Supply Chain
Article

The Changing Geopolitics of Manufacturing and Its Supply Chains

by
Forbes
May 12, 2022
Photo by carlos aranda on Unsplash
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Photo by carlos aranda on Unsplash

Summary

For twenty years, everyone, expert and novice, has been in agreement about manufacturing. A necessary evil. Takes time. Costly. Involves low-cost labor and huge factories that operate offshore. Major economies will never again lead manufacturing because globalization has arrived. What’s wrong with this picture?

The Changing Geopolitics of Manufacturing and Its Supply Chains

For twenty years, everyone, expert and novice, has been in agreement about manufacturing. A necessary evil. Takes time. Costly. Involves low-cost labor and huge factories that operate offshore. Major economies will never again lead manufacturing because globalization has arrived. What’s wrong with this picture?

The experts were wrong. Everything is changing back and forth. Globalization is challenged by the joint onslaught of a pandemic, geopolitics and technology. On Thursday, February 24, 2022, Russia invaded Ukraine, major production hubs for energy and wheat respectively, and as an immediate result, Europe’s energy supply is under threat. Chinese manufacturing powerhouses, such as the megacities of Shenzhen and Shanghai, have been under COVID-19 lockdown (see Lockdowns in China Block Truck Shipments and Close Factories). If China continues its Zero-COVID policy, this could happen many more times in the coming years. For these and other reasons, reshoring, even major reshoring that will be costly and take time to implement, is back on the table.

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