For decades, Supply Chain Management (SCM) thrived in a relatively stable geopolitical environment. Disruptions caused by natural disasters, labor disputes, or occasional trade tensions were usually exceptions, not the rule. But today, the landscape has dramatically changed. The once-predictable, just-in-time global supply chains are now under relentless pressure from escalating political, economic, and structural upheavals.
The Retreat of Globalization: A New Reality for International Business
We’re witnessing a seismic shift in the global business landscape, marked by rising protectionism, political fragmentation, and strategic opportunism. In this environment, globalization is in retreat, and companies that once relied on seamless global supply chains must now adapt to a fragmented world of great power rivalries and nationalistic policies.
This shift is not just a passing phase. It’s a structural transformation in the way businesses must think about supply chains. The resurgence of geopolitical tensions, often referred to as “Cold War 2.0, or the New Tech Cold War” has reshaped the global trade environment, giving rise to:
- Protectionist policies, tariffs and trade barriers, including “resource nationalism”
- Fragmentation of global markets and supply networks
- Opportunistic cooperation driven by short-term gains
- An overall sense of “every country for itself” (exp. America First)
Is globalisation really doomed? (Bruegel)
For international companies, these changes make political risk an inescapable factor in sourcing decisions. What was once an abstract risk is now an unavoidable and tangible cost consideration.
Disruption Is the New Normal for Global Supply Chains
In today’s interconnected world, the traditional model of supply chain optimization—focusing on cost reduction, efficiency, and lean inventories—is no longer sufficient. Disruptions can now arise without warning: port closures due to geopolitical tensions, export restrictions, or sanctions against key supplier countries.
The growing complexity of global supply chains, with suppliers hidden deep within multi-tiered networks, further complicates risk management. Recent events—such as the imposition of export restrictions on rare earth elements—demonstrate the necessity of assessing risk down to the raw material level.
China’s rare earth export curbs escalate global supply chain risks (Strategic Risk)
At the same time, mounting regulatory pressures are pushing companies toward localizing or “near-shoring” their supply chains. Whether driven by national security concerns or the need for greater resilience, this trend is a global phenomenon, not limited to any one region or country.
Adopting Supply Chain Resilience Management (SCRM)
In response to this new reality, businesses are pivoting from reactive risk management to proactive resilience-building. This shift is being formalized through the adoption of Supply Chain Resilience Management (SCRM) frameworks.
Key elements of SCRM include:
- End-to-End Transparency: Achieving visibility across all tiers of the supply chain, not just immediate suppliers, to better assess potential risks.
- Political and Regulatory Risk Assessment: Incorporating geopolitical scenario planning into the overall supply chain strategy to better anticipate disruptions.
- Continuous Monitoring: Leveraging data analytics to forecast disruptions and proactively adjust sourcing strategies through early warning systems and scenario planning.
- Mitigation Strategies: Developing redundancy plans, dual sourcing, and scenario-based contingency measures to ensure flexibility in the face of uncertainty.
Navigating the future: Building a resilient supply chain in 2025 (Supply Chain Management Review)
Resilience as a Key Competitive Advantage
The nation-centric fragmentation of global markets may signal the end of the old era of supply chain optimization, but it also heralds a new chapter of strategic opportunity. Companies that embrace resilience—not just as a defensive strategy, but as a catalyst for agility, trust, and long-term value—will be better positioned to navigate an increasingly volatile and uncertain business environment.
In this transformative period, resilience is no longer optional. It is the cornerstone of enduring competitiveness for businesses with international operations.
Dirk Müller VBU Partner Shanghai
MBA; Dipl.-Pol. (International Relations)
Further Readings:
Global Supply Chain Risk Report 2025: Navigating supply chain risks and insurability (wtw)
Geopolitics by Design: Rethinking Power in the Age of Critical Technologies (Fair Observer)
How Geopolitics Changes the Procurement Equation (BCG)
8 Tips For Navigating Global Supply Chain Risks In 2025 (Forbes)