The Effects of Deglobalization on Manufacturers | Manufacturing in the Now | Episode 3

Michael Intravartolo, Marketing Manager at Solutions, back for Manufacturing in the Now episode 3. Today I’m talking the effects of deglobalization on Manufacturers.

Lately I’ve read a few articles on the topic of deglobalization with regards to the world’s economy, and it got me thinking about whether or not this would affect manufacturers and if so how?

Atlanta Fed president Raphael Bostic mentioned in a speech recently that because of the sustained shortages of crucial industrial materials that businesses are being forced to shift from an emphasis on “just-in-time” to “just-in-case.”

With this new emphasis does that mean that manufacturers will be OK with sacrificing efficiency for reliability?

I think in the near term the answer is yes. The pandemic made aware of the need to be able to change gears quickly and now I believe that Manufacturers and most businesses of the 21st century have the ability and software to quickly adopt to what is needed. So, if being more reliable than efficient proves better on their cost benefit analysis charts the switch will be made for however long it’s needed.

Larry Fink, CEO of BlackRock recently said that he remains a long-term believer in the benefits of globalization and the power of global capital markets, but the Russian invasion of Ukraine has put an end to the globalization we have experienced over the last three decades.

This is an interesting take and one I agree with for the near term. By near-term I mean that I think within a half-decade globalization as we knew it will return. We’re human and we tend to forget things quickly if profits can be increased. Yes, it’s going to be hard to work with Russia in the future but Russia may change its views with all the sanctions that have been imposed on them recently. We just don’t know enough to say that globalization as we knew it is dead.

So, overall is deglobalization a good thing or a bad thing for manufacturers? I think it can be both. I know, not a straight answer but it really is going to be different for each business and each consumer of the product. For example, there will be less supply chain issues but prices will increase. Some consumers may be ok with that while others won’t.
No matter if you agree or disagree I think we can all agree on that the market is undefeated and will figure out the best foot forward.

Let me know your thoughts in the comments below.

#manufacturing #business #erp