If you speak to anyone who works in supply chain, they're all experiencing massive disruptions. Traffic from Chinese ports has slowed significantly, these things take some time before they start affecting our store shelves. Some people will be quite surprised to see how many things rely on Chinese supply, such as pharmaceuticals. Even if a product isn't exported in a finished form from China, vast amounts of our low-level supply chains rely on China.
Well the business case as of late is that the global supply chain isn’t as resilient as previously believed, with all of the disruption seen during covid. Primarily with surgical masks and medical equipment at first, but now with nearly every good experiencing disruptions of some sort.
There's an underappreciated aspect of domestic manufacturing which is that it makes supply chains simpler. In China, it's not uncommon to order direct from the manufacturer. Someone at the factory will hand your order direct to China's equivalent of Fedex and it will arrive at your front door 3 days later.
Containerization forces the insertion of middlemen. Someone is in charge of breaking down a container and then storing it in a warehouse with a bunch of other products that can all get shipped at once to a consumer. The hidden tax from so many more people being involved in the supply chain is underestimated by a lot of people.
I'm not sure why this is being downvoted, its a valid comment.
Any stretched out supply chain for critical path items is at risk in any disruptive event. Globalization of your supply chain is fantastic at making stuff cheaper - but not at making the supply more durable.
It seems to me like the problem is just that supply chains aren’t legible. I forget where I read this from, but Walmart or Amazon would easily pay billions of dollars to know which shipments won’t arrive over the next few months because of the rolling wave of factory shutdowns.
Once you have that legibility, the extra step of snipping the globalized supply chains seems unnecessary. Some businesses will plan to maintain continuity with all international shipping stopped, and a few will receive subsidies and mandates to do so. Others won’t, and that’s fine too; there’s a ton of value in making our lives better even in ways that can’t be sustained during a crisis. (It’s worth noting that international shipping in everything but coronavirus-fighting medical equipment hasn’t stopped during the currrent crisis.)
For our business (New Zealand), while our customers are still active and are all primary industry/government type customers, our supply chain from various Asian countries is a mess. A friend of mines IT contracting firm is having lots of upcoming projects cancelled.
If your supply chain encompasses two countries then a disruption in either country will take you offline. If you keep everything in-house you only have to worry about one country.
You can also harden your supply chain by having multiple suppliers in different countries, so a loss of any one isn't an issue. For something like Covid-19 it's near impossible to avoid disruption, but for less-global outbreaks it can be a winning strategy.
It’s great thing to keep in mind but you make it sound like everything else in whole supply chain proces is perfect and this is the only thing that can go wrong.
All supply chain operations have many levels of risk attached to it and you always need to manage it.
Main risk you should make sure you don’t have to is to depend on shipment arriving on time. Plane crashing, fire in a delivery center, last mile truck crashing, heavy snow blocking roads, etc, etc. And that’s just shipping - there’s also risk with insurance company getting cofnused with you prescriptions, credit card getting denied, pharma company having production issues, etc, etc.
You have risks also with your local pharmacy, even if you aren’t disabled - again roads maybe closed, they may burn down, staff can catch some serious infection that will force closure, etc, etc
If you need critical meds, you need to make sure you always have enough of a buffer, as there’s many things that can always go wrong
Supply chains are still struggling from Covid, China lock downs, war, shipping rate increases, port backlogs, no fab capacity, etc. Component lead times are long, if not impossible to get.
How are you adapting your products so that you can still get to market?
What's the current prognosis for supply chains returning to stability?
The last I heard, the main culprits were (a) COVID shutting down Chinese factories; (b) cargo-ship related shipping delays; (c) COVID-related demand for work-from-home electronics; and (d) follow-on problems caused by hoarding.
My impression was that (a, b, c) are largely behind us now. Does that mean we just need to give things a little time?
It's going to happen, this is actually why I've re-focused on Supply Chain/Logistics as there is so much room for potential growth and re-capturing losses within them as I saw working in the Automotive side of Logistics and Supply Chain a few years back.
We're going through a very unique, but much needed, transition right now that will likely bring about the automated warehouses, distribution hubs, and transport depots we always read about in books and and sci-fi lore--and that so many feared. It also re-enforces the need for UBI now more than ever, something that not long ago was though to be impossible, yet is being pilot tested by Andrew Yang and Jack Dorsey as well as other places in the US, and even by YC itself!
I'm actually optimistic, and believe if we play it right it could in fact be the seeds that allow for a Post-scarcity economy one day on Earth, as so much is lost in critical supply chains, and having these over-extended international based ones may have done more harm than good, as they accelerated a race to the bottom system in terms of price and quality (even on critical things like Medical Supplies/Drugs) as so much went to China but also made most countries entirely dependent on the CCP and has way more Geo-political consequences than we can predict.
Right now I'm taking a course in Supply Chain Operations and my final will be analyzing the consequences from the displacement of critical manufactured goods (PPE) to China and the affects it has had during the onset of COVID, and now also recently due to the massive flooding in Wuhan and the surrounding areas of China [1].
The most optimistic delays in lead-time are 2-3 weeks, but if COVID showed anything, as we saw with Medical staff in the US and even Australia having to go months without PPE and wearing trash bags in lieu of actual medical grade PPE, is that its best to actually double that to get an accurate time.
But it wasn't all bad as it also saw many 3D printing hobbyists use the technology for ACTUALLY MEANINGFUL potential instated of printing trinkets you use to clutter a work desk. And some other companies, mostly in the automotive Industry, pivoted to making breathing apparatuses.
Every company that has some form of manufacturing is doing similar cost reductions.
Supply Chain is hard enough in a globalized world, and it's only gotten even harder now that a multi-year pandemic shutdown, trade wars, and tariffs are coming to play.
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