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Supply Chains Will Drastically Look Different In The Near-Future

We’re going to witness something that hasn’t been done for about 30-40 years. The global supply chain is going to shift back toward the local level. For about three maybe four decades, many Western nations have off-shored their manufacturing. This has largely gone to places like Vietnam, India, China, and Bangladesh. Many Asian countries are now emerging from being developing economies to now developed economies. India has its own space program for goodness sake. Times are changing and the pandemic has only shifted this more. How will this affect your business?

Local suppliers

The biggest problem that businesses have is, Western manufacturing is high-quality but it’s just too expensive. For a long time, China has been the world’s sweatshop and this has meant, manufacturing has been done on a large scale. This has also led to poor manufacturing standards, products that don’t last very long and this is done by design. If products did last very long, people wouldn’t have the need to buy more in the near future. So what you have is a perpetual desire for more, thus, the manufacturing hubs in China keep going and going. However, now, since the pandemic, local suppliers are the key priority when it comes to B2B relationships.


Domestic quality

It’s hard to beat Western nations for sheer quality. One example o f where the Western hemisphere has the eastern hemisphere beat is food. Take for example Superior Farms. They make some of the best lamb in the world and they have often been chosen by restaurants and lamb-product brands for the sheer quality of meat they offer. The only other place where this kind of lamb is found is in New Zealand. But since America is the largest and most advanced economy in the world, getting supplies for this product is not an issue. Whether you’re a coastal company or in the midwest, you are not far from this brand’s reach.


How long will it take?

This is the million-dollar question, how long will it take for the manufacturing to swap from thousands of miles away in China and other Asian countries, to back home in the West? Well, experts are saying that it’s a geopolitical quagmire. Firstly, if manufacturing was moved out from these areas, this would sour relations with very prominent and soon-to-be powerful countries. Do Western nations want to make foes right now, when they are hurting from the pandemic? No. but, if they don’t change tack soon, many companies will go under. They have to begin to open up new factories, allowing domestic production to occur at an alarming rate. One thing that we aren’t thinking about it, who will do these jobs? We need skilled workers to make products again and we just don’t have that workforce around anymore. So, the next generation needs to be educated and trained in such professions. 

In the long-run, manufacturing will return to the local level but this will take a lot of effort. If you are a business, you should make preparations for doing business at the local level for the next few years. Supply chains are shifting back home sooner or later.

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