How about the systems that turn raw materials into products, and deliver them into the hands of customers? Brian Straight’s article, published on logisticsmgmt.com, describes the instability of supply chains after a pandemic.

  • Supply chains are not yet stable. Some areas of the market are experiencing positive momentum, while others are suffering from unemployment and falling rates. The latest ASCM and KPMG Supply Chain Stability Index suggests that the market is trying to return to the pre-pandemic norm, but with some differences. The index is divided into three areas – freight, labour, and inventories – and overall uncertainty is keeping the index elevated.

 

  • The growth of sea and air transport is being driven by reshoring and nearshoring – strategies that businesses use to move production back to, or closer to, their home country, often in response to the risks associated with globalized supply chains. Reshoring is the process of companies moving their manufacturing or business operations back to their country of origin after previously moving them abroad, usually to reduce costs. On the other hand, nearshoring involves moving production or services to another country that is geographically close to the company’s home country. Nearshoring is usually motivated by the desire to reduce costs, without sacrificing the ability to maintain a certain level of control and quality.

 

  • Supply chains continue to face labour challenges, especially now that a major portion of manufacturing is moving from China to Mexico and Canada.

 

  • The current challenges in freight markets are due to inventory levels. Manufacturers and retailers are scrambling to balance existing inventory, and are rethinking their “just-in-time” strategies.

 

  • It is anticipated that supply chain instability is likely to persist for some time. While the push for nearshoring/reshoring continues, new challenges and instabilities need to be addressed.

 

Source: https://www.logisticsmgmt.com/article/supply_chain_stability_remains_elusive_notes_new_report_from_ascm_and_kpmg