feet of new water supply per year by 2070.
  • Any gap between the UK leaving a European atomic power treaty and entering secure alternative deals would severely inhibit nuclear trade and research and threaten power supplies.
  • Any interval between the UK leaving Euratom and entering secure alternative arrangements would severely inhibit nuclear trade and research and threaten power supplies.
  • The significant U.S. ethylene supply and U.S. ethylene feed stock cost advantages will increase U.S. polyethylene production beyond domestic demand and support export volumes over the period.
  • Under a mainstream business-as-usual scenario, shale oil and tight oil could potentially constitute over 70% of U.S. supply in 2030.

Process

  • AI embedded within IoT may provide retailers with “guided intelligence” to mitigate risk proactively and address other critical issues throughout global supply chain processes.
  • The proposed rollback of methane emission limits on new wells and removal of limits imposed on existing wells along with the proposed modification or revocation of the Waters of the United States rule will reduce compliance costs for the industry and streamline the permitting process.
  • A new blockchain solution from IBM and Maersk will help manage and track the paper trail of tens of millions of shipping containers across the world by digitizing the supply chain process.
  • OPEC’s production cuts of 1.2 million b/d will accelerate the tightening process.
  • Data-driven processes will generate $371 billion in net industry value for production over the next four years streamlining supply chains.

Demand

  • Australia will also increasingly compete with demand for international abatement from other countries looking to meet their emission reduction targets under the Paris Agreement.
  • Current business practices will contribute to a global gap of 8 billion metric tons in supply of and demand for natural resources by 2030.
  • There has been recent evidence that a rise in US shale oil production will mean supplies rising at a faster pace than demand once again.
  • The global wafer supply will likely fall short of demand by 10-20% at the end of 2018.
  • The significant U.S. ethylene supply and U.S. ethylene feed stock cost advantages will increase U.S. polyethylene production beyond domestic demand and support export volumes over the period.
  • Global demand will remain solid thanks to greater U.S. infrastructure spending and robust demand from China.
  • Global energy demand is expected to double by 2050.
  • The International Energy Agency projects a 30% rise in global energy demand to 2040.
  • The main opportunity for Australia from India will come from increased demand for coking coal.
  • Indian coal demand will likely grow in the years ahead.
  • More than 50 per cent of Jamaica’s electricity demand will be met by renewables within the next two years.
  • FSRUs will be among the most-talked about topics as a major driver of LNG demand in an oversupplied global gas market.

Year

  • The Government of India and the Government of Tamil Nadu will provide A$300 million over the next three years to develop infrastructure for deep sea fishing off the coast of Tamil Nadu.
  • The amount of U.S. wind power generation capacity is expected to top 100 gigawatts by the end of next year.
  • Cryptocurrency is gaining traction and will most have more normalized uses in the next few years.
  • Total U.S. corn use in 2017 – ‘ 18 is forecast to decline 2 percent from a year ago as a slight increase in domestic use is more than offset by lower exports.
  • TaaS will provide 95% of the passenger miles traveled within 10 years of the widespread regulatory approval of AVs.
  • More than 50 per cent of Jamaica’s electricity demand will be met by renewables within the next two years.
  • ASR could create about 152,000 acre-feet of new water supply per year by 2070.
  • Negotiations around Brexit and a potential second referendum on Scottish independence will inevitably create some uncertainty [in the Scottish market] over the next few years and may lead to prolonged shortage of farms and land supply.
  • 59% of organizations expect to increase the number of positions requiring data analysis skills over the next five years.
  • The flow of water from Lesotho to South Africa will be 70 cubic meter per second for an estimated amount of 2.207 billion cubic meter of water per year.
  • Reducing the cost of solar PV to less than 6c / kWh and appropriate market conditions could see solar PV produce more than 30 per cent of Australia’s electricity within 15 years.
  • Data-driven processes will generate $371 billion in net industry value for production over the next four years streamlining supply chains.
  • Large additions to Australia’s housing supply are expected to increase vacancy rates and keep rent inflation low over the next few years.
  • Water managers are projecting significant regional shortages of drinking water and irrigation supplies in New Mexico over the next five years.
  • The supply of industrial robots will reach 400,000 units by 2018 and grow by a rate of 15% a year.
  • At the core of the OPEC meeting will be the question of whether the oil cartel will agree to extend the supply cuts into the second half of the year.
  • Vehicles driven by humans and powered with petroleum will dominate roads from Shanghai to San Francisco for years to come.
  • Precious metals are expected to decline by 1 percent this year and 1 percent next year as benchmark interest rates rise and safe-haven buying ebbs.
  • Growth in beef production in the years ahead will lead to further deflation in US beef prices at all stages of the marketing channel.
  • Indian coal demand will likely grow in the years ahead.
  • There are still great opportunities throughout Australia to buy property and achieve sound levels of capital growth and rental returns over the coming year.
  • The World wheat exports will trend lower to 178.35 mmt in the “next crop” 2017/18 marketing year.

Supply energy

  • The melting of glaciers will affect people around the world, their drinking water supplies, water needed to grow food and supply energy.

Risks

  • The success of Indiana’s advanced manufacturing industry depends on natural resources and a complex global supply chain that’s put at risk by environmental change.
  • Battery unit costs falling, but raw material prices are a risk.
  • AI embedded within IoT may provide retailers with “guided intelligence” to mitigate risk proactively and address other critical issues throughout global supply chain processes.
  • The biggest risk for Facebook, Google and other digital giants is the increasingly limited supply of software engineers.
  • Global timber shortages represent a material risk for Kingfisher.
  • The residual risk of any ELA operations borne by the ECB and the rest of the euro system would rise to unprecedented levels.
  • Low prices should not breed complacency about the supply risks in the market-the ongoing civil war in Libya.

Production

  • Data-driven processes will generate $371 billion in net industry value for production over the next four years streamlining supply chains.
  • IoT investment in production is expected to double from $35 billion to $71 billion by 2020.
  • Growth in beef production in the years ahead will lead to further deflation in US beef prices at all stages of the marketing channel.
  • Alongside high recyclability rates and sufficient smelter capacity, secondary lead production will remain the main driver of global supply growth.
  • The significant U.S. ethylene supply and U.S. ethylene feed stock cost advantages will increase U.S. polyethylene production beyond domestic demand and support export volumes over the period.
  • U.S. tight oil production proved even more resilient than expected during the price downturn and early signs indicate that it has been responsive to the recent upturn in prices.
  • There has been recent evidence that a rise in US shale oil production will mean supplies rising at a faster pace than demand once again.
  • By 2030 China will account for 37 per cent of world fish production and 38 per cent of fish supply for human consumption.

Water

  • Using aerobrakes instead of propellant will expand by 30 to 100 times the number of asteroids where water and other supplies can be affordably delivered to markets in Earth orbit.
  • The melting of glaciers will affect people around the world, their drinking water supplies, water needed to grow food and supply energy.
  • The flow of water from Lesotho to South Africa will be 70 cubic meter per second for an estimated amount of 2.207 billion cubic meter of water per year.
  • The proposed rollback of methane emission limits on new wells and removal of limits imposed on existing wells along with the proposed modification or revocation of the Waters of the United States rule will reduce compliance costs for the industry and streamline the permitting process.
  • The UAE will begin chipping off blocks of the iceberg above the water line and crushing the pure polar ice into drinking water which would be stored in large water tanks and filtered through a water processing plant.
  • Water managers are projecting significant regional shortages of drinking water and irrigation supplies in New Mexico over the next five years.

Supply cut

  • At the core of the OPEC meeting will be the question of whether the oil cartel will agree to extend the supply cuts into the second half of the year.

Supply rising

  • There has been recent evidence that a rise in US shale oil production will mean supplies rising at a faster pace than demand once again.

Supply chain partner

  • The push and pull of global value chains will build momentum for climate action and pressure U.S. companies to engage supply chain partners more deeply and keep pace with new global climate leaders.

Supply chain professional

  • By 2018, 65 per cent of supply chain professionals will have invested in 3D printing.

Market

  • Alternatives such as solvents used in the pharmaceutical and analytical industries possess a threat to the growth of the global acetonitrile market.
  • FSRUs will be among the most-talked about topics as a major driver of LNG demand in an oversupplied global gas market.
  • Negotiations around Brexit and a potential second referendum on Scottish independence will inevitably create some uncertainty [in the Scottish market] over the next few years and may lead to prolonged shortage of farms and land supply.
  • The transportation market for Li-ion batteries is forecast to reach 131GWh in 2025.

Growth

  • Alternatives such as solvents used in the pharmaceutical and analytical industries possess a threat to the growth of the global acetonitrile market.
  • Anticipated uptake of electric cars, the growth in small scale renewable energy supply and other disruptive factors in the energy system will pose big challenges for the power grid, but a bigger challenge in governing the change in who owns the energy system
  • Growth in beef production in the years ahead will lead to further deflation in US beef prices at all stages of the marketing channel.
  • There are still great opportunities throughout Australia to buy property and achieve sound levels of capital growth and rental returns over the coming year.
  • Alongside high recyclability rates and sufficient smelter capacity, secondary lead production will remain the main driver of global supply growth.
  • Slower economic growth and structural adjustment in China will continue to put downward pressure on global coal prices and limit market opportunities for U.S. exports.

Learn more

Questions

Sentiment Analysis

Supply chain sentiment has been mostly neutral for some time. Last months, blip, caused by fears of a hard Brexit and possible changes in US trade policies have largely dissipated it seems.

 
Topic map

Not surprisingly, supply futures are driven primarily by energy, food and water demand and trade policies. We recommend you further explore these topics forecasts at Shaping Tomorrow to gain further foresight on how supply chains may be impacted in the future.

Heat map

North and South America, India, and Australia have the biggest opportunities and risks with their supply chains going forward. China, Canada and Russia are in the second tier right now.

Time to complete: Athena, our robot, has determined which forecasts should be included in this Trend Alert. She found 6,699 forecasts in seconds to allow us to publish this summary in less than thirty minutes. She can turn these into PowerPoint slides and Audio files in minutes too.

Keep up to date: You can stay bang up to date on this topic here. Or ask us to set-up private topics for you (clients only) and achieve the same thing as this Trend Alert for your associates.

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