What has manufacturing learned since the supply-chain crisis?

It was only a year ago this season that the brunt of the supply-chain crisis was being felt by everyone from factories to Wall Street to American consumers.

The upheaval stopped the production of automobiles, HVAC equipment and other technical products as manufacturing companies awaited shipments of superconductors and metals like copper and tin.

While we’re still not back to normal, there are some things that manufacturing has learned during the crisis that will hopefully prevent the worst from happening again.

1.?????Localizing supply chains. For too many years, companies had moved their manufacturing overseas making it difficult to ship important parts back to the United States when the supply chain was at its most fragile. Companies like Ficosa have long understood that putting factories near our customers is more reliable than locating our factories away from our research and development teams. More companies are now reinvesting in American manufacturing as a result.

2.?????Sustainable is better. In addition to localizing supply chains, companies also realized how important sustainable manufacturing can be. Keeping factories local not only reduces shipping issues, it also cuts down on carbon emissions and pleases customers. Younger generations are more likely to buy from companies they view as good stewards of the environment.

3.?????“Just-in-time” manufacturing is outdated and unreliable. In order to keep costs down and save on storage space, many manufacturers limited their inventory. Now, companies are increasing their capacity to make use of materials when they are available.

4.?????Carrier consolidation makes the chain vulnerable. As another cost-saving measure, companies consolidated rail carriers from 40 to seven over the course of several decades. Shipping was also affected by consolidation since 80% of the world’s cargo is carried by only three shipping alliances. This may control costs, but it leaves the supply chain vulnerable to disruption. The supply-chain fiasco has caused many manufacturers to rethink this consolidation.

5.?????High-tech operations are essential. While the supply-chain crisis did highlight how important automation technology is to manufacturing, the ongoing labor shortage has also shown a spotlight on the need to invest in collaborative machinery. Cloud computing, artificial intelligence and building on the available Internet of Things technology are investments manufacturing is making to overcome these issues.

A slow return to “normal” is still in the making but “normal” certainly won’t look like it did prior to the supply-chain crisis of 2021-2022. The crisis showed that the old normal wasn’t safe, sustainable or resilient so American manufacturing should learn from these problems to correct and safeguard against the glut of inefficiency.

Ficosa has long understood the importance of sustainability and locating both our factories and our research and development operations close to our customers and partners. Our presence in 16 countries in Europe, North and South America and Asia has put us at the forefront to overcome future supply-chain challenges and tackle the environmental concerns over over-shipping.