Two survey findings suggest, there is a change in the way manufacturing executives have shifted their focus from low costs and lean inventory, to stability and resilience in global supply chain. One survey was conducted by law firm Foley & Lardner LLP. Titled ‘Global Supply Chain Disruption and Future Strategies Survey Report’, the survey interviewed 150 manufacturing companies about general trends in supply chain management.
The second survey, ‘Accelerating Trends: Assessing the Supply Chain in a Post-Pandemic World’ looked specifically at a shift in supply chains away from China as well as how companies are using new technologies to improve efficiency. Seventy per cent respondents agree with COVID-19, companies will reduce their focus on sourcing from the lowest-cost supplier and 62 per cent expect the focus on just-in-time (JIT) manufacturing models will also decrease.
As per the survey, manufacturing executives are taking prudent steps to manage risk in their supply chains, with strengthening relationships and increasing transparency with suppliers and buyers as the top strategy identified by survey respondents. In addition, the 92 per cent of them are taking at least some action to create more visibility within their supply chains, including requiring more information on suppliers’ own risk management and continuity strategies.
The Foley report also analyzes the extent to which COVID-19 has accelerated the movement of production and sourcing away from China. Of the survey respondents who have operated in the country, 59 per cent have either already withdrawn operations, are in the process of doing so, or are considering it.
The Accelerating Trends report analyzes the key costs, benefits, and risks to consider in several regions that present alternatives to China. According to the survey findings, the result of this analysis has increasingly led companies to move supply chains closer to home to either US, Mexico or Canada
The Accelerating Trends report also identifies eight specific areas that may see greater investments and provides guidance on how they stack up against each other in terms of resilience, cost, and maturity.
