Concerns about an overconcentration of supply in certain geographies, combined with recent experience of global shortages and growing lead times, has strengthened the case for local sourcing and manufacturing.
This includes everything from personal protective equipment and life-saving drugs to essential foods and silicon chips. For the past three decades, supply chain operating models have often dictated that such products be manufactured in low-cost markets with plentiful labor – leading operations to expand worldwide. But as wage gaps have closed and logistics problems and other risks have mounted, calls to “reshore” production back to home countries have grown.
Supply Chain Disruptions are Frequent, Expensive and Often Hidden from View
Global supply chains are in a state of flux as organizations plan major changes in a post-COVID era.
With so many notable interruptions happening in a relatively short space of time, it is important to understand the wider impacts on businesses.
Disruptive, high-impact events are a regular occurrence. Companies average three significant supply chain disruptions per year.
In addition to the above, our research found that a majority of organizations would only know about a disruptive event if it came from Tiers 1 or 2.
Despite an increasing emphasis among organizations on reconfiguring their supply chains in response to disruptive events, significant disruptions are frequent, remain financially damaging and occur in places many organizations lack awareness of.
The fact that many companies lack insights into their extended supply chain calls into question the supply chain risk monitoring practices they currently have in place and suggests they still have some way to go in their journey to become operationally resilient.