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Resilient supply chains are fundamental to our national security and economic prosperity. The pandemic-induced collapse of global supply chains has launched a national movement to strengthen domestic manufacturing.
In his June 2021 editorial, ASSEMBLY's editor in chief John Sprovieri discussed President Biden's February executive order to review critical U.S. supply chains. I would like to build on John's analysis and offer advice to the Biden administration.
Shortening and closing supply chain gaps for essential products will immediately benefit the following industries: personal protective equipment (PPE), medical device manufacturing, electronics and defense. Sixty percent of reshoring cases after March 2020 mention the pandemic as a factor in the decisions. Already, reshoring cases among manufacturers of medical devices and PPE are double compared with last year.
The volatility and uncertainty resulting from trade wars and the COVID-19 pandemic, coupled with increased consumer demand for faster delivery, customization and responsiveness, is helping to promote reshoring and foreign direct investment (FDI) in the United States. Reshoring and FDI are both motivated by the same logic: the agility and financial advantages that companies achieve by producing near their customers.
If there's a silver lining to the COVID pandemic, it might be that it encourages U.S. manufacturers to consider reshoring. Last year's shortages of personal protective equipment, ventilators, pharmaceutical ingredients and other medical products opened a lot of eyes in board rooms and in Washington.
Since 2010, more than 4,700 companies have brought back some or all of their manufacturing operations and sourcing to the U.S. Despite COVID-19, reshoring was up in 2020.
On March 26, Stellantis announced that it would temporarily close five North American assembly plants starting April 5. The affected plants are in Illinois, Michigan, Mexico and Canada. At press time, the plants were expected to be closed through mid-April.
On Demand The past two years have severely strained the global supply chain. Short-term fixes are no longer enough; reshoring assembly is now viable and profitable. Consumer Packaged Goods brands can now control and meet regional demand with agile and digital high-speed assembly.