Who holds the reins in the global supply chain industry?
Supply chain managers are facing a series of challenges that seem never-ending. From a collapsed bridge blocking the Port of Baltimore to earthquakes in Taiwan disrupting microchip production, the world’s manufacturing sector is constantly under pressure. Geopolitical conflicts, such as missile attacks in the Red Sea and ongoing tensions between the US and China, further complicate the situation. Amidst all this, the lessons learned from the COVID-19 pandemic emphasize the importance of being prepared for any eventuality. The mantra now is to prioritize safety over risk.
To ensure supply chain resilience, companies are advised to shift from a “just in time” to a “just in case” approach. This involves building larger inventories of raw materials and finished products. However, this strategy comes with its own set of challenges and costs. Rising interest rates increase the cost of short-term loans, while a shortage of warehouse space leads to higher storage expenses. According to JPMorgan Chase, companies in the S&P 1500 index had over $600 billion tied up in working capital by the end of 2022, a significant increase from pre-pandemic levels.
2024-04-11 09:42:14
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