Q: How are manufacturers adjusting their supply chains as the economy begins to rebound?
A: The rebound is certainly causing people to say, “I want to scale back up.” However, the scale-up is taking a different form, and, I think almost universally, pretty much across industries, the form that it’s taking is leaner on the one hand and regionalized on the other hand. From the mid-’90s until the latest crash, what “global supply chain” meant to many companies was manufacture in China and ship. That has hit its high watermark and is coming back.
It looks like there’s a shift to having a supply chain that serves the Americas; a supply chain that serves Europe, the Middle East, and Africa; and a supply chain that serves Asia Pacific. China’s still big, but increasingly we’re seeing investment happening in Mexico or Brazil to serve the U.S. market, investment happening in Turkey to serve EMEA, and diversification away from China and toward Vietnam, the Philippines.
Q: What has driven that shift?