Note — Apr 05, 2020

Perhaps China’s Centralised Supply Chain Won’t Last Forever

Seen in → No.120

Source → interconnected.org/home/2020/04/01/supply_chains

In an exercise similar to the Premonitions piece above, Matt Webb considers the global centralized supply chain and how it might change in the near future. He believes that the line between the value of manufacturing far + shipping, and manufacturing locally is thinner than we think.

If I was in charge of industrial policy, I’d be betting against the hegemony of the centralised supply chain. That is: no more getting everything manufactured in China; instead, move to local manufacture and many more, smaller, networked factories. I’m talking over a couple of decades. […]

Shipping costs are increasing. Shipping is a carbon nightmare, and fuel rules are changing which will hike costs hugely. As we get more serious about climate change, that trajectory will continue. So how does that change the economics? And what other numbers are changing that I haven’t run across? […]

Let’s not even get into (gestures ineffectually) the current situation. It’s clear now that every country needs its own manufacturing base so that - when push comes to shove - it can be redirected to make what needs to be made.