By now, everyone is painfully aware of the radical transformation shaking the world supply chain. Costs are rising, known suppliers are disappearing and, even if you can find someone who can get the raw materials to make your parts, finding an available shipping container at a reasonable price that can be delivered on time has become almost impossible.
However, many of these problems are more tactical issues that hard work and a tremendous network can resolve. While you are working on fixing those problems and keeping things up and running, there are four major global trends that will keep the supply chain world in a state of flux.
On everyone’s mind are the recent cyberattacks on the U.S. oil pipelines and meat supply. Contrary to decades of official policy, we committed a tragic mistake in paying off these hackers, making global criminal enterprise not only profitable but opening the door to the extortion industry that has a very low barrier to entry. Prior attacks came from China or Russia, but we will soon see the Philippines, India and Indonesia breeding their own homegrown high-tech criminals. And it won’t just be the big players they go after.
Not only is the cost of robotics dropping rapidly as volumes increase and more companies adopt this manufacturing methodology, it also provides a stable production platform should we be hit with biological attacks in the future. Machines do not need to worry about social distancing or wearing masks. Robotics palletizers are now commonplace, and many of the country’s largest warehouse distribution centers are close to full automation. Mistakes are reduced and safety is enhanced but it will create a significant unemployment problem for the folks who used to work in these facilities.
Plastic printing has been around for a long time, and given the cost and the slowness of the process, it was primarily used as a novelty or as a methodology in early-stage prototyping. However, recent advances have brought the cost down dramatically, while significantly increasing production speed.
Further, precision 3D printing of metal has not only lowered the bar as a production methodology but has opened the eyes of design engineers to thinking of devices not so much as a collection of individual parts but as a single unified system that can be printed in a single operation. Individual printed parts might still be quite expensive but when 40 of them can be combined into a single unified part, the practicality of 3D printing for production volumes can make sense.
After the conclusion of the Cold War, there have been relatively few major disruptions in global geopolitics and we have observed the decline and stabilization of Russia while participating in the ascent and prosperity of China. The changes reverberating since the COVID supply chain disruption have caused America, China and the European Union to dramatically rethink their positions on economic reliance. We are moving into a new phase of self-reliance and inward focus, having seen just how vulnerable we were when critical devices and foodstuffs were reliant on foreign sources. This will mean both opportunity and further disruption in standard supply chain models.
It’s a very difficult right now wrestling with suppliers that can’t make product and others that can’t ship product, but while your business grapples with solutions, keep one eye firmly planted on the long-term issues that will evolve out of these four major global trends and how they may affect your business and your competitive environment in the very near future.
David Iwinski Jr. is managing director at Blue Water Growth