We are all anxious to see the world economy begin running again but need to be prepared to see significant shifts in the way that businesses of all sizes structure their supply chain network. As we mentioned above, every business has felt the impact of COVID-19 on its supply chain and has exposed underlying weaknesses. With that said, many companies are now questioning their current manufacturing agreements and are exploring alternatives within their borders and other neighboring countries.
Businesses will need a more localized and diversified supply chain (that has 100% transparency) to succeed in this new environment. Industries that have been slow to this type of adoption, like fashion, will need to recognize that this pandemic is a wake-up call that change is long overdue. For those that don’t explore alternatives and attempt to go back to business as usual, they will face hurdles along the way to stay afloat.
While near-shoring and diversifying may impact margins, business owners will find that near-shoring can help increase profitability through decreased costs in shipping, compliance, and lost time due to delayed communication. The main goal is to establish a reliable network that can produce high-quality products to create a steady cash flow and make adjustments for margin as the paranoia caused by the pandemic subsides.