The past several years have been rough on supply chains — both individually and as a profession. With the pandemic’s shock to supply, the tragic war in Ukraine, a global overreliance on China and not to mention inflation, there have been seemingly endless sources of stress. But this week, supply chain professionals around the world have cause to breathe a much-needed sigh of relief, as experts state that the downward trend seems to have reversed course.
It turns out that our recent heightened focus on stability and resilience has worked: Matt Egan at CNN Business writes, “The traffic jam of vessels backed up ports, once a symbol of the supply chain crisis, has all but disappeared, [and] about 92% of goods at grocery and drug stores are now in stock.” That number is even better than the U.S. average pre-Covid. Plus, shipping costs are down by about 90%, according to a new report from the White House.
Last year’s CHIPS and Science Act, for example, was designed to “strengthen American manufacturing, supply chains, and national security” by investing in science, technology, research and workforce development. “As a result, manufacturing in the U.S. is growing,” Nate DiCamillo writes for Quartz. “From June 2022 to April 2023, construction spending in the manufacturing industry jumped from $90 billion to $189 billion [and] construction employment in remains at record levels.” Manufacturing spending is even beating the rate of inflation.
Bringing jobs back home
A key focus of the White House’s initiative has been reshoring to build in more resilience and limit opportunities for disruption in case of another shock. In fact, a survey for Forbes finds that 55% of American CEOs are planning to reshore their manufacturing operations, with 95% saying they'll do so this year. That finding is in line with those of the KPMG Supply Chain Stability Index, created in association with ASCM. The newly released quarterly report finds that “the overall market continues to resolve toward a prepandemic norm.”
Furthermore, specific job openings are evolving in kind: Transportation labor needs are shifting from seaports to land ports, causing the need for more truck drivers and fewer incoming customs and port laborers.
Another major insight involves sourcing: As many supply chain organizations seek to boost resilience by diversifying their networks, reliance on China has dropped, allowing Mexico and Canada to fill the gap. “Mexico overtook China by 15% in U.S. import volume during the first quarter of 2023, while Canada overtook it by 5%. This shift of trade volume to U.S. neighboring countries is the first occurrence in over 20 years,” the report explains.
The Supply Chain Stability Index centers on four key factors: the overall volume of goods shipped, the speed at which goods reach their destination, the cost of transporting goods from the source to the ultimate destination, and the variability of each of these aspects. Using this data, the tool then illuminates stresses and pinpoints where they originate, helping you predict fragility with plenty of time to flex and adapt. Delve into the rest of the findings and begin stabilizing your supply chain today.
