US manufacturers invest in end-to-end monitoring and security for their supply chains in 2024
Visibility is top investment priority in 2024, followed by expanding distribution networks as Chief Financial Officers (CFOs) take stock of risks
Investment into increasing supply chain visibility will be the number one priority in the next 12 months to mitigate rising costs, according to a survey commissioned by BDO USA.
Of the 100 US-based manufacturing company CFOs asked, 45 will increase visibility in order to improve their ability to manage inventory and demand.
Behind this, 40 of the 100 CFOs surveyed said they would be expanding their distribution footprint and 37 would be looking for alternative suppliers in order to deal with increased risks of disruption.
A major risk perceived by CFOs is climate change, with 44 citing higher frequency and severity of natural disasters as their reason for relocating operations in 2024.
These factors are why a quarter of respondents said they plan to move operations to the US or a geopolitically close ally in the next 12 months, and 89% of surveyed CFOs will expand US operations this year.
Realigning distribution networks in response to higher consumer expectations is also part of the calculations behind these moves. This is the third greatest supply chain challenge according to the sample, as a more localised setup may help to reduce lead times and respond quicker to markets and consumers.
An additional factor is the increasing regulatory requirements as the industry moves toward more ethical labour and sustainable practices. Regulations such as the Uyghur Forced Labor Prevention Act, the European Union’s Carbon Tax Law and the OECD’s two-pillar global taxation framework represent an additional compliance requirement for firms.
Growing recognition of risks and the importance of supply chains to overall operational efficacy are bringing more attention from the C-suite to supply chains overall. Three quarters of CFOs anticipate that they will have a greater involvement in supply chain decisions in the near future.