Since the onset of the COVID-19 pandemic, the supply chain has encountered productivity issues, labor shortages, raw material shortages, and timing delays that have impacted nearly every industry. In addition to restaurants, department stores, and other consumer-facing businesses, manufacturing companies have been hit especially hard.
The question remains of whether the international business community will be able to regain control of the supply chain and maximize productivity once again.
Current Supply Chain Issues
In addition to the pandemic, weather-related and other unforeseen events—like the March 2021 Suez canal blockage—have exacerbated supply chain issues. This combined crisis means the supply chain now faces rising labor and transportation costs, shipment delays, increased turnaround time, more compliance issues related to COVID-19, material shortages, and increased demand. In addition to the high costs of shipping, containers are being trapped on ships and at ports for weeks or months, leaving no certainty as to when customers will actually receive what they ordered.
With the spread of COVID-19 in 2020, slowed economic activity lowered global demand and reduced overall manufacturing output. But as lockdowns have lifted, demand has skyrocketed while supply chains remain backlogged. In the United States, the shortage of semiconductors has created delays in automotive production. Industrial manufacturers and distributors still struggle to staff enough workers in factories and warehouses.
How to Combat Current Supply Chain Issues
Businesses can implement certain strategies to offset supply chain issues. One such solution is reshoring, the practice of relocating operations from overseas back to their country of origin.
Offshore production means that U.S. companies arrange to do business in foreign countries. The COVID-19 pandemic has exposed the risks of depending too much on offshore operations. Reshoring can circumvent shipping, transportation, labor, and other issues by keeping the supply chain domestic. It also stimulates local economies and helps Americans return to work.
Finding alternate sources for materials is another way to avoid current and future supply chain issues. Having multiple options to create the same products makes the manufacturing process more flexible—when access to one material is disrupted, the manufacturer can turn to its other options without losing business. The Rodon Group, for example, specializes in sourcing plastic injection molding in the United States rather than relying on various international sources.
Supply Chain Advantages of American Manufacturing
There are many advantages of keeping most or all stages of the supply chain on American soil. By centralizing supply on American production, companies can decrease foreign dependence and increase future supply certainty. The Rodon Group President Michael Araten addresses other major concerns below.
Q: How does American manufacturing lower delivery costs?
A: As international shipping costs rise, the cost savings that companies used to enjoy with offshoring have reduced significantly. With domestic manufacturing, companies won’t need to ship large containers from overseas, eliminating reliance on fluctuations of global transportation fees.
Q: What about lead times?
A: Coordinating offshore production requires working across vastly different time zones. Communications can get delayed or misconstrued, which adds even more time to overall production. Operating domestically offers shorter lead times and more efficient communication.
Q: Will the quality of American-made products be the same?
A: Yes. In fact, quality may be superior because your managers can better oversee production and quality control. American companies are also held to higher quality and safety standards by the government, so you can protect both your employees and the integrity of your products.
The Rodon Group: Reshoring Solutions
Reshoring and finding alternate sources for raw materials are key ways to fight global supply chain issues caused by the COVID-19 pandemic, weather disasters, and other unforeseeable events.
Based in Hatfield, Pa., The Rodon Group has been supplying quality plastic parts for American companies since 1956. As explained in our NBC Nightly News feature, current supply chain issues have highlighted the need for reliable American suppliers.