Date: 2024-04-28 Page is: DBtxt003.php txt00022444
ECONOMIC ACTIVITY
SUPPLY CHAIN
WSJ Documentary ... Why Global Supply Chains May Never Be the Same
SUPPLY CHAIN
WSJ Documentary ... Why Global Supply Chains May Never Be the Same
Original article: https://www.youtube.com/watch?v=1KtTAb9Tl6E
Peter Burgess COMMENTARY
Early in my career ... around 1972 as I recall ... I was working on planning. budgeting and many aspects of profit performance improvement. One of our manufacturing units had chosen to relocate its consumer product line to South Korea in order to lower the production costs. For two years in a row, the company missed its delivery dates for the Christmas season in the United States, leaving the company with huge inventory of unsold and outdated merchandise. I had no trouble ending this outsourcing program in order to improve the unit's profit performance. This was perhaps a decade or more before outsourcing became commonplace and logistics management using digital technology was widely available.
The modern supply chain and the logistics industry is very impressive ... but maybe not as good as it needs to be. It has been able to reduce the cost of moving goods around the world by a substantial amount over the years since the early 1980s, but with some considerable lack of resiliency.
The Covid related supply chain disruptions have caused massive increases in the prices charged for moving goods to market and resulted in huge profits for shipping companies and higher prices for eventual consumers.
Supply chain bottlenecks are going to be a big excuse for price increases and endemic inflation that will be very difficult to control. Corporate consolidation means that companies win in this circumstance, and customers lose.
This is to be expected in a world where profits are the main metric and financialization is the dominant organizational method.
Peter Burgess
Mar 23, 2022
Wall Street Journal
3.57M subscribers ... 4,843,838 views
Every day, millions of sailors, truck drivers, longshoremen, warehouse workers and delivery drivers keep mountains of goods moving into stores and homes to meet consumers’ increasing expectations of convenience. But this complex movement of goods underpinning the global economy is far more vulnerable than many imagined. Photo illustration: Adele Morgan
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