The COVID-19 epidemic caused severe disruptions in the global supply chain. Over the past fifty years, efforts have been made worldwide to streamline supply chain lines, making them that much more efficient. Unfortunately, when a significant disruption occurred, such as the shutdowns and labor shortages associated with the pandemic, the global supply chain faltered until it was at the point of collapse.
Following Experiences with the Pandemic, Companies are Looking for Resolute Supply Chain Changes
COVID has caused significant volatility in the overall supply chain, regardless of industry. With technology, companies are hoping to leverage the power of Artificial Intelligence (A.I.) and robots to create a more predictable supply chain that can ebb and flow based on demand.
As COVID cannot bring down robots, higher levels of automation are being brought into the global supply chain network, coupled with research into the possibilities offered by machine learning and artificial intelligence. Taking a percentage of human labor and human error out of the supply chain will cause, it is hoped, heightened levels of efficiency to be created, reaching levels never seen before.
Aside from COVID, another driver of the recent supply chain turmoil has been the globalization of markets. No longer is it a case of local companies for local people. To remain in business, companies in the US need the capacity to deliver their products all over North America while branching out into overseas markets. Naturally, it costs more for a company in Dallas to send items to Tokyo than it does to Houston. Hence, increased costs were a catalyst for such companies to look for cheaper labor or to open overseas hubs close to areas where demand for their products is high and therefore remain profitable.
The Replacement of Human Labor with Automation Should Help Companies Stay in Business
Robots do not need to be paid, they don’t need medical insurance, and they don’t quit if they find better-paid jobs elsewhere. While the world is still decades away from the robotic utopias described in science fiction, automation is becoming a much more significant factor in the production process than people may anticipate. In Milton Keynes, a city in the UK, robots can be seen out and about rolling down the streets, delivering take-out.
The increase in levels of automation means that US manufacturing is being brought back to the United States. When production costs fall, companies worry less about the cost of shipping, and the effectiveness of machine learning and AI streamlines many logistical issues, bringing down the cost of shipping too. An effective and efficient supply chain costs less to operate and take advantage of than an inefficient one.
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