Israel was attacked by Hamas, and the world has another war in another region of the world. Since the global supply chain is interconnected, in addition to the devastation in the region, supply chain impacts will emerge.
Inflation and disruption are increasing again. Wholesale inflation as measured by the producer price index increased by .5% since last month which was more than expected. Core inflation (excluding food and energy) went up by .3% which was also more than expected.
Global supply chains are on the move. Executives have been hit with the harsh reality that the risk (supply chain, geopolitical, cyber, IP, etc.) is far higher than they realized when they outsourced with an eye to cost.
There has been a run of strikes or threats of strikes lately with the latest UAW strike impacting the Big 3 automobile manufacturers. If it lasts longer than a few days, there will undoubtedly be a huge impact on the end-to-end supply chain as well as the economy.
Manufacturing is making a resurgence in the U.S. and other countries around the world. According to the U.S. Bureau of Labor Statistics, there is a shortage of 550,000 stable manufacturing jobs to be filled in manufacturing businesses nationwide.
Manufacturing is in a state of flux. After seven straight months of contraction in manufacturing, it is not surprising manufacturers are thinking about cutting back. On the other hand, in many industries, manufacturers continue to have a robust backlog and are growing faster than their capacity.
Making the appropriate business decisions will make or break success. Executives get paid the big bucks to make these decisions. Unfortunately, one poor decision can outweigh thousands of good ones rapidly. SIOP (Sales Inventory Operations Planning), also known as S&OP, is a tool that will optimize these tradeoffs for effective decision making.
Manufacturing is on a downward trend after eight months of PMI (purchasing manager's index) below 50. It dropped to 46 in June. China's manufacturing also shrank for a third month in a row to a PMI of 49. Yet manufacturers backlogs remain relatively robust in many industries, leading executives perplexed on what to do about capacity shortfalls.
Globalization is not working. Geopolitics abound. For example, the war in Russia and Ukraine ravages on. There are concerns around the nuclear power plant in Ukraine, occupied by Russia. And that is aside from the impact on oil, food, commodities and much more. China continues to threaten Taiwan and has already changed Hong Kong. It is no longer the same for business. There are countless risks throughout the world.
Snarled supply chains throughout 2021 had industry hoping 2022 would be smoother, yet analysts said it would last into 2023 or longer. Lisa Anderson offers her insights about how 2023 is looking.
