Restructuring The Supply Base
Handy Tech Group Inc.
Application & business problem solving experts of mechanical components sold to industrial OEM's in the Southeast
For many industrial manufacturers, the response of the supply network to the COVID-19 pandemic, geopolitical challenges, and natural disasters thrust supply chain resilience into the limelight. But the pendulum appears to be swinging back, with costs and margin pressures once again at the forefront as companies reevaluate and restructure their supply chains.
Deloitte’s new report, “Restructuring the supply base: Prioritizing a resilient, yet efficient supply chain”, highlights why and how many companies are now prioritizing a resilient yet efficient supply chain as they work to optimize the balance between performance and cost. These approaches often include expanding to locations in the United States, or to locations closer to end consumers, and also working more closely with free trade partners of the United States. However, this restructuring is not exclusive to the US, or North America, but is occurring globally.
Supply chain restructuring often motivated by achieving efficiency and profitable growth
For many, part of the strategy for maintaining healthy margins and achieving profitable growth is rooted in reducing company exposure to supply chain disruption, while employing cost reduction techniques and capitalizing on government policies supporting domestic growth. Presently, concerns over the indirect impacts of geopolitical instabilities on supply chains have grown as the first quarter of 2024 saw an uptick in supply chain challenges as a primary business issue for manufacturers (Figure 1). Both global transit times and the Manufacturing Supplier Deliveries Index have increased during the first quarter of 2024 and will likely motivate companies to maintain a focus on resilience.