You know how the old adage goes, keep your friends close, and your supply chain closer. Well, not really. But there are many sound reasons why keeping your supply chain close to home is a sensible strategy. To make this work, you need an agile supply chain team.
How close is your supply chain to your business? What strategies are you implementing to ensure a strong and agile supply chain? How strong - or how weak your supply chain directly impacts the performance of your business. Keeping your supply chain close to home is a practical strategy.
Even before the onset of the coronavirus, deglobalization was happening and global supply chains were becoming less attractive due to trade wars, environmental concerns, and political turmoil.
Facts, stats, and trends paint a clear picture: this pandemic has made the overdependence of the US and other countries to China more obvious than ever.
The nation supplied 83% of PPEs – protective clothing, gowns, glasses, and masks in its wake– despite domestic efforts to diversify sources and increase production at home. The case is evident for non-medical supplies as well.
The US struggled to increase mask production and ordered 3M to increase N95 masks production under the “Defense Production Act of 1950.” However, the effort to stop over-dependence on China turns out unsuccessful because the states still want to procure cheaper Chinese medical devices and PPEs.
All the supply shortages and import overreliance have awakened the US about overdependence on other countries.
Opposite to what was happening to the rest of the world, China still dominated the supply chain in 2020. According to STATISTA, the nation’s exports recorded a total amounting to about US$2.6 trillion, which is over a trillion more than the United States.
With the overreliance of the US on imports of different product types, it is becoming clear that the authorities must consider reshoring or transferring supply chain operations back home, or at least closer to home – like to Central America.
What’s the key to rethinking supply chain strategies and systems? Having an agile, solution-focused, flexible team.
A supply chain team can’t rely on playbook methods and executing old plans when the circumstances already merit recalibration.
While having supply chains closer to home is a practical strategy — you need an agile, solution-focused team to lead the way, implement changes, and be on top of the situation.
Summing Up
Supply chains can be brought back closer to home, if not back home.
Ally-shoring will serve as a foundation for strong, secure, and smart borders. It can ensure the smooth-sailing movement of both people and goods, create a strong security in the Western hemisphere, and lead to resilient and independent supply chains that aren’t fully dependent on giant exporters far from home.
Finding the balance on how much should be imported from other countries and within the country is a sound and practical step to solving the current supply chain challenges.
Thinking long-term, the real investment is building an agile supply chain team that can creatively solve and lead the way no matter what global or local challenges arise.
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