Supply Chain Issues Persist, One Year into COVID-19

We’re now a year into COVID-19, after a tumultuous 12-month stretch of supply chain disruptions, lockdowns, panic buying, and mounting questions about global trade. No one can tell the future, but there are signs in the present that signal the need for change moving forward — namely the fact that, even a year in, many supply chains still haven’t fully recovered.

Manufacturing supply chains are notorious for being some of the most complex, spanning across the globe. While this complexity has helped manufacturers perfect their value streams and source affordable materials reliably, it’s also left them open to vulnerabilities during COVID-19. Now, many of the largest domestic producers are weighing the pros and cons of reshoring.

Examples of lagging recovery

The United States’ inability to get a handle on the coronavirus isn’t doing it any favors in terms of supply chain reliability. That said, many of the issues still crippling supply chains emanate from outside the country.

Ford has delayed the launch of its much-anticipated 2021 Bronco, citing supply chain problems. The SUV will now launch in 2022, showing Ford’s inability to rely on its supply chain to rebound quickly enough to keep the launch timeline in the same year. Ford and the auto industry aren’t the only ones waiting on supply chains to coalesce. Consumer goods companies, household products manufacturers, and many more are still waiting on lead times to return to normal.

Realistically, anything coming from overseas is still subject to delays. The problem is, many companies rely on overseas production, shining a light on one of the major buzzwords of 2021: reshoring.

Reshoring offers opportunities for stability

There’s no doubt that supply chain recovery takes time, but for manufacturers, supply chain delays have a direct impact on everything from profitability to customer relationships. One year into the pandemic and manufacturers are quickly moving past the point of understanding and into impatience.

The most straightforward solution is reshoring. The question is: will shaking up supply chains even more lead to long-term stability? For many, the answer is yes. According to a survey conducted by accounting firm EY, “as many as 83% of multinational executives were contemplating so-called “reshoring” or “nearshoring.”

For others, supply chains are stuck in limbo, too sticky to reconfigure domestically but too costly to leave subject to global headwinds. It’s a situation that could force the hand of many manufacturers if supply chains don’t rebound in the first half of 2021.

Shakeups will continue into 2021

Whether or not companies choose to reshore their supply chains or wait out current struggles, there’s bound to be uncertainty in the immediate future. Manufacturers will continue to face delays until they can reestablish supply chains closer to home and with more control — or until they reforge the stability of their global supply chains.

The good news is that there’s hope for manufacturers who are willing to take control of their own destiny. According to a Brookings Institution report on supply chain restructuring, “new paradigm for competitive resilience is necessary in order for companies to redesign their supply chains for the long haul without reverting to their pre-pandemic practices.”

Regardless of what manufacturers choose to do, it’s increasingly clear our supply chains can’t go back to what they were.

Looking for a repair and maintenance partner that’s close to home? You can always count on the professionals at Global Electronic Services. Contact us for all your industrial electronic, servo motor, AC and DC motor, hydraulic, and pneumatic needs — and don’t forget to like and follow us on Facebook!
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