Climate change and global supply chains: a Scottish perspective
GlobalScot Bill McRaith is the former Chief Supply Chain Officer at PVH (Calvin Klein, Tommy Hilfiger). He also held senior supply chain roles at Walmart and other global retailers. Here, he shares his expert opinion on how to unlock Scottish productivity and ambition – read his insights.
The shifting landscape
“The global supply chain is facing unprecedented transformation. While climate change is creating more severe weather patterns, the fundamental disruptors are varied.
“The true catalysts transforming global supply chains mark the end of the 30-year model of long, linear offshore supply chains. They are:
- The consumer
- Retail margin pressures
- Deglobalisation
- Trade policies
- Sustainability legislation
Beyond weather: the real drivers of change
“Today's environment demands something different. During my time at Walmart managing the supply chain across many of their product categories, I witnessed a tipping point when making certain products offshore no longer made economic sense.
“Take flat-screen TVs, for example. There's zero financial logic for manufacturing these overseas anymore as they're highly automated with minimal labour requirements, occupy substantial shipping space, and quickly become technologically obsolete, including, while in transit.
“These could be manufactured in Scotland at comparable costs while eliminating both perishability concerns and import duties.”
“The push back today is the same push back I had when I moved to China in 1990 to build manufacturing capability. People told us there were no skillsets in China, no infrastructure, no investment. I have heard these words repeatedly across country after country as we successfully expanded our manufacturing into new regions."
Scotland's untapped potential
“Scotland has remarkable assets for a manufacturing renaissance:
- Abundant water resources
- Significant renewable energy capacity
- Strong education system and university partnerships
- Strategic geographic location
"One of my dreams is to create a Scottish eco park, similar to those we created in Sri Lanka and Ethiopia, that create thousands of quality jobs, bringing together major retailers in partnership with global manufacturers, and local suppliers."
The new model: Project Interlace
“As climate legislation like the EU's Green Deal gains momentum and trade barriers continue to rise, businesses need new approaches.
“Our Project Interlace initiative develops a model that significantly increases retail profitability by combining global supply chains with regional manufacturing hubs and local production centres. This approach creates resilience against trade and climate disruptions as well as policy changes.”
Beyond climate: creating cultural change
“Scotland's greatest challenge may be cultural. Having built manufacturing in 30 countries worldwide, I've observed how different regions approach investment and collaboration.
“For Scotland to capitalise on the de globalisation and climate-driven reshoring opportunity, we need industry and government champions with an upbeat vision, collaborative approaches across businesses, a cultural shift toward embracing opportunity, and greater willingness to work together on shared infrastructure."
The path forward for Scottish businesses
“For Scottish businesses to thrive, two opportunities stand out:
- Identify reshoring opportunities in electronics, apparel, and other sectors
- Develop industrial park models where manufacturers share facilities and infrastructure and common inputs to reduce costs and accelerate output"
“Climate change is reshoring global manufacturing, creating an unprecedented opportunity for Scotland. The question isn't whether Scotland has the capability – we absolutely do – but whether we have the mindset to seize it.
“We can either watch others capture the opportunity, or build a collaborative vision that positions Scotland as a manufacturing leader in the new, more sustainable supply chain emerging from climate disruption.”
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