Industrial supply chains have grown in complexity and international in scope over the past decade. The reason behind this increased complexity is simple, to reduce costs. In my book without warning, one of the warning signs that a silent problem might be present is, “When there is a willingness to embrace complexity, while simultaneously sacrificing transparency. Symptom: The business becomes too convoluted and complex to understand. Nothing makes sense anymore.”
Today, the world is on the verge of a massive contraction, one we haven’t felt or experienced in many decades. However in some respects, this one will likely be more profound, because it will break supply chains without warning. For instance, reports now surfacing out of China reveal that 1000s of factories are being shuttered, literally overnight and without warning. As these events unfold, once functional supply chains will break, adding to the financial stress already present in the world marketplace. Rebuilding these supply chains will be costly and time consuming.
Whether discussing textiles or technology, I anticipate that supply chain breaks will be the next big and costly without warning event to occur. And supply chains focused on low cost metrics may be the most vulnerable to disruption.
Now is the time to reevaluate your supply chains, with a renewed focus on simplicity, transparency and suppliers you can trust.
