The conventional wisdom at this time is that most of the world has moved on from the pandemic (except for China); therefore, supply chains will return to “normal.” Unfortunately, this is not the case. The world has permanently changed and supply chains are going to face continuing challenges for decades to come. Among those challenges are:
Supply chains will remain under constant threat of disruption for the next decade
Supply chains operate best when the world is peaceful and stable
A smoothly running supply chain requires “buffer stock,” which is challenging with declining population demographics
There is a conflict between environmental, social and governance (ESG) goals and supply chains optimized for cost and speed. If we prioritize ESG, we will need to contend with supply chain risks
Supply chain technology will become the big venture capital category winner as companies continue to make investments in technologies that can help them mitigate their supply chain challenges
Great stock returns & developed nations economies booming with the moving of factories to cheap labor nations with lax environmental and labor regulations.
Long term problems-the world’s demographic of aging means less young workers driving competition for workers & wages upward. Pollution & climate change increased from moving manufacturing to nation with lax environmental laws. And lastly political discontentment & upheaval from worker class that lost their good paying jobs with benefits to overseas workers & automation.
So hidden costs-environment & political/social discontentment in developed world for cheaper goods. Worth it? Another example of short term trumping long term thinking?