Over the last few decades, companies have been optimizing their supply chains to lower costs, reduce inventory and maximize asset utilization. Supply chain globalization offered many benefits. It opened new markets and new sourcing options and lowered costs from suppliers. Globalization and offshore manufacturing became so common that by 2018, China accounted for around 28% of all global manufacturing output and most companies around the world had become dependent on offshore manufacturing.
As successful as globalization was for companies – increasing their revenues, margins and profitability – it also created a vulnerability that was hidden until a Black Swan event such as the global pandemic brought it to light. COVID-19 exposed some significant vulnerabilities in global supply chains that companies are still wrestling with over a year later.