How the Pandemic is Driving More Supply Chains to Source Closer to Home

How the Pandemic is Driving More Supply Chains to Source Closer to Home

The COVID-19 pandemic has posed as a source of major disruption to global supply chains. In a McKinsey survey of senior supply chain executives, 75% said they faced production and distribution problems due to the pandemic.

These issues are driving more supply chains to source closer to home. Companies are exploring re-domesticating sourcing and near-shoring. Instead of purchasing supplies from a company in China, a U.S. organization may opt for a Canadian or American supplier instead.

Pandemic-induced Supply Chain Challenges 

COVID-19 has created many new challenges, including changes in demand, shortages of supplies and materials, and disruptions in production and distribution. As companies attempt to overcome these obstacles, they must also keep their employees safe and abide by government regulations. 

It will take time to adapt and change course, but those that address their newly exposed supply chain weaknesses are sure to outperform their counterparts. Companies that band-aid the problem and move forward without making any real changes are likely to feel similar shockwaves again in the future, whether from another illness or a geopolitical event.

Managing Pandemic-related Supply Chains Disruptions

The concerns outlined above are leading more companies to update their sourcing and distribution strategies for the long-term. As mentioned, identifying more localized suppliers mitigates some of the risks. Taking it a step further and finding multiple supply sources can make your company even more insusceptible.

Another way to regain control is by adding more manufacturing and distribution centers. Storing inventory closer to end-consumers removes some of the vulnerabilities and may prove more cost-effective.

The final thought I’ll leave you with is to break down the silos among business functions to find new ways of doing business. Collaboration between your logistics, strategy, manufacturing, and other teams will allow for more effective brainstorming of solutions.

Localize Your Supply Chain with Customodal

Are you considering a more localized approach to your supply chain? Customodal offers shipping, handling, and consulting services. We’re committed to innovation, service, and saving you money on transportation. Contact us for your international and domestic freight needs.