September 23, 2021

Volume XI, Number 266

Advertisement

September 22, 2021

Subscribe to Latest Legal News and Analysis

September 21, 2021

Subscribe to Latest Legal News and Analysis

September 20, 2021

Subscribe to Latest Legal News and Analysis
Advertisement

Supply Chain Issues Persist for Manufacturers in Covid World

The Wall Street Journal published a story a few days ago that described some of the challenges that exist in the manufacturing supply chain.

“U.S. manufacturers aced the shutdown of their factories and warehouses last spring in response to Covid-19. They’re botching the recovery.

“After carrying out an orderly retreat from assembly lines as the pandemic arrived in the U.S., many manufacturers pulled out the playbook they followed in past recessions, cutting costs and preserving cash. That left them unprepared for the sharp rebound in consumer demand that began just weeks later and never let up.”

Anyone who has tried to order an appliance or other consumer products can attest to the long delays in receiving products.  The authors describe it as a “bullwhip effect.”

As we have discussed in previous blog posts, the supply chain was certainly stressed in 2020 as the demand for some manufacturing clients skyrocketed and, frankly, their supply chains could not keep up. Manufacturers are looking closely at weaknesses in their supply chain all around the world in an effort to find the right balance between supply and demand.

However, I think the stories about manufacturers “cutting costs” and “preserving cash” are a bit overdone. In March/April of 2020, manufacturers were not even sure if they could operate and many were projecting significant losses in revenue. The demand put stress on manufacturers and their supply chains, and I think the more significant lesson learned is that manufacturers need to revisit their supply chain relationships and contracts moving forward.

 

Copyright © 2021 Robinson & Cole LLP. All rights reserved.National Law Review, Volume XI, Number 56
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

Jeffrey White Corporate Law Attorney Robinson Cole Hartford
Partner

Jeff White provides counseling and dispute resolution advice for manufacturers and distributors. He is chair of the firm's Manufacturing Industry Team and regularly represents clients throughout the United States and globally. Jeff is significantly involved with industry issues through his participation with groups such as the National Association of Manufacturers (NAM) and the American Bar Association's International Expansion and Cross-Border Transactions Subcommittee. In 2013, he created and launched the widely read Manufacturing Law Blog, which was one of...

860-275-8252
Advertisement
Advertisement
Advertisement