Prioritization, e.g., online retailers prioritize supplies and deliveries of certain items (household and medical). Recent crises such as the Ebola outbreak in West Africa and the COVID-19 pandemic severely reduced supply chain capacities on international and local levels. Address the vulnerabilities by diversifying your suppliers or stockpiling essential materials. Those developments, combined with the U.S.-China trade war, have triggered a rise in economic nationalism. Tomorrow's model demands new priorities in optimization. Rationing, e.g., many retailers respond to shortages by rationing certain items. But were any lessons learned and new practices put into play? World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use. .chakra .wef-10kdnp0{margin-top:16px;margin-bottom:16px;line-height:1.388;}What is the World Economic Forum doing to manage emerging risks from COVID-19? The coronavirus (COVID-19) pandemic and its associated economic impacts have implications for agriculture, food, and rural America. The transition to remote working was one of the most immediate and pronounced effects of pandemic-era restrictions on mobility and access to workplaces. Other respondents told us that they had struggled to find suitable suppliers to support their localization or near-shoring plans. Vendors diversified into providing services to other industries that needed them during the earlier stages of the pandemic. Chemicals and commodity players made the smallest overall changes to their supply-chain footprints during the past year. World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use. Expecting weak demand, they cancelled orders of semiconductors, an item with a long lead time and with a secular increase in demand from other industries. Several years ago I spent a week at a new Chinese factory of a major American industrial-equipment company. And explore new manufacturing technologies that could increase flexibility and resilience. The Challenge of Rebuilding U.S. How COVID-19 is reshaping supply chains | McKinsey Thomas Y. Choi, Dale Rogers, and Bindiya Vakil, David Simchi-Levi, William Schmidt, and Yehua Wei, Clayton M. Christensen, Stephen P. Kaufman, and Willy C. Shih, From the Magazine (SeptemberOctober 2020), China has the second-largest economy in the world, Bringing Manufacturing Back to the U.S. Is Easier Said Than Done, Its Up to Manufacturers to Keep Their Suppliers Afloat, Coronavirus Is a Wake-Up Call for Supply Chain Management, Coronavirus Is Proving We Need More Resilient Supply Chains, From Superstorms to Factory Fires: Managing Unpredictable Supply-Chain Disruptions, Innovation Killers: How Financial Tools Destroy Your Capacity to Do New Things. Knut Alicke is a partner in McKinseys Stuttgart office, Xavier Azcue is a consultant in the New Jersey office, and Edward Barriball is a partner in the Washington, DC office. The supply chain has become a main protagonist everywhere, it has moved from playing a "behind the scenes" organizational role . Combining these hypotheses with the knowledge of where components are traditionally sourced will create a supplier-risk assessment, which can shape discussions with tier-one suppliers. Healthcare players stand out as resilience leaders.

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