Victor Restis Highlights Diversification in Manufacturing & Distribution Channels
COVID-19 disrupted every industry throughout the world. The one industry that people were most worried about – even if they didn’t realize – was the global supply chain. Victor Restis, president of Enterprises Shipping & Trade S.A., pointed out that empty supermarket shelves and shortages of essential supplies like toilet paper and hand sanitizer were merely the visible impacts to consumers of the global supply chain. When you looked at the industry in its entirety, you would find halts in production and shortages from raw materials to finished goods. These disruptions across China, Europe, the Americas, and other countries proved that the COVID-19 virus was an event of unprecedented scale and severity for supply chains.
After the initial fallout from global supply chain disruptions, several questions surfaced. Among them was how to strengthen supply chains to mitigate future events of similar magnitude.
The world caught a glimpse of part of the solution when leading companies shifted production focus away from its primary product lines to producing much needed medical equipment. In the United States, legendary carmakers General Motors and Ford switched from building cars and trucks to breathing machines. Restis pointed out that GM and Ford were soon joined by other companies, including Tesla and Virgin Orbit. The combined effort was reportedly enough to satisfy a national shortage with enough surplus to send to other, hard-hit nations.
Similar to ventilators, production ramp-up for N95 respirators (masks) hit an all-time high with US-based companies Honeywell and 3M leading the effort. Mask production was increased to surpass 30 percent over one year, on top of the already 1.1 billion produced annually. 400M of those being made in the U.S.
The road to recovery and solving future supply chain disruptions will need to go much further than respirators and masks. Government leaders are already studying the impact of COVID-19 on its ability to maintain supplies – both medical and other – in the face of future pandemics. Globalization is now facing extra scrutiny, and nations were considering a virtual closing of its borders when it comes to global trade. American President, Donald Trump, had already pledged efforts to bring back jobs – especially in manufacturing – from China and Mexico and other nations are now considering similar moves where it makes sense.
Restis noted that leaders around the world are likely re-thinking global trade strategies and looking for ways to bring some aspects of manufacturing within their borders. This not only helps protect their citizens during similar events but also provides a more influential position within the international community. Shoring up manufacturing and distribution will likely surge local economies and provide a safety net that can be activated much quicker in protecting its citizens. The alternative is hoping production in other countries survives and that the global supply chain network doesn’t fault.
The good news is that the global supply chain held up steady in the face of the pandemic. However, it shed light on potential problems that will be examined and strengthened. Perhaps a more diversified manufacturing and distribution of supplies will be put forth. In the meantime, many countries have already invested in redundancies to absorb future risks.