Supply chains are in the global spotlight like
never before. With inflation and economic
uncertainty following from pandemic shutdowns,
managing supply chain disruption has
become a normal part of doing business.
At the same time, companies are recognizing
that supply chain operations are a key part of
the drive to reduce carbon emissions. As they
adapt their supply chains in response, companies
are also having to manage a massive talent
shortage in manufacturing.
With all these challenges racking up, it’s not
surprising supply chains are top of mind for manufacturing
executives. The National Association of
Manufacturers’ new survey on the biggest challenges
facing manufacturers shows that 78% of
manufacturing leaders indicate supply chain disruption
as a primary business challenge. What’s
more, despite a generally positive outlook for their
businesses overall, only 10%of these leaders think
current supply chain disruptions will improve by
the end of this year.
Reframing the
supply chain footprint
This persistent disruption is driving companies to
rethink some of their most fundamental assumptions
about global manufacturing. Resilience,
flexibility, and sustainability are now the watchwords
for supply chain managers. As such, the
focus is switching away from low-cost offshoring
and just-in-time manufacturing towards greater
onshoring and nearshoring (“reshoring”), especially
in the United States.
The striking findings of a recent Accenture
survey bear this out. It found that 94% of
North American companies are now planning to
invest directly in onshoring or nearshoring. And
more than half of all supply chain and manufacturing
executives think building manufacturing
capacity closer to home is essential for their
companies’ survival.
Specifically, a large majority (85%) want
their factories and material sources to be in
the same hemisphere. Nearly as many (78%)
want factories within four time-zones of the
customer. And more than half (52%) want them
less than 1,000 miles away.
This is a very different way of thinking about
supply chains than we’ve been used to. In fact, only
a tiny minority—1%—of companies believe they
can continue to grow revenues and profits within
their existing manufacturing footprint.
A different kind of supply chain
With findings like these, wide-scale change in
supply chains is inevitable. But reshoring is only
part of the equation. With the focus on greater
productivity and efficiency as well as flexibility
and resilience, many companies are looking to
make their newly reshored factories far more
digital and automated.
In fact, more than half of the companies
Accenture surveyed said they’re combining
large-scale digital transformation with their
onshoring and nearshoring initiatives. This also
has implications for workforce skill requirements.
Automation and robotics need new kinds of technicians
to support them, as well as data scientists
and analysts to make use of all that valuable new
sensor and supply chain data.
Such skills are already in high demand. In fact,
two in five respondents to Accenture’s survey said
automation and robotics technicians are the hardest
roles to fill. And three-quarters of companies
in the NAM survey said attracting and retaining
a quality workforce was a key business challenge.
The implication? First, companies need to shift
automation up a gear to address persistent manufacturing
talent shortages. Second, they’ll need to
rethink their approach to talent acquisition and
retention to ensure they have the skills needed.
For most, that will include a significant program
of upskilling the existing workforce in key digital,
automation, and data capabilities.
The next phase of supply chain
Manufacturers that can manage this transition
quickly and smoothly are poised to transform
their supply chain agility and resilience as well
as their sustainability and competitive advantage.
This is especially important as they continue
the shift towards direct-to-consumer and
e-commerce sales models.
For example, reducing freight emissions
through reshoring can be a key weapon in reducing
a company’s carbon footprint. And the greater
flexibility provided by strategically siting highly
automated facilities will be crucial in meeting
growing demand for more personalized products,
services, and experiences that can be tracked in
real time and delivered exactly when and where
they’re needed.
To meet these new requirements and expectations,
supply chains need to be transformed
and rearchitected. Ultimately, it’s about putting
aside the traditional view of the supply chain as
a cost center. It now needs to be seen as a vital
source of future growth, profit, and competitive
advantage—as well as a enabler of more customercentered
and sustainable operations.
