SMART Supply Chain Revitalizing the Post-Pandemic Economy

Guest post by Glenn Marshall, Association for Manufacturing Excellence (AME)

SMART-supply-chain-revitalizing-the-post-pandemic-economy

While the United States remains a global leader in drug discovery, much of the manufacturing has moved offshore. China is known as the world’s factory for car parts, toys and electronics, but it also churns out much of the penicillin, antibiotics and pain medicines used across the globe, as well as surgical masks and medical devices.

Supporters of reducing reliance on China have used the coronavirus epidemic to highlight what they say is a longstanding vulnerability that could leave Americans dangerously short of medicines and medical supplies in the event of a war, trade conflict, or pandemic. Many believe we need to bring those manufacturing jobs back home so that we can protect the public health and the economic and national security of the country.

Now with the pandemic crisis, there is a wake-up call for the US to launch the re-purposing of its industrial base and skilled workforce to revitalize the economy and to return to the same manufacturing dominance we had achieved at the end of World War II. America needs a Marshall Plan-style initiative to resuscitate and restore the economy and society much like it did following WW II to help Europe revive their economy.

SMART Supply Chains Renaissance

For decades, companies have been shifting production supply chains offshore impacting manufacturing jobs and negatively affecting the environment resulting in higher carbon emissions and pollution from China and developing countries requiring long-distance transport.

As a result, a trend known as reshoring (or nearshoring) is gaining acceptance. Companies are undergoing a supply chain renaissance in terms of implementing new operational strategies and technologies in response to the demands of the twenty-first century to avoid future supply chain disruptions and global competition takeovers.

“As supply chain professionals, we will play a significant role in this nearshoring initiative. We will need to sharpen our skills in logistics network design, manufacturing design, and we will need competencies in calculating total landed cost in order to solidify the hypothesis that the global supply chain falls short from a competitive point of view,” asserts Robert Martichenko LeanCor Supply Chain Group.

“It’s safe to say that a ‘new normal’ will be an outcome of the crisis, which will include how we think, plan, execute, and improve our supply chains,” says Martichenko. “To prepare for that new normal, we must assess our supply chain risk relative to sensing, receiving, and fulfilling a customer order in the event of planned and/or unplanned change in demand or other supply chain dynamics. This is about driving visibility, capability, and resilience.”

In the past, companies were making sourcing decisions based solely on price, oftentimes resulting in a 20% to 30% miscalculation of actual offshoring costs. Harry Moser is Founder and CEO of the Reshoring Initiative and developer of the Total Cost of Ownership (TCO) Estimator. This free online tool helps companies account for all relevant factors to determine the true total cost of ownership — overhead, balance sheet, risks, corporate strategy, and other external and internal business considerations.

TCO enables companies to identify products for which reshoring will provide major cost reductions and environmental benefits while maximizing shareholder returns. Now it’s time for business leaders to work together to eliminate the collective trade deficits with China and other developing countries to strengthen advanced manufacturing and bring back millions of jobs using SMART Manufacturing and Workforce principles and best practices to remain competitive on globe markets.

SMART Manufacturing and Workforce

The Industrial and Digital Revolution 4.0 requires the information-intensive transformation of manufacturing (and related industries) in a connected environment of data, people, processes, services, systems, and IoT-enabled industrial assets to realize smart industry and ecosystems of industrial innovation and collaboration.

SMART manufacturing employs computer-integrated manufacturing, high levels of adaptability and rapid design changes, digital information technology, and a more flexible technical workforce while consuming fewer natural resources, reducing pollution and waste, recycle and reuse materials, and moderate emissions in their processes and products while significantly reducing operating costs. Industrial connectivity devices like smart phones and tablets are enabling fast communication with both workers and machines producing changes in production levels based on demand, optimization of the supply chain, and efficient production.

As the workforce undergoes generational changes precipitated by retiring baby boomers, factories are evolving from the pre-automation plants of the past to the smart factories of the future. Workers in smart factories require digital fluency, technological savviness, and data analytics know-how — skills that previous generations just didn’t need, and future generations may not be fully prepared.

To address these challenges, President Trump has asked companies to commit to expanding programs that educate, train, and re-skill American workers of all ages by signing the Pledge to America’s Workers. The White House workforce development program focuses on vocational job training and apprenticeships as an alternative to the almost-default setting of a four-year college degree.

Industries can invest in multi-generational employee retention and retraining programs to strengthen and elevate in-house teams. In addition, manufacturing companies can deepen the prospective employee talent pool by working with educational institutions to ensure younger generations are prepared for jobs that require STEM proficiency.

Moving Forward

Global business leaders and practitioners are coming together to deal with the latest supply chain disruptions and manufacturing challenges in the 4.0 industrial and digital revolution.

Register now for the 36th Annual AME International Conference  — the world’s largest lean conference, October 26-30, 2020 in Toronto, Ontario, Canada to cope with global supply chain disruptions and the next generation of advanced manufacturing challenges.  

Glenn Marshall, Newport News Shipbuilding Career Pathways (retired), is on the Association for Manufacturing Excellence (AME) Management Team initiative for leading a “Manufacturing Renaissance” and a member of the Job Creators Network. For more information: marsh8279@aol.com.

Posted by LeanCor Supply Chain Group

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We Teach. We Consult. We Do. LeanCor is a strategic supply chain partner that provides third party logistics, supply chain consulting, and corporate training programs. These three, integrated solutions – LeanCor Logistics, LeanCor Consulting, and LeanCor Training and Education – specialize in lean principles to help businesses better serve their customers by eliminating waste, decreasing costs, and building cultures of continuous improvement.

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