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When will the Supply Chain return to normal?

When will the supply chain world return to “normal?” This is by far the number one question in my inbox these days as supply chain issues continue to make frontpage headlines, factories close down because of supply disruptions and President Biden personally gets involved in supply chain. Talk about supply chain making it out from the small grungy back-offices and onto the front stage with projector lights shining. With that type of spotlight, it is unfortunate that supply chain leaders have few answers to create immediate relief. There simply are no easy answers and no fast solutions. Demand fluctuations too big and uncertain: The fluctuations in demand are causing shifts that – using one of the most common phrases of the pandemic – are unprecedented. They are also pretty unpredictable. Unprecedented plus unpredictable makes it unattractive for investors. It is hard to assess what is a fluke, a fad or a trend. Why would anybody make investments in factories and equipment when the demand is so flighty? Manufacturing plants require years to plan and make operational. In most countries, permitting and construction of manufacturing plants can take years, and often close to a decade. But even in a more agile regulatory and construction environment, the lead time on equipment delivery and installation is often measured in years. When chips are in short supply, there is no easy fix, even if investors are willing to fund the $3 billion to $10 billion of a new wafer manufacturing facility. Construction of infrastructure is a decade-long project. US supply chain pros have warned for years that our infrastructure is too fragile. Operational professionals know that when the volume is increasing over a trend line, it is a bad sign when you max out on capacity during busy times. That’s exactly what happened in prior years when US ports were unable to handle holiday imports. With some optimism and lots of funding, we can get the port restrictions solved by 2031.
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