A 11 Nov 2022 article at the World Economic Forum web site that
describes how the COVID-19 crises revealed that modern supply chains
are a house of cards, collapsing the moment they come under any kind of
sustained pressure.
Quote:
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Originally Posted by Christian Lanng, Chief Executive Officer, Chairman and Co-Founder, Tradeshift
The crunch on container capacity could last until Q4 2022, according to maritime research firm Drewry. Shortages of key components, including semiconductors, could take even longer to resolve. Is the answer to carry on pushing orders through in the hope that these problems resolve themselves? Two years into the pandemic, there are strong signs global businesses are starting to realize that supply chains actually need root-and-branch reform.
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Quote:
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Originally Posted by Christian Lanng, Chief Executive Officer, Chairman and Co-Founder, Tradeshift
Butterfly effect
It is tempting to blame current supply chain issues on a system that is simply rebooting, meaning these problems will be painful but temporary. Such a narrow view of current challenges ignores deep structural issues in supply chains, however. These issues will cause regular breakdowns in the future if left unchecked.
Lean manufacturing processes have reduced competition to a point where factory closures in one Asian country can unleash global chaos. The antiquated systems that govern relationships across supply chains have led to a butterfly effect, where a lack of agility causes any crisis to spiral into catastrophe. Low connectivity has left businesses blind to potential issues and incapable of reacting in time to avoid a crisis rippling through the value chain.
Creating a global trading system capable of withstanding future shocks will require a coordinated effort from both governments and the private sector. This must involve a mixture of trade reform and investment in industries that have been hollowed out by fragile supply chain models. Such changes will take time and will require significant capital expenditure - but they will also require vision.
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Article here :-
https://www.weforum.org/agenda/2021/...omic-recovery/