Shoring Up Operations for Growth
7 Jun 2021
The pandemic wreaked havoc across every industry, and companies in the manufacturing and mobility/transportation sectors were not spared. The result? Companies are re-evaluating their supply chains and operations in a post-COVID environment.
Realigning the Supply Chain
For the past 20 years, manufacturing moved operations from the U.S. to East Asia to take advantage of cheap labor. This approach dominated manufacturers’ strategy, paving the way for a status quo where low-skilled and large-scale manufacturing was done in China. But COVID-19 — coupled with rising wages in East Asia, trade tensions, and a tariff war between the U.S. and China — undermined the business logic of a long, extended supply chain with all of its potential chokepoints along the way.
Today, the status quo is no longer tenable: The impact on the supply chain of a tanker running aground in the Suez Canal and bringing shipping to a halt is no longer a “what if” scenario.
Companies with operations abroad are looking to shore up their logistics and move operations closer to the U.S. And it’s not just U.S. companies making these calculations. Increasingly, foreign companies are building plants in the U.S. and in nearby countries to be closer to the world’s biggest economy — and to position themselves strategically for growth.