Rana Foroohar, Global Business Columnist for the FT wrote an excellent column on the changes in traditional economics thinking. Using the supply chain as an example, her rationale is that countries, companies and individuals will reset to a new normal state (this is mainstream economics thinking).
In supply chain management, companies have traditionally gone to places that provide the cheapest and most efficient supply of goods, often omitting black swan events like the crisis we are currently enduring. For 40-50 years, she states that the focus and attention has been placed on cheap labor and cheap goods – efficiency, maximum profit margins etc. This is the ‘efficiency’ model. It is her belief, and it is hard to disagree, that we will move to a resiliency model. A model that will be able to hold up more effectively in times of crisis.
In recent articles, we have discussed the gaps laid bare in this supply chain and so it is worth highlighting this well-written piece by Rana. Her article reinforces our belief that important changes are in our future. Larger countries will need to think differently and be better prepared for future crisises. Some companies (and countries) will be in a better place to achieve this. Others will need to pivot.
If you want to hear more, register for our supply chain discussion on May 21st with Jay Meyers, CEO of Next Gen Advanced Manufacturing Super-cluster and Former President & CEO, Canadian Manufacturers and Exporters.