SUPPLY CHAIN MANAGEMENT a view beyond noting that a certain shipment will be late ; instead , we tried to frame the problem on a larger scale and determine what it might mean for our customers . Everyone has heard about the recent problems of container and vessel throughput in the Port of LA / Long Beach . We noted that constraint and expected the surge of volume to move inland to drayage , rail , carriers and warehousing . We knew a bottleneck would always float to the next constraint , then the next and so on . It is supply chain 101 . To anticipate and mitigate these complications , we first and foremost talked with our customers about what to expect during every phase of COVID . Second , we constantly communicated statuses internally and externally – we knew this communication would be important . During uncertain times everyone craves new information . Third , we anticipated the floating bottleneck within the global supply chain ; we saw the risk of a large surge of volume overwhelming each constraint and reserved additional warehouse capacity to help assure continuity . We were able to leverage our expertise to mitigate risks , and to communicate with customers and help them to prepare to minimise disruption
Where is the supply chain going ?
There is a lot of noise and a few mixed signals in the data we are tracking . Bloomberg studied what company executives have been saying in their conference calls , specifically how often they have been mentioning onshoring , reshoring and nearshoring ( Figure 2 ). Early in the pandemic , these were all mentioned frequently . This fell away later but in Q1-Q2 2022 , when the disruption caused by COVID started to wane , people started to realise that this problem had to be solved . The recent increase in chatter suggests that these topics are going to accelerate in importance as the after-effects of COVID wear off . A report by McKinsey in May 2020 , just after the start of the pandemic , asked supply chain executives how they would handle the constraints they were seeing . They spoke mostly about dual sourcing , increasing inventory and nearshoring supply ( Figure 3 ). McKinsey returned to the same people a year later to ask what they had actually done . More had increased inventory than had said they would , dual sourcing was increased too , but they did not do nearly as much nearshoring as they said they would . Essentially , their strategy to handle the constraints had been inventory . Interestingly , in 2021 , the US imported more goods from China than ever before . Despite our intentions to onshore and nearshore , we are clearly not there yet . There are multiple reasons why this is so that are usually missing from most reshoring discussions . We believe nearshoring will not be easy or fast . Labour market constraint , both macro and micro , will surface . NIMBY - “ not in my back yard ” - will emerge as an issue . The transition is also likely to be slowed by regulatory and quality systems requiring requalification and certification of new vendors and manufacturing plants . And , of course , determining which step in the manufacturing process to decouple from some overseas location will pose a design challenge because many countries have vertically integrated . Actylis believes that nearshoring will happen – we would not have made so many Western acquisitions if we
Figure 2 – Mentions of reshoring , offshoring & nearshoring in corporate presentations , 2020-2022
Supply chain
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