Rocked by the pandemic, global supply chains reboot
The sheer logistical feat – executed prior to the Trump Administration invoking the Defense Production Act – nevertheless harkened to patriotic wartime mobilizations of the early 1940s. The White House took its victory laps. GM’s repurposed plant in Kokomo, Indiana, got its 15 minutes and a visit from Vice President Mike Pence.
Interestingly, cost analysis getting lumped in as merely part of a holistic thought process – as opposed to being pretty much the sole driver – underscores how significantly pandemic-related disruptions are altering supply chain strategies. Short-term disruptions, whether owing to Superstorm Sandy or SARS, were warning signs, but they went unheeded; lean logistics remained the norm.With a world thrown into crisis, supply chains broke apart and the true cost of single source and regional dependencies came into view. Money saved over the years having low-cost but far-flung suppliers, and limited rainy day reserves, aren’t topics that dominate conversations among logistics managers and the top executives to whom they report.
Looking for increased reliability, UK-based Warwick Acoustics, makers of high-end headphones, shifted away from getting its supplies from China where the company butted heads with trade, language and time zone issues. Now Warwick uploads a CAD file on to the 3D Hubs platform and desired parts automatically get routed to a suitable supplier with capacity and put into production, according to Schöffer.
"We are seeing firsthand how companies are refocusing strategies and adapting to create more flexibility,” said Davy Brown, Chief Technology Officer-industrial solutions, at electric sensor maker TE Connectivity. Covid-19 will permanently change how companies approach supply chain management, reversing the trend toward lean supply chains, he said.
Among the biggest beneficiaries of the away-from-China supply chain shift: Vietnam, Taiwan and Mexico, they said. Right now, no Minneapolis-made product has brought more attention to the complexities of the global supply chain than 3M'sN95 medical masks. Demand for the"gold standard" protective face wear not only exceeds 3M's capacity to make them but also the scope of the entire mask-manufacturing industry, according to Mike Roman, CEO, Minneapolis-based 3M, speaking a few weeks ago on CNN.
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