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Ideas in Motion

Reshoring Manufacturing

“What critical medical components are currently vulnerable to supply chain disruptions, but could be sourced domestically with some prior planning and coordination?”

Nassim Taleb, in his book, Black Swan defines a black swan event as a cataclysmic level event that defies prediction with any accuracy. The recent Covid-19 pandemic was one such event and revealed many weaknesses in the US global supply chain. It also reignited the debate in the US on the country's dependence on foreign sources for components and complex assemblies.

Congress is currently discussing what to do about weaknesses in the domestic supply chain and is considering mandating certain medical components and assemblies be reshored. The current administration invoked the Defense Production Act to incentivize and mandate companies to produce medical supplies and equipment that are in short supply. It is likely not the last government intervention in the supply chain.

It seems likely they will enact some long term legislation to address the shortages and vulnerabilities, but at this early stage, it is impossible to predict what any legislation might contain. Most of the focus has been on medical supplies and equipment that are wholly or partially manufactured abroad and were also in short supply at the beginning of the pandemic, such as ventilators and medical masks. More than 94% of Fortune 1000 companies are seeing corona virus-related disruptions to their supply chains. As the shortages cascade through the supply chain and inventories are depleted, it seems likely that the disruptions will accelerate inflicting short term pain on suppliers of all sizes.

No matter what Congress does, supply-chain managers should begin conducting risk assessments and identifying at-risk components and assemblies now rather than wait for a Congressional mandate. No one can predict the future or timing of a black swan event, but it makes sense to do some prior contingency planning to better prepare. The decision to reshore a component completely or to identify a suitable alternative supplier that can deliver on a flexible basis is not a simple undertaking and requires time and expertise. It is better to be pro-active now and begin the search before Congress takes action, or you will risk being caught up in a rush to the few remaining qualified vendors.

The first step is to identify critical components and then begin to identify qualified sources within the US.

With a global customer base of over 15,000 firms in the aerospace, defense, medical, and industrial sectors, Designatronics, Inc., has emerged as a leader in the design and sale of high-quality small power transmission components. Since it began operations in 1950, the company has expanded to three brands: (1) Stock Drive Products/Sterling Instrument (“SDP/SI”) ; (2) QTC Metric Gears (“QTC”); and (3Quality Bearings and Components) (“QBC”) .  Its 87,000 powertrain products include gears, belt, and chain drives, shafts, shaft accessories, bearings, couplings, universal joints, vibration mounts, miscellaneous components, hardware, gearheads and speed reducers, right-angle drives, brakes, and clutches.

Not limited to manufacturing stock mechanical components, SDP/SI designs, manufactures, and assembles custom subassemblies with world-class quality and reliability for all applications. As a precision gear and small mechanical component manufacturer SDP/SI excels in every process:  milling, turning, grinding, drilling, gear cutting, bevel gear cutting, and assembly.