Introduction: Upheaval in global supply chains

There is no recent historical precedent for the current disruption in the modern highly integrated global supply chain system that has developed over the last three decades.

What is unfolding in supply chains globally is not only disruptive, it is also historic. This is the first major disjunction in the synchronized supply chain system that has developed over the last 30 years of globalization. Moreover, the intense new focus on inflation adds to the urgency to understand what is ahead for supply chains in 2022.

Supply chains used to be something that only supply chain managers talked about. Now it is part of the profit reporting by major companies and a significant factor in inflation and, for some countries, in GDP. It is why consumers are experiencing delays in their online orders. And it resonates in anguished discussions ranging from retail shop owners to major manufacturers to disappointed customers to prime ministers and presidents.

COVID-19 has been a significant factor in driving the disruptions, although not the only one, as this report makes clear. There are significant capacity, logistical, and labor challenges. Recently, the chairman of the US Federal Reserve warned that the Omicron virus variant will add even more pressure in 2022 to supply chain systems, which are already under intense pressure.

Rather than a “sprint” to resolve the supply chain problems, we think it is more like a marathon. This report seeks to provide an integrated perspective on where we are in that marathon and when we will know when we may be getting closer to the finish line.

We introduced this team of IHS Markit experts, who cover a broad spectrum of the world economy, in a webinar a few weeks ago. Now, in this report, they provide forward perspectives and analyses on the supply chain challenges for 2022:

• Delays and disruptions for manufacturers and deliveries on a scale never recorded in our 30 years of PMIs
• Why the container shipping networks continue to be jammed
• The continuing constraints on the different “families” of computer chips—and new constraints coming, affecting auto output and the price and availability of new and used cars
• The growing strains on capacity in world oil
• How agriculture is being affected by shipping and labor shortages and the push to automation
• The impact of endemic shortages of labor and materials
• The growing significance of geopolitics and ESG on supply chains and company strategies