Jane Enny van Lambalgen Sees Supply Shortages for 2024

The global security situation is skewed, and the pressure on supply chains continues. The conflict in Ukraine still simmers. Then there is the war between Israel and Hamas in Gaza and the resulting threat to maritime shipping through the Red Sea by the Houthi rebels. Expert Jane Enny van Lambalgen sees other dangers lurking in the background for the supply chains in her report.

(Frankfurt) “Companies and consumers need to prepare for supply shortages in 2024,” predicts Jane Enny van Lambalgen, CEO of the consulting and management firm Planet Industrial Excellence. She explains: “There are more black swans roaming the globe than ever before.” A “black swan” refers to unpredictable events such as a pandemic, “where many seemingly unimaginable occurrences announce themselves long in advance.” Jane Enny van Lambalgen cites the tightening of the security situation around the globe as one such factor affecting supply chains.

Conflict over Taiwan is foreseeable

“The attack by the Houthi rebels in the Red Sea may still pass as a surprise, but the conflict between China and the USA over Taiwan has been foreseeable for a long time,” the management consultant gives as an example of a smoldering conflict that, if it erupts, will lead to “massive supply shortages.” Furthermore, she is certain that the fighting in the Gaza Strip will have global repercussions on many supply chains in 2024. “High-tech components made in Israel are found in numerous technical products. If the developers there are deployed to the front, many new developments will be delayed,” says the management expert. Additionally, it cannot be ruled out that the Houthi rebels could find imitators in other significant maritime routes.

Jane Enny van Lambalgen also considers the increase in extreme weather events such as floods, droughts, and wildfires due to climate change to be equally foreseeable. Damage to infrastructure and manufacturing facilities caused by this could literally lead to production failures and supply shortages overnight.

Honest risk management is essential

Jane Enny van Lambalgen advises the economy to adopt “honest risk management that takes geopolitical tensions, natural disasters, and cyberattacks on the company and the supply chain into account.” Her recommendations include: at least two suppliers for each component, ideally spread across two different continents, and flexibility in software to quickly adapt to necessary semiconductor changes.

She explains: “With the establishment of new development and manufacturing capacities for semiconductor chips in Germany, politics has set the right course to reduce international dependencies in a key sector. Nevertheless, companies are well advised to rethink their specific chip dependencies as well.”

The “diversification of supply chains” is what van Lambalgen calls “the order of the hour.” “Companies that try to return to their old model of supposedly stable supply chains after the end of Corona are maneuvering themselves into a dead end,” warns the UN advisor.

Recalibrating the balance of Just-in-Time

In Just-in-Time manufacturing, Jane Enny van Lambalgen “strongly advises recalibrating the balance between timely delivery and safety stock.” She says: “In case of doubt, it is better to strengthen delivery reliability at the expense of costs than to potentially be unable to deliver at all.”

According to the management expert, this also applies to securing critical raw materials, whose extraction areas are often located in politically unstable regions. She gives an example: “Those who rely on certain raw materials from Africa must monitor the geopolitical situation with a focus on China and Russia. The political significance of the BRICS countries should not be underestimated in other regions either.” Van Lambalgen points out that entire industries depend on critical raw materials, including electronics, the automotive industry, the energy sector, and medical technology.

Supply Chain Act becomes a stumbling block

As another “stumbling block” in supply, the management expert has identified the new Supply Chain Act. She explains: “Despite all compliance checks, it can never be completely ruled out that a pre-producer suddenly turns out to be non-compliant, in the worst case, even in public. Companies are therefore well advised to consider this worst-case scenario in their planning and to have alternative strategies ready.”

Jane Enny van Lambalgen is a founding partner and managing director of Planet Industrial Excellence and a member of United Interim, the leading community for interim managers in the German-speaking region, and the Diplomatic Council, a global think tank with advisory status at the United Nations (UN). She works for companies as an interim manager for strategy, operational excellence, turnaround, supply chain management, and digital transformation. As a temporary manager, she takes on positions as CEO, managing director, COO, delegate of the board of directors, supervisory board, and advisory board in medium-sized businesses. Her focus is on international operations with an emphasis on production, supply chain, and logistics.

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