Or will the West continue to risk exposure?
The massive disruption caused by Covid-19 has revealed the fragility of the global supply chain. With proper leadership, however, many companies are adjusting (or will adjust) to the changes made necessary by this pandemic.
Predictably, this unprecedented disruption has prompted calls for nations to onshore their manufacturing. It’s an argument that pops up periodically. And on the surface, it does make sense. Why leave a domestic market so vulnerable to what’s going on in the rest of the world? Why not build all we need here?
But here’s some straight talk: It is simply not realistic to think we can bring all manufacturing – including printed circuit boards – back to Western shores.
Would our companies – or our local, state and federal governments – be willing and able to invest the staggering amounts of money needed in the necessary technology? Would they also be able to help supply the skilled labor force required?
Crucially, would Western consumers be willing to pay the significantly higher prices necessary to make everything in their local markets?
I just don’t see that happening.
The American PCB industry, for one, simply would not be price-competitive. Besides, during this global pandemic, domestic manufacturing lead times have been pushed out even more than those offshore, worsening the situation.
The truth is, while the coronavirus began in China, manufacturing there is already starting to get back on its feet. And it will be back to capacity faster than the rest of the world. That’s because the Chinese have invested heavily in automation for years, and they already have a specifically trained (and less expensive) labor force.
The coronavirus has exposed the weak link in our global system of trade, affecting with stunning speed the entire world’s ability to produce goods and services. It has literally leveled to the ground the entire global supply chain. Production, while not halted, has been seriously slowed, both for goods produced offshore and those manufactured domestically.
And the hard truth is, even after we get through the current situation, there will almost certainly be another. That begs the question: What steps will your company take to become “pandemic resistant?”
I can see many changes ahead to deal with this invisible and deadly enemy becoming part of a “new normal” in PCB manufacturing. These changes could include:
Not far from where I live, one of the largest EMS companies in the world is building a sprawling new headquarters. With fewer employees potentially required to gather in one location, do companies really need to spend all that money for an extravagant building? Who will be occupying those offices and conference rooms – and using all those nice amenities – during the next pandemic?
Would factory visits by customers or salespeople be curtailed or controlled, with a doctor’s note required or visitors’ temperatures being taken prior to entry to a facility? Will the receptionist be seated behind glass, not as a protection against armed entry but lethal droplets?
What about the need for international travel? In the PCB world, large OEM and EMS companies spend hundreds of thousands of dollars a year to send key employees overseas to inspect PCB manufacturing facilities. These trips may help with building business relationships and ensuring quality of product. However, do corporations continue to risk the health of their employees while they travel? And what about what they might bring back to their offices?
More firms may consider hiring offshore supply chain management firms, which are on the ground near the PCB manufacturers and can watch over their orders 24/7, without exposing any employees to health hazards.
After considering the changes that may be coming to our industry in response to Covid-19, I had an idea about a new component within ISO: a registry of certified, pandemic-resistant facilities.
How long will it be before we hear supply-chain managers asking, “Does your manufacturing operation have CDC or WHO approval?” It’s an idea that most of us would have dismissed just a few months ago. But I’ll bet it’s coming.
So, what are you doing to make your supply chain or company resistant to a pandemic?