Supply chains are no longer neutral: What Mark Carney’s Davos speech means for Canadian businesses

At Davos, Mark Carney delivered a speech that goes beyond geopolitics. For companies managing supply chains, especially in Canada, it sounds like a wake-up call.

In his speech, Carney states that “great powers have begun using economic integration as weapons” and that “supply chains are vulnerabilities to be exploited.” He is naming a reality many businesses are feeling: disruption is no longer accidental, it is structural. While Carney’s speech primarily addressed macro-economic impacts, supply chains in Canada will have to prepare for change.

For decades, supply chains were optimised for cost, speed and scale. Global integration was assumed to be mutually beneficial and predictable. Carney challenges this presumption head-on, describing a world where integration itself can be used as a source of dependence and pressure by large players.

In a geopolitical context, this means dependency on large actors such as China and the US. At a micro-economic level, this can be translated to an organisation’s dependency on the US as a market for their growth or relying on only a few large customers for their revenue. Many of these concepts have been thoroughly researched and discussed in risk management theory. Canadian organisations will need to rethink their supply chains.

Building new supply chains and resilience at the same time

Carney is careful not to promote isolation or a world of economic fortresses. Instead, he highlights the need for balance:

“A world of fortresses will be poorer, more fragile, and less sustainable.”

Under a new paradigm, where Canada collaborates with other mid-sized economies, supply chains are still global. But the US market will not be the default for growth, and China will not be the default for supplies. Instead, we’ll have to reroute supply chains to serve new customer markets and source from new supply markets. This can mean both building domestic manufacturing capabilities and developing domestic markets, but also investing more in growth in Europe, South America and Asia.

This means we cannot utilise existing networks to service these markets. Nowadays, it’s easy to import product to Canada and serve the US market. Under a new paradigm, we’ll have to think of adding storage facilities in Europe, South America and Asia if we want to meet customer expectations. This completely changes how we think about inventory positioning, and changes many of the trade-offs we have used to optimise for cost.

A diversification of customer markets and sources increases complexity for supply chains, while on the other hand it brings long-term stability and robustness because it moves away from single points of failure. Carney repeatedly points to diversification as a response to growing uncertainty.

More suppliers, more regions, and more trade lanes only create value if they are supported by strong planning capabilities. Without them, diversification risks becoming expensive and unmanageable.

What we need to adapt as supply chain planners

Proliferation of assortments, markets and supply creates complexity through an increase of SKU’s and locations to manage, further decreasing forecasting accuracy and time needed to create these forecasts. Modern forecasting engines which can deal with rapidly changing circumstances are required to keep forecasting quality on par. Of course, machine learning and AI will play a pivotal role here, but they need to be integrated into understandable and purpose-built workflows to be scalable. Scalability of analytics, especially, is a concern when diversifying.

Besides a scalable forecasting engine, we’ll need to think about our inventory positioning. In a world where everything is 1-click away, inventory needs to be positioned close to customers. This will increase inventory investments overall, meaning it’ll be even more important to prevent obsolescence and make conscientious decisions about what you put and where you put it. Trade-offs will need to include your time-to-consumer, cost of inventory and the cost of lost sales. With the time-to-consumer being a critical element to stay competitive.

Flexibility and responsiveness are two other keywords. Diversification will require us to be responsive and flexible to changes in the market. Using models that not only scale easily, but also adapt readily and allow your supply chain to change day-to-day are critical to success.

Why this matters for Canadian companies

Carney positions Canada as a stable, credible, long-term partner in a fragmented world. This creates a real opportunity for Canadian businesses to play a stronger role in regional and diversified supply networks.

But credibility requires execution. And that’s where we need to bring a strong planning skills to the table.

How Slimstock helps Canadian companies build resilient supply chains

At Slimstock, we work alongside Canadian companies facing exactly these challenges.

With local teams on the ground in Canada, we help organisations move from reactive supply chain decisions to structured, data-driven planning by enabling:

• scenario-based planning to anticipate disruption,
• inventory optimisation under uncertainty,
• smarter trade-offs between service, cost, and working capital,
• and supply chain strategies that support diversification without losing control.

In a world where resilience can no longer be improvised, better planning becomes a competitive advantage.

Canada has the resources, talent, and partnerships to be part of the solution. The question is whether supply chains are ready to support that ambition.

Download our white paper on building resilient supply chains in an uncertain world to explore how Canadian companies can strengthen their planning capabilities and turn volatility into a strategic advantage.