The world looked dramatically different as the pandemic of Covid-19 subsided. The supply shock that started in China in February and the demand shock that followed as the global economy shut down exposed vulnerabilities in the production strategies and supply chains of firms just about everywhere. Temporary trade restrictions and shortages of pharmaceuticals, critical medical supplies, and other products highlighted their weaknesses. Those developments, combined with the U.S.-China trade war, have triggered a rise in economic nationalism. As a result, manufacturers across the world have been under greater political and competitive pressure to increase their domestic production, create employment in their home countries, decrease or even reduce their dependency on risky sources, and reconsider their use of lean manufacturing strategies to mitigate the quantity of inventory held in their global supply chains.
The challenge for companies was to make their supply chains more resilient without weakening their competitiveness.
To meet that challenge, the company should first understand its vulnerabilities and then consider a number of steps:-
- Uncover and Address the Hidden Risks.
- Identify the vulnerabilities.
- Diversify the supply base.
- Hold intermediate inventory or safety stock.
- Take Advantage of Process Innovations.
Leave A Comment