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  • Writer's pictureBruce Rubin

The Supply Chain in a Changing World

Double exposure, handshake, logistics

What is happening in the world today is hopefully a once in a lifetime event. However, who can truly count on that over the next few years if the virus is not truly eradicated and a viable vaccine is not produced what the world and its Supply Chains will look like. The flu still sickens and kills thousands each year though vaccines are available and highly suggested for most of the population. We are dealing with a virus that is a great deal worse than the flu.

One thing is certain. The world’s Supply Chain will not look like it did prior to the COVID 19 pandemic. Companies need to take into consideration total inventory exposure not only cost of the product. Many will need to find new, local resources for their products and in some cases the total cost of acquisition will be lower. Companies that manufacture products here need to look for ways to cut cost by investing in robotics and other automated processes so labor is minimized.

Margins need to be reviewed with the exposure to potential inventory that cannot be sold because a customer has discontinued the product or has found a less expensive competitive product.

Both manufacturers and purchasers need to revisit what margins are “needed” versus “wanted” versus “attainable” in the post-pandemic world.

As a Sourcing Professional, I and others who provide similar services should be brought into companies to help the internal professionals take advantage of our domestic networks. We can uncover sources that the internal people have no access to. The Thomas Register and other similar resources provide “access” to companies but relationships and deep contacts will pay off better than “send me a quote” notes to these companies.

Companies depending on their product lines and productive capabilities should investigate expanding their internal manufacturing capacities as well.

Companies would be wise to look at equipment that would augment their capabilities and expertise. As an example, an Injection Molder could invest in packaging equipment that would allow his company to deliver finished packaged products to consumer products distributors. This process would reduce handling and shipping costs to another sub-contractor.

Talent can be hired once the pandemic is over to provide capabilities that now do not exist within companies. This talent may be more readily available since some employers will not be able to withstand the loss of business caused by the pandemic. The bottom line is American manufacturers need to open their minds and eyes to doing business differently and bringing in talent on a permanent or temporary basis that can lead them to new ideas and processes so they can be competitive in the “new global economy”.

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