Starting in the 1970s, the world’s economies embarked on a process of progressive integration that led to the globalization of trade. Consumption rose, initially in the United States, Europe, and Japan, and later in China, India, Brazil, and other emerging countries. In the face of growing demand, flows of goods between countries and continents expanded, supported by lower customs duties, an increasing number of international agreements aimed at liberalizing trade, and a relatively stable geopolitical environment. As this evolution progressed, companies quickly realized that competition was shifting: the rivalry was no longer between individual businesses but between supply chains. In other words, competing effectively meant participating in competitive supply chains made up of suppliers, manufacturers, wholesalers, distributors, and sales networks located in the relevant geographic markets.
In Italy, this also led to the development of supply chains geared toward sector specialization, efficiency, and cost/price containment. For decades, companies turned to offshoring or relocating industrial operations abroad, integrating supply chains with small number of contractors located in regions offering low costs (particularly for labor), and business practices centered on lean management, minimizing inventory, and optimizing and fully utilizing production capacity. These measures served as the benchmark for the policies of every company exposed to escalating competition. Logistics functions until then were considered peripheral compared with the core business; now they were moving to the forefront, becoming an essential component of companies’ broader supply chains. It is worth noting that Italy’s logistics sector accounts for approximately 9% of GDP, and transports 1.2 billion tons of goods by land every year—ranking third in Europe by revenue, after Germany and France, according to estimates.
However, over the past five to six years, the geopolitical and macroeconomic landscape has been abruptly transfigured following a series of events, all with a powerful impact on the global economy. First, the sudden spread of the Covid-19 pandemic triggered an unprecedented health crisis and the partial shutdown of industrial activity, with ramifications that rippled across many sectors, most notably electronic components. Then came the dramatic Russia-Ukraine war, accompanied by soaring oil prices and difficulties in sourcing numerous commodities such as wheat, corn, nitrogen, and potassium used in fertilizers. This was followed by the escalation of tariffs initiated by the US Administration, which raised the average customs tariff rate for manufacturing from 1.9% to 4.7% between 2024 and 2025, according to estimates (WTO, 2026). The most serious fallout was felt in sectors such as automotive, transportation, machinery, metals, textiles, and apparel. More recently, the conflict in the Middle East has resulted in disruptions in the Strait of Hormuz, which, like the conflict in Eastern Europe, remains unresolved.
These crises have translated into higher prices for relative raw materials, creating a climate of uncertainty with varying effects in the short term and, if the crises persist, over the medium to long term. In the immediate future, the imbalance between supply and demand causes prices to surge, with repercussions for inflation, private consumption, and public investment, decelerating GDP growth. Over the medium to long term, a major concern is the contagion effect: the higher cost of energy, raw materials, and components, together with prolonged unavailability, may be passed on to products and services, progressively affecting every sector of national economies.
Italy, in particular, is a processing economy with an industrial system built on sector specialization (machinery, textiles and apparel, food, and pharmaceuticals) as well as the production of intermediate goods, such as mechanical and electrical components, automotive components, chemical products, plastics, and paper. Combined with a high degree of dependence on foreign energy – with net imports of around 76%, compared with a European average of 57% – and an energy mix heavily skewed toward natural gas, all this means that the country’s industrial production is exposed to greater pressures than those experienced by comparable economies.
Against a backdrop of uncertainty regarding both the severity of these crises and their duration, companies have begun to take defend themselves by revolutionizing the way they design and manage their supply chains, adopting strategies focused on resilience, agility and transparency, redundancy, and sustainability.
The first step is the redesign of logistics architectures according to Local-for-Local principles, divided suppliers into geographic areas (Europe, the Americas, and Asia). In each one, companies seek alternative contractors and design independent sourcing and distribution systems so that supply chains in one region are insulated from constraints that may emerge in another. Transparency and agility are pursued through investments in the digitalization of information flows and artificial intelligence. Companies are utilizing AI to develop multi-scenario planning systems, predictive models of consumption trends, simulations to optimize transportation routes and inventory management, and systems for monitoring and reporting.
These provide a clearer picture of market dynamics, which in turn allows companies to respond rapidly to contingencies by reconfiguring supply chains. To ensure redundancy, businesses are diversifying suppliers, accumulating strategic inventories, and opting to maintain excess production capacity, which can be used in the event of shutdowns at parallel facilities. Sustainability, meanwhile, involves tapping into renewable energy sources and decarbonizing industrial processes, retrofitting facilities to optimize energy consumption, and using electric transportation or vehicles converted to run on plant-based biofuels or bio-LNG (SOSC – SDA Bocconi, 2026).
These measures require strong internal coordination and corporate governance capable of anticipating changes in the broader environment. This means treating crisis management as an integral part of normal business operations, and reconfiguring supply chains as a strategic choice that can make the difference between potential success and guaranteed failure.
This article can also be read in Repubblica Affari&Finanza (in Italian) as part of the joint Idee per la Crescita initiative. In addition to Alberto Grando , the supply chains event featured Alessandro Manzo , Partner, KPMG, and Luca Galantina , Global Head of Value Chain, Pirelli. For all other articles and videos from the event (in Italian), click here .
