The Age of Smarter Supply Chains

Global trade isn’t breaking; it’s bending into a new shape. From Davos 2026 comes a clear message: the world is moving toward a multimodal trade system with regional hubs, diversified partners, and flexible corridors—and supply chains must keep pace. We dig into structured volatility and what it means to design for resilience without throwing efficiency overboard, challenging the blanket claim that just in time is obsolete.

We walk through the core signals: goods trade still growing faster than global GDP, weakened institutions like the WTO reshaping flows, and policy moves such as a potential EU–India agreement that could touch a quarter of global GDP. Then we focus on the real engine of competitiveness—technology. AI-driven logistics optimization, digital traceability for sustainable value chains, industrial metaverse applications for training and predictive maintenance, and early quantum use cases are transforming how leaders sense, decide, and act. With richer data and faster analytics, efficiency becomes the outcome of smarter systems rather than a risky cost-cutting exercise.

The heart of the conversation tackles just in time. Pandemic-era pain sparked a loud narrative that JIT failed, but the evidence shows misapplication, not a broken philosophy. Toyota-style JIT assumes variability and manages it through tight coordination. Recent research demonstrates how digital tools—AI forecasting, IoT visibility, digital twins, autonomous planning—boost adaptability and recovery speed. The sustainable upside is real too: lean systems cut overproduction, energy use, and emissions. The future points to hybrid models that blend JIT efficiency with strategic microbuffers, regionalized sourcing, multi-sourcing, and flexible contracts.

Our takeaway is simple and actionable: build intelligent just in time. Keep lean principles, layer on digital intelligence, and design resilience as optionality rather than stockpiles. If you’re leading a supply chain through policy shocks and tech acceleration, this is your operating model for speed, stability, and sustainability. Enjoy the conversation—and if it resonates, subscribe, share with a colleague, and leave a review to help others find the show.

Transcript

SPEAKER_00 0:08

Hello you're listening to Chain Reaction.

Setting The Davos Agenda

Multimodal Trade And Fragmentation

Efficiency Versus Resilience Debate

Tech As The Supply Chain Engine

The Case For Just In Time

Evidence From Research

Hybrid Models And Sustainability

Misconceptions, Geopolitics, And Costs

Closing Message And Show Mission

Tony Hines 0:10

I'm Tony Hines and it's good to have you along with us today. Great episode popping down the track in just a few seconds, so stick around, stay tuned, and stay informed. Subscribe to Chain Reaction, you'll be first to know when new episodes are out, and you'll never miss an episode. Well in today's episode I want to discuss some of the big questions and some of the discussions that have been going on at Davos 26 in Switzerland. Lots of world leaders present at the conference and all kinds of discussions on the table. But the thing that we're interested in is what they're saying about global trade and supply chains. Davos 2026 put global trade, supply chain resilience and frontier technologies at the centre of the agenda, with leaders warning that the world is shifting towards what they call a multimodal trade system rather than returning to old style globalization. Supply chains were described as entering an era of structured volatility, driven by geopolitics, industrial policy, and rapid technological acceleration. And here are some of the highlights. Global trade is fragmenting but resilient. It isn't collapsing, it's reorganizing. The World Economic Forum reported that global goods trade is still growing at two and a half percent annually, slightly faster than global GDP, despite tensions. Instead of a binary world, globalization versus decoupling, Davos leaders described a multimodal trade system, multiple regional hubs, diversified partners, and more flexible trade corridors. Economic nationalism, tariff battles and weakened global institutions, especially the World Trade Organization, are reshaping trade flows. The EU signaled a major push towards a historic EU India free trade agreement, potentially covering a quarter of global GDP. And you can also listen to the special episode I did where Ursula von der Leyen laid out EU strategy. Supply chains are moving from efficiency to resilience is the message. But I think sometimes these discussions are behind the clock, because we've been talking about this for quite a long time now, and I think efficiency is still there, I think we're in a multimodal situation here. Because efficiency will remain, but resilience too is necessary, as is agility. The era of just in time is over according to what they're saying at Davos. Resilience is now a growth strategy. But I don't think the era of just in time is over. I think just in time will always be a concept in supply chains that will remain important. And I'll tell you why after we've gone through this summary. A WEF report released at Davos found that three and four business leaders now prioritize resilience over pure efficiency. Now there's the message, pure efficiency in supply chain design. We're no longer just focused on cost, I think that's the message. And that's the real issue here. They talk about structural volatility, which is being driven by geopolitical fragmentation, industrial policy shifts, energy transition pressures, and technological disruption. Companies and governments are being pushed to rewire global value chains using new tools to assess risk, capacity, and regional vulnerabilities. DP World highlighted three priorities for future trade universal access to trade, efficient tech enabled supply chains, and low carbon digitally integrated trade systems. DP World, of course, is a big shipping company. In technology, the engine of the new trade order, the key message was that artificial intelligence, digitalization and industrial tech are redefining competitiveness. Technology magazine has noted that Davos 2026 is heavily shaped by debates on AI, digital transformation, climate tech and energy demands. Leaders emphasized AI driven optimization of logistics and manufacturing, digital traceability for sustainable value chains, industrial metaverse applications for predictive maintenance and training, and quantum computing's emerging role in material science and climate modelling. China's technological rise was a major geopolitical theme, with analysis arguing that China is quietly winning in trade, tech and climate, aligned industrial strategy. Now let's return to that question about resilience taking over from efficiency. And I'll tell you why I don't think this is the case. There might be discussion about that, and it's obviously to emphasize that it isn't just about efficiency as the sole main purpose, which of course lots of supply chain conversations in the past few years have moved away from a focus on pure efficiency to other things, such as resilience and agility, and of course the transformation that can take place through tech. Now that latter point, the transformation through tech, is important because the technological revolution that we're currently going through has obviously shifted the game. And it shifted the game in a number of ways when it comes to supply chains. It means that we can get far more data from every aspect of the supply chain faster than we ever could. And not only can we do it faster, but we have the means to process that data efficiently through artificial intelligence and machine learning, and to transform it into actionable insights that can change the game of how we organise our supply chains for the benefit of the partners in that particular supply chain. And that means we can make it more efficient without having to solely focus on efficiency, because efficiency can be taken care of to a large extent by the employment of appropriate technology tools. And so I don't think that game is shifting. And because of those technology tools also, I think we have the capability, which we perhaps haven't had so much in the past, to operate just in time supply chains very efficiently, and to employ them to the benefit of organizations and of course to the benefit of resources, making sure that we don't waste them. So we can reduce waste, we can eliminate pollution in supply chains through this process of employing the tech and becoming efficient in the processes we carry out. And just in time is here to stay. Not only is it here to stay, but it can be enacted effectively and more efficiently in different types of supply chain. And so I think the discussion that just in time is gone and that mindset that says that is actually wrong. My view is that just in time will remain in some industries, not in every industry, but in industries where we have fast moving consumer goods, changing habits of consumers, where there are higher risks, where holding inventory is very expensive, needs to have more efficient approaches to how it handles its supply chain. And one of those approaches which has been developed over a long period of time is just in time and just in time processes. And just in time, which has its roots in quick response, is of course essential for efficiency in supply chains. So I don't think we should let that one go. And I think it's a mistake to argue the way some people argue that just in time is dead. It's jumping on a bandwagon, and I think what's happening in just in time is it's transitioning, it's transforming into a system that will become seamless, but it will be the tech that will drive the just in time approach. And so it will be there in the background without having to focus and having all the trials and tribulations that many businesses did have in the past because they were trying to manage those processes manually to a large extent. So I think just in time systems will mature, transform, and remain in some form in many supply chains as we move forward. It will be much easier to manage just-in-time systems with the tech developments we have today than those in past times. And so to say that just-in-time systems are dead, which appears to be what was coming out of this Davos discussion, is quite a mistake, I think. It's a misstep, and it's throwing the baby out with the bath of water. Rethinking just in time. The future is smarter, not slower. The idea that just in time manufacturing is dead has become a popular narrative since the pandemic, but the evidence tells a more nuanced story. Recent academic research shows that just in time is not only compatible with resilience, but can enhance it when combined with modern digital technologies. Read my blog on this topic. I have a detailed article that explains why. The myth that just in time failed because it depends on predictability is simply that. It's a myth. Many commentators blame just in time for supply chain failures during COVID nineteen, but peer reviewed research contradicts this simplistic view. A 2023 study published in Production and Operations Management argues that the pandemic exposed misapplications of just in time, not flaws in the philosophy itself. The authors noted that just in time was never designed for long, globally stretched supply chains with weak supply chain integration. The study highlights that Toyota style just in time assumes variability and manages it through tight coordination, not blind predictability. Failures occur where companies adopt just in time theatre, cutting inventory without investing in visibility, supplier relationships, or process discipline. The conclusion, just in time didn't fail, it was poorly implemented. It was cost cutting in the guise of just in time, and that's why it probably failed, as people argue, just in time's failed. It's not just in time that's failed, it's the application. There is evidence that digital technology strengthened just in time. A 2025 systematic review of supply chain resilience, looking at the research in the Global Journal of Flexible Systems Management, showed that digital technologies dramatically improve adaptability, visibility, and real-time decision making. The technologies that they looked at, artificial intelligence-driven demand forecasting, Internet of Things enabled real-time tracking, digital twins for scenario simulation, predictive maintenance, and autonomous planning systems. These tools reduce the uncertainty that critics claim makes just in time obsolete. The review concludes that the resilience is increasingly achieved through dynamic capabilities, the ability to sense, respond and adapt, which digital tools enhance. And that aligns perfectly with a modernized just in time approach. The research says just in time can improve resilience when modernized. A 2024 paper titled Just in Time Manufacturing for Improving Global Supply Chain Resilience argued that just in time, when enhanced with those digital technologies and diverse sourcing increases adaptability and recovery speed. The authors proposed a resilience-focused just in time model built on real-time visibility, multi-sourcing, localized buffers, data-driven scheduling, and lean waste reduction principles. Just in time's emphasis on waste reduction, flow efficiency and process discipline support resilience when paired with modern tools. And this directly contradicts the idea that resilience and just in time are opposites. They're not. They can coexist. In sustainability, there is evidence that just in time reduces waste and emissions. Lean just in time systems are strongly associated with lower overproduction, reduced warehouse energy use, lower material waste, smaller carbon footprints. These sustainability benefits are well documented in operations management literature and are reinforced in the 2023 POMS study, which emphasizes just in time's role in resource conservation and waste minimization. Abandoning just in time entirely would risk a return to bloated high emission supply chains. The emerging consensus may be hybrid models, not abandonment. Industry analysis, the future of just in time, balancing agility with resilience 2024 showed that companies are moving towards hybrid models that combine just in time efficiency, just in case buffers, digital intelligence, regionalized sourcing, and flexible contracts. This is consistent with the academic literature. Resilience is not about stockpiling, it's about flexibility, optionality, and responsiveness. The real future, intelligent just in time, and that's what I argue for. Based on the evidence, the next generation of supply chains will rely on lean principles of just in time. Those principles, waste reduction, flow optimization, lower environmental impact. They'll rely on digital intelligence, AI forecasting of demand, in real-time visibility and predictive analytics. And resilient strategies will include multi-sourcing, regional hubs, strategic microbuffers. This is not the end of just in time, it's just part of its evolution. And it's important we don't forget that. The conclusion, my conclusion, just in time isn't dead. It's getting smarter. The strongest evidence from recent academic and industry research shows that just in time was never the root cause of pandemic era failures. Digital technologies now make just in time more viable, not less. Just in time and resilience are complementary when implemented correctly. Sustainability goals make lean systems more important than ever. The future is a hybrid model, just in time, plus digital intelligence, plus strategic resilience. And in short, as I've said, we shouldn't throw the baby out with the bathwater. We should give the baby sensors, AI and real-time analytics. QED. If you want to read any of those particular articles I referred to in this discussion, Just in Time for Supply Chains and Turbulent Times is in production and operations management 2023. Supply chain resilience a critical review, Global Journal of Flexible Systems Management 2025, and Just in Time Manufacturing for Improving Global Supply Chain Resilience International Journal of Engineering Technology Research and Management 2024. They'll give you some insight into the facts. I think what often happens with the misinformation and the wrong emphasis and the wrong conclusion, it's often because we assume that pandemic shutdowns, poor congestions, container shortages, factory closures, sudden demand spikes, labour strikes, and extreme weather events are something we want to identify as an issue, and we want something to blame, and just in time just happen to be in the way. I don't think it was just in time systems that caused all those things. And when we talk about a single disruption anywhere in the chain, halting production everywhere else, of course it can. And we have examples such as the one dollar chip shortage which stopped fifty thousand dollar cars from being built. But one swallow doesn't make a summer. We talk about geopolitics today and we assume that just in time needs stable political relations. It's obviously better if there are stable political relations and we can reduce friction in the supply chain. But the system doesn't rely on that. The philosophy exists. Whether there are US China tensions, whether there's export controls on semiconductors, whether there's sanctions and counter sanctions, trade weaponization, regionalization of manufacturing, often those things are caused by politicians. They put friction in the system. And it's often because they don't understand the implications of the policies that they're implementing. In supply chains we always have to manage around those things. Those are what we call externalities. We have to take account of them, yes, we have to adapt our systems and our approaches, and we have to have solutions for the problems that are placed by others in the chain. We'd all agree that efficiency is not a single metric, but it never has been for quite a long time. But to focus on one thing if you say, well we've gone away from just in time to resilience, that's a mistake. Because resilience has to live alongside the systems that we implement. If we don't do that, we'll put our costs up, things will become much more expensive, and it'll be because we're managing the supply chain system poorly, not because of a system which says we can't do just in time anymore because nothing's predictable. There's no certainty. Well there never really was certainty, it's just that we assume certainty in particular circumstances. It's obviously far more disruptive in today's economy than it ever was, but a lot of that has come from political mentors elsewhere in the world. And if you pursue a mentor that says just in case beats just in time, that's a very big mistake, because just in case means you have to hold lots of just in case inventory, which is no good for anybody. So be careful what you wish for. In today's fast-moving global economy, supply chains aren't just operational, they're strategic. In Chain Reaction, we deliver clear insights, expert analysis, and forward-thinking perspectives for leaders who want to build real competitive advantage. Each episode unpacks the trends, technologies, and decisions shaping the future of supply chain performance. If you're committed to smarter strategy, strong resilience, and agility and staying ahead of industry change, this is the podcast designed for you. This is Chain Reaction, all about supply chain advantage with Tony Hines. Listen, learn and lead. Thanks for joining me on Chain Reaction. I'm Tony Hines, and remember, every decision in your supply chain creates a reaction. Make yours a competitive advantage. Until next time, stay informed, stay prepared, and stay ahead. With Chain Reaction. Bye for now.