In a recent article published by Logistics Management, Rosemary Coates, executive director of the non-profit group, Reshoring Institute, shared some very interesting insights about challenges global supply chains continually experience. She makes a great case that all manufacturers should be prepared for their next inevitable supply chain disruption.
Supply chains have become increasingly global and that necessitates the need for continually updating supply chain risk mitigation plans. She states that American companies have a new understanding that the “least expensive supply or manufacturing options may ultimately bare the highest risk.” Additionally, she stated “tier two and tier three suppliers that are delivering parts to tier one suppliers must also be evaluated for risk, as single-source and sole-source parts and products have always been tagged with high risk.”
Absolutely incredible insight from Ms. Coates and we suspect that there are some manufacturing companies that have not thought about the sub-supplier’s effect on tier one single source suppliers and the dangers that could exist.
One of the very interesting parts of this article included results from their 2019 Annual Survey of Global Manufacturing. During the years of 2017 and 2018, which the 2019 survey was based on, the follow issues were top of mind from the survey respondents and their level of importance.
Delays in shipping 71%
Production Schedule Delays 63%
Inconsistent Quality 55%
Substitutions 38%
IP Theft 31%
This same survey asked the manufacturers to express reasons they might consider reshoring at that time and here is what was on their minds, in order of importance.
International Logistics Costs 70%
Proximity to Customers/Markets 55%
Total Cost of Ownership 51%
Risk Mitigation 50%
Quality Issues 49%
Latency in Supply Chain 45%
Time to Market 43%
Intellectual Property Issues 34%
Rising Labor Costs 30%
Sustainability Considerations 17%
US/State/Local Incentives 16%
Positive PR and Marketing 12%
While we do not have a crystal ball to predict what the 2020 Reshoring Institute’s Survey of Global Manufacturers results will be, we are pretty sure that the following categories will receive a much higher percentage of concern this time around.
- Risk Mitigation
- Rising Labor Costs
- Positive PR and Marketing
- US/State/Local Government Incentives.
We’d actually be shocked if Risk Mitigation does not receive the highest level of concern from the survey respondents. And, if it does not, we really have to question whether or not the manufacturers responding to the survey are truly focused on protecting their businesses from future disruptions.
Are you concerned about future disruptions? When you have a partner on your side, you can rest easy. Reach out to us today to learn how we can mitigate your risks and help you get the most value out of your supply chain.
to receive our FREE white papers: