Global Supply Chains – Networks of Tomorrow

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Discover the latest supply chains trends and how corporates are shifting their strategies.

Trade remains the bedrock of the global economy – having reached a record USD32 trillion in 2022¹ – despite prevailing recessionary concerns and the risks around deglobalisation. In researching for the ‘Global Supply Chains – Networks of Tomorrow’ report, HSBC teamed up with East and Partners to understand global supply chains and the future of supply chain financing and sustainability.

HSBC has based this report on primary research conducted by East and Partners between August and October 2022, directly interviewing senior management from 787 corporations across 14 markets² in Asia Pacific, Europe, North America, Latin America, and the Middle East, to gather direct feedback about how they are managing their supply chains and interacting with their suppliers.

To effectively mitigate the risk of supply chain disruptions and rising freight rates, businesses (in Indonesia) should diversify their suppliers, establish contingency plans and invest in technology to increase supply chain transparency and agility
Riko Tasmaya | Managing Director and Head of Wholesale Banking, HSBC Indonesia

Shifting supply chain strategies

Organisations in Indonesia are concerned about counterparty risk, and they have also responded to supply chain disruptions from the last few years by increasing the excess inventory they are holding. They are also placing more importance on assessing their supplier’s sustainability credentials and digital integration status.

Inventory management

73%

of corporates in Indonesia are holding excess inventory

Important Factors

62%

review payment and financing terms when assessing suppliers

Top supplier locations

29%

of Indonesia’s suppliers are based in Mainland China

Navigating new market conditions

The need to manage currency and inflation risk has driven the adoption of risk management solutions in Indonesia. Organizations are looking into various ways to hedge against financial risk and are also reducing the number of their supply chain partners to focus on key suppliers

Trade finance

80%

use traditional trade finance programmes to fund their supply chains

Hedging financial risk

86%

use forwards to hedge against financial risk

Supply chain partners

73%

plan to reduce their number of supply chain partners

Ensuring supply chain resilience

Organisations in Indonesia are making use of digital banking solutions to enhance the efficiency of their supply chain. They are also investing in sustainability across their supply chains that their operations remain resilient for the future

Digitalisation

79%

of corporates in Indonesia use digital tools to better understand their markets and industries

Sustainability

51%

are requiring new suppliers to confirm to sustainability policies as part of their onboarding

Sustainable policy implementation

47%

have implemented environmental policies across their supply chains

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Disclaimer

https://unctad.org/news/global-trade-set-hit-record-32-trillion-2022-outlook-increasingly-gloomy-2023
From August to October 2022, we commissioned East and Partners to directly interview senior management from 787 corporations across 14 markets (Australia, Germany, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, mainland China, Mexico, Singapore, the United Kingdom, the United States of America, United Arab Emirates) to find out how they are managing their supply chains.

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