Supply Chain and Logistics

October is National Disability Employment Awareness Month and, amid the manufacturing skills gap—there aren’t enough skilled workers in the country—it’s a great opportunity to call attention to one of the most underused talent pools in the country—people with disabilities.

It’s no secret that labor shortages and high turnover rates continue to plague the manufacturing sector, with about 40 percent of employees calling it quits yearly, according to the Bureau of Labor Statistics—44 percent in 2020, 39 percent in 2021, and 40 percent in 2022. Turnover is a drag on productivity and the bottom line, with recruiting, onboarding, and retraining costing from $3,500 to $10,000 per employee.

According to the 2023 Career Advancement in Manufacturing Report, 82 percent of manufacturing companies are experiencing a labor shortage. The numbers don’t lie. Earlier this year, the U.S. Chamber of Commerce reported 693,000 open manufacturing jobs. Even more concerning: A study by Deloitte and the Manufacturing Institute found that the manufacturing “skills gap” could result in 2.1 million unfilled jobs, costing businesses a trillion dollars by 2030.

Diversifying Talent Pipelines to Ease the Manufacturing Skills Gap

Deloitte’s solution? Turn to underrepresented communities.

A landmark Accenture study found that companies that actively include employees with disabilities achieve 28 percent higher revenue, double the net income, and 30 percent greater profit margins than those that don’t.

“It is deeply concerning that at a time when jobs are in such high demand nationwide, the number of vacant entry-level manufacturing positions continues to grow,” said Paul Wellener, Deloitte vice chairman and U.S. industrial products and construction leader. “To attract a new generation of workers, the industry should work together to change the perception of work in manufacturing and expand and diversify its talent pipeline.”

Finding Hidden Labor Pools

When it comes to diversifying its talent pool, InterMotive Vehicle Controls in Auburn, California, is ahead of the game. Co-founders Linda and Greg Schafer were searching for an outsourcing partner to manufacture some of the company’s PCBAs in 2008 when they discovered PRIDE Industries, a contract electronics manufacturer with a mission to create employment for people with disabilities.

“The company’s capabilities blew me away,” Greg said. “The people, the processes, and the technology are state of the art. But what sets the company apart are the people—I’d never seen a manufacturing floor where employees were so happy to be there.”

Fast forward 15 years, and PRIDE Industries now manufactures 46 parts for InterMotive—24 cable assemblies and 18 mid to high-volume PCBAs. Services provided include functional testing of PCBAs, using custom test fixtures designed and built by PRIDE Industries engineers. Testing time has been reduced from about six seconds to 2.5 seconds, and returned boards have all but disappeared.

Retention Benefits

“We have directly hired people with disabilities and outsourced to PRIDE Industries’ teams for going on two decades now,” Linda said. “When you take someone with an intellectual disability or a physical disability, and assess their skills and interests, give them the training and support they need, you’ll be amazed at what they can do and how much they can contribute.”

Hiring people with disabilities helps InterMotive bridge the manufacturing skills gap and increase retention. “I have employees with disabilities who started after high school and are now married and buying homes,” Greg said. “They love their jobs, show up on time every day, and are proud of their work. They really enhance our workforce.”

But the story doesn’t end there. Coincidentally, one of InterMotive’s flagship products is a wheelchair interlock—a mechanism that immobilizes wheelchair-accessible vehicles when the wheelchair ramp deploys. “Some of our employees come to work in vehicles with our products on board,” Linda said, “products they may have helped build.” InterMotive is the largest manufacturer of wheelchair interlocks in North America.

A Vast Labor Pool

More than 10 percent of people aged 16–64 in the United States—22 million people—have a disability. The employment ratio for this population—the percentage who are employed—hovers around 30 percent, while the rate for persons without a disability in the same age group is about 75 percent.

But that’s changing, fast. In recent years, the employment-to-population ratio for people with disabilities has risen to record highs, reaching more than 37 percent, according to the monthly National Trends in Disability Employment (nTIDE) report, published by the Kessler Foundation and the University of New Hampshire.

Still, that leaves about 14 million people available for work.

A Help Wanted sign affixed to a photo of the factory floor of an electronics manufacturing company
Amid an ongoing manufacturing labor shortage, smart companies are diversifying labor pools and discovering the gifts of people with disabilities.

Proven Benefits

The business benefits of a workforce that includes people with disabilities are proven, if not well known. A landmark Accenture study found that companies that actively include employees with disabilities achieve 28 percent higher revenue, double the net income, and 30 percent greater profit margins than those that don’t.

Research published by the National Institutes of Health found that the economic benefits of hiring people with disabilities include: lower employee turnover, greater long-term retention; increased reliability, punctuality, and productivity; and greater customer loyalty and satisfaction.

Low Risk, High Reward

One of the reasons some employers cite for not including people with disabilities is the added cost of reasonable accommodations that the Americans with Disabilities Act (ADA) requires. That myth is long busted. A survey of 3,528 employers by the Job Accommodation Network (JAN) found that 49.4 percent reported that accommodating employees with disabilities “cost absolutely nothing.” The other employers incurred an average one-time cost of just $300 per employee with a disability.

Meanwhile, the Society for Human Resources Management pegs the average cost of replacing an hourly worker at $1,500 each—far more than the cost of accommodating an employee with disabilities.

Keys to Success

Another reason some companies cite for not recruiting people with disabilities is simply a lack of knowledge about how to work with them. Again, this concern is unfounded, as the folks at InterMotive well know.

Keys to InterMotive’s success with employees with disabilities are consistent assessment, training, development, and feedback—processes the company has invested in for employees of all abilities for decades. “In many ways, these employees are just like any others that walk through our doors,” Linda said. “We identify their skills and interests, find the right role for them, and give them the training and support they need to be successful and find a career path here.”

InterMotive began hiring employees with disabilities long before DEI became trendy. “We aren’t doing this because someone told us we had to,” Greg said. “We’re doing it because it makes us a better business.” And he cautions companies against hiring from underrepresented communities simply to “check a box.” He said it requires investment, but once you make it, “you realize you are more alike than different.”

“They want to work. They want to contribute,” Linda said. “Their joy is a gift.”

“I'd never seen a manufacturing floor where employees were so happy to be there."—Greg Schafer, President and cofounder of InterMotive Vehicle Controls

Solve Your Manufacturing Skills Gap with PRIDE Industries

PRIDE Industries offers state-of-the-art facilities and a full suite of electronics manufacturing, packaging and fulfillment processing, and supply chain management services. And our inclusive workforce—about 50 percent of our employees have a disclosed disability—means that working with us allows you to make a positive social impact with your business spend, while meeting consumer demand for products made in the USA.
hand in blue glove working on microchips medical device manufacturer
Case Study:

Medical Device Manufacturer

20% Cost Savings and On-Time Delivery for Medical Device Manufacturer

When a Class II medical device manufacturer needed a reliable partner for production and supply chain management, it turned to PRIDE Industries. For more than ten years, PRIDE Industries has helped this manufacturer produce essential devices that are used to reduce pain and speed recovery for athletes, military personnel, and post-surgery patients worldwide.

Situation: Turnkey Medical Device Manufacturer

In 2008, a Class II medical device manufacturer hired PRIDE Industries as contract manufacturer to provide a full turnkey solution in supply chain management and electronics manufacturing services. Our solution is vertically integrated with global distribution support.

Services Provided

  • Supply chain management
  • Electronics manufacturing services
  • Strategic partnership, not solely transactional

Results

  • 95%+ optimized, on-time delivery
  • 20% cost savings realized through custom solutions and pricing
  • 18 months – obtained ISO13485 medical certificate and FDA compliance
  • 60% = 2021 forecast of YOY production volume increase for one product
  • Initial results exceeded expectations, leading the customer to expand the manufacturing contract

Highlights

20%

Cost savings

95%+

optimized, on-time delivery

“PRIDE Industries has been a reliable business partner for several years. The team at PRIDE remains in constant communication to ensure successful production of our products, and they consistently deliver quality results. We trust PRIDE Industries and we look forward to continuing to work with them as our business grows.”

Learn more about our services

For more than 20 years, PRIDE Industries has maintained a successful business partnership with HP Inc. Since the beginning of the partnership, PRIDE Industries has provided sorting and recycling services for HP’s products. Today, PRIDE Industries provides an expanded suite of supply chain management services to the Fortune 500 company.

 

Currently, PRIDE Industries provides both supply chain management and fulfillment services to HP from its facilities in California. These services include spare part fulfillment, warehousing, and shipping for consumer, commercial, and enterprise printing. PRIDE Industries also handles the kitting and distribution of HP Inc.’s Printer Maintenance Kits.

Customized Supply Chain Management Services

The HP Inc. program at PRIDE Industries is a global, 24-hour operation made possible by PRIDE Industries’ team of supply chain planners, buyers, and business support assistants, who focus on striking the optimal balance between supply chain inventory levels and high customer level-of-fill targets. 

 

PRIDE Industries’ procurement team manages multiple customer service functions, including purchase order management, delivery performance analysis, and troubleshooting.

 

Additionally, the PRIDE Industries supply chain management team performs forecasting and demand planning; creates material purchasing requests; manages part setup and maintenance, lifecycle planning activities, and part roll tasks; and provides overall operational project management support.

A Growing Partnership

In 2018, due to PRIDE Industries’ excellent operational performance in supply chain management and fulfillment, HP Inc. expanded its partnership with the social enterprise. The new responsibilities included:

  • Spare part fulfillment to support HP’s print business, including its Graphic Solutions line of business.
  • The designation of PRIDE Industries as the sole North America regional distribution center for HP’s printing and copier new spare parts needs. This includes managing the defective/credit return processing program for spare parts via the iReturns system, and handling all cross-docking activities.

Beyond the benefits of cost-effectiveness and operational efficiency, partnering with PRIDE Industries also allows HP Inc. to further its ESG efforts.


As HP Program/Supply Chain Manager Ralph Mendez says, “By contracting with us, HP Inc. is actively supporting our mission to create employment for people with disabilities.” 

A Supply Chain Partner You Can Rely On

PRIDE Industries offers supply chain management, kitting and fulfillment, and other business services to emerging and Fortune 500 companies.   

Here are 10 upcoming conferences and events that supply chain and logistics professionals should be aware of:

This three-day supply chain event offers both educational and networking opportunities. In-depth panel discussions focus on supply chain trends, transportation regulations, emerging technologies, and infrastructure. The lineup is tailored to provide carriers, shippers, 3PLs, and other professionals with a full picture of the multimodal supply chain.

Billed as a showcase of the cutting edge of logistics and supply chain trends, Manifest 2023 brings together industry leaders, innovators, investors—and anyone interested in new developments in the supply chain.

Billed as the only worldwide event for reverse logistics professionals, this conference offers three days of powerful keynote speakers, content-driven panel discussions, and a multitude of networking opportunities. Pre-event activities include Top Golf and Academic Roundtable.

This year the focus is on “Total Procurement”—integrating multiple stakeholders in the procurement process, including upstream, internal, and downstream actors. Two days of panel discussions provide high educational value, and the conference offers more than 12 hours of networking opportunities.

This conference and expo delivers insights, strategies, and frameworks for chief supply chain officers (CSCOs) and supply chain leaders to think big, make bold moves, and drive real impact within their organizations.

The Supply Chain Summit serves as an annual platform to exchange ideas and collaborate on the impact of market dynamics and new technologies for current and future supply chain and operations leaders. The event offers in-depth discussions on fostering innovation, maximizing supply chain profitability, and increasing visibility and flexibility to mitigate risk.

Backed by Reuters, this conference is billed as the only event covering end-to-end supply chain, built around the “Plan, Source, Make, Deliver” concept. Here’s your chance to hear a broad array of speakers from some of the world’s most successful Fortune 500 companies. #SCUSA23

As the largest non-profit association for supply chain companies, ASCM is an unbiased partner, connecting companies around the world to thought leaders in all aspects of supply chain management. If you’re interested in presenting at this conference, submit your abstract to the event organizers by December 27, 2022.

This conference offers more than 100 informational sessions covering all aspects of the end-to-end supply chain. Speakers include renowned experts and industry leaders from Fortune 500 companies.

This event offers information about new supply chain trends and gives you a chance to observe next-generation technology and equipment in action, so that you can make forward-thinking decisions about your supply chain.

Ready to take your supply chain and logistics processes to the next level?

Partner with PRIDE Industries to streamline your operations, drive customer satisfaction, and improve your bottom line.

When most people think of supply chain risks, they picture ships stuck in port, factories closed due to COVID lockdowns, or empty shelves where component parts once sat. But these physical obstacles are not the only risks that manufacturers face. Cyberthreats have been growing steadily over the last few years, and during the pandemic, these supply chain security risks escalated.

You might think that digital attacks are a threat only from your third-party software vendors. In the SolarWinds hack, for example, more than 18,000 customers of the IT management company uploaded a malicious update, compromising their systems. But the attack didn’t stop there. Once cybercriminals infiltrated a company’s network, linked systems gave them access to that company’s partners and customers as well. The fact is, any vendor whose software talks to yours—such as billing and payment systems—can compromise your company’s security.

Linked Systems: A Benefit and a Risk

Just-in-time manufacturing has always required constant communication and a high degree of collaboration between manufacturers and their suppliers. During the pandemic, this collaboration increased, as manufacturers sought more efficient ways to source raw materials and component parts. Timely data-sharing became even more critical, and many companies increased their internet-enabled connections to suppliers.

While tighter collaboration allowed companies to improve the predictability of their supply chain, it also created new entry points for cybercriminals to try to exploit. In short, by connecting more closely with suppliers, these companies increased their own attack surface.

And cybercriminals were quick to take advantage of this broader target. According to the National Association of Manufacturers, in 2020, the number of cyberattacks on manufacturers spiked by more than 300% from the previous year, accounting for 22% of all attacks across all sectors, up from 7% in 2019.

A New Twist on an Old Supply Chain Security Risk: Phishing

The surge in cybercrime isn’t driven solely by direct attacks like SolarWinds. Phishing is also a growing problem, as criminals employ new technologies to take this old hacking technique to a new level.

The Anti-Phishing Working Group (APWG) reported that in the first quarter of 2022, there were 1,025,968 total phishing attacks—the first time the three-month total has exceeded one million. Given that email users are more savvy than they used to be, how is this possible?

fishing hook
There were more than a million phishing attacks in the first quarter of 2022.

It’s simple: Today’s cybercriminals have gone way beyond simply faking emails. Some use sophisticated social engineering techniques like AI-generated voicemails and deepfake video recordings. People know to be wary about email, but how many people think to question the authenticity of the voice at the other end of a phone call?

Even the relatively low-tech business email compromise (BEC) attacks have gotten better. Fake websites are much harder to differentiate from the legitimate versions, and cybercriminals now clone emails from legitimate employees to create urgent requests that sound authentic.

Today’s criminals are also more patient than ever, and they do their homework on both the person they’re targeting and the person they’re mimicking, in order to create an email or a call that’s highly realistic. And with people posting their personal details on multiple social media sites—including LinkedIn—it’s easier than ever for hackers to glean the information they need to successfully impersonate someone.

A One-Two Punch: Combining Hacking Techniques

Hackers are patient. They’re careful. And they think long term. They know that by working through suppliers, their attack may take months to execute, and they’re willing to wait. This is why more and more, malicious actors are switching from attacking a company directly to infiltrating their suppliers. Once in a supplier’s system, undetected, they have time to plan an attack against your company.

In this situation, more often than not, the malicious actor will assume the identity of a trusted contact at the supplier, and then reach out to your company. This technique, called spoofing, allows criminals to create highly credible phishing emails, calls, and even videos. Many companies with excellent security have nevertheless been infiltrated through their suppliers’ systems.

Digital Supply Chain Security: A Growing Concern

Digital threats to supply chain security are a growing problem. That’s why five years ago, the National Counterintelligence and Security Center (NCSC) designated April as “National Supply Chain Integrity Month.” The goal of this annual awareness campaign is to encourage companies—especially providers of information and communications technology—to fortify their digital security.

And businesses are indeed becoming more aware of the issue. Many companies, manufacturers included, are taking action. According to a survey conducted by PwC last year, nearly half of all manufacturers provided information or assistance to third parties—including suppliers—to help them improve their own cybersecurity. Nearly four in ten survey respondents (36%) said they’d rewritten contracts with third parties to mitigate risk, and 30% went as far as terminating partnerships with third-party vendors because of unacceptable security practices.

Cybersecurity Risk Management

There are several steps you can take to make your company a hard target for cybercriminals. Strong data encryption may be the most important. The ideal standard for encryption is the Advanced Encryption Standard (AES), a symmetric block cipher used by federal agencies to safeguard classified information. AES has been available for commercial use for more than 20 years, and provides excellent protection against cyberattacks.

cybersecurity concept
Advanced Encryption Standard (AES) is a must for protecting sensitive data.

AES encryption can be found in many of today’s frequently used devices, applications, and networks. WhatsApp messages, for example, are encrypted using 256-bit AES encryption. Google Cloud uses this standard as well. If you’re system isn’t making use of AES, it’s time for an upgrade.

However, even great encryption can’t prevent attacks that come from security flaws in software, which is why it’s important to monitor your systems for unusual activity. Zero-day attacks, in which cybercriminals exploit a security flaw before the software maker has issued a patch, are impossible to predict—you can’t fix what you don’t know is broken. But unusual activity can be your first signal that something is wrong.

Monitor Your Suppliers

Even if your company’s data is strongly encrypted, and you’re vigilant about software and system monitoring, you can still be vulnerable to attack through your suppliers. Any vendor software that interacts with your own is open to exploitation, putting your own systems at risk. This is why it’s critical to monitor systems for unusual activity.

And to repel phishing attacks, it’s important to have protocols in place that require staff to double check sensitive requests, and to conduct regular training in spotting fake communications. Here again, it’s just as important that your suppliers have these security protocols in place as well. Your vendor risk management program should include a yearly review of your supplier’s security protocols.

And because even the most secure systems still face some risk, make sure your company has an up-to-date incident response plan. Your company should have backup systems and emergency protocols in place, so that no time is wasted in assessing and repairing the damage from a successful hack. Last year, when Accenture fell victim to the LockBit ransomware attack, it was able to contain the threat right away by implementing a plan it had prepared well in advance.

The Accenture incident exemplifies what has become a truism in the business world: When it comes to system security, the companies that fare the best are the ones that plan for the worst.

A Secure Manufacturing Partner

At PRIDE Industries, we help companies increase profits by stabilizing their supply chains. Our ITAR registration demonstrates our ability to provide the highest levels of security, structure, and expertise. Working with us allows you to minimize the risk of disruption, while making a positive social impact with your business spend.

According to the National Association of Manufacturers, in 2020, the number of cyberattacks on manufacturers spiked by more than 300% from the previous year.

The European Union Agency for Cybersecurity (ENISA) has several recommendations to help companies reduce the risk of supplier-enabled cyberthreats:

  • identify and document all suppliers and service providers;
  • define risk criteria for different types of suppliers and services such as supplier and customer dependencies, critical software dependencies, single points of failure;
  • monitor supply chain risks and threats;
  • manage suppliers over the whole lifecycle of a product or service, including procedures to handle end-of-life products and components;
  • classify assets and information shared with or accessible to suppliers and define relevant procedures for accessing and handling them.

Beginning in 2019, the prevailing supply chain trends took a negative turn, as the pandemic and other global events created significant manufacturing disruptions. Pandemic lockdowns in countries like China and Vietnam, severe weather around the world, and geopolitical forces led to shortages in multiple industries. Luxury car manufacturers had to scramble for semiconductors, in competition with industries like medical device producers, who also had trouble obtaining medical-grade plastics. Even commercial printers had a hard time sourcing paper and ink.

But this year, the situation has improved. The pandemic is receding, businesses and governments are finding workaround solutions, and supply chain disruptions have eased. According to Freightos, as of September 2022, shipping rates had dropped 61% from a year earlier. On the inputs side, a push towards domestic production for certain crucial components—such as semiconductors—should help as well. This is good news.

But shortages of raw materials continue to be a problem, and that same Freightos analysis points out that shipping costs are still 170% above pre-pandemic levels. As Tony Lopez, Vice President of Manufacturing & Logistics Services for PRIDE Industries, says: “We’re not out of the woods yet. It’s going to be a while longer before we can comfortably return to just-in-time manufacturing, and I think we’ll need further restructuring to get there.”

Lopez is not the only manufacturing executive to voice this opinion. According to an August 2022 survey by the National Association of Manufacturing, 78.3% of manufacturing leaders expect supply chain disruptions to continue to be their primary business challenge well into 2023. This perspective is hardly surprising, given that multiple global forces continue to disrupt the supply chain. Here are seven key factors that manufacturing businesses will have to contend with in 2023.

“We’re not out of the woods yet. It’s going to be a while longer before we can comfortably return to just-in-time manufacturing, and I think we’ll need further restructuring to get there.”

Worker Shortages and Rising Wages

American companies have long looked to Asia for affordable labor. But that supply chain trend began to shift long before 2019, and the pandemic has only accelerated this change. According to an analysis by Ernst & Young, wages in China jumped by 12.5% in 2020. That same year, U.S. wages increased by a relatively modest 3.9%. Chinese wage growth is expected to continue as more provinces raise their minimum wage and the yuan remains strong. These changes have made some analysts worry that China is pricing itself out of the supplier market. And China is not the only country to see significant wage growth—Vietnam and Taiwan are also raising wages. Last month, Taiwan raised its minimum wage by $865 per month.

In the U.S., a more significant supply change trend is the shortage of workers, particularly in transportation. The trucking industry in the U.S. is already short 80,000 drivers, and according to the American Trucking Association, that shortage will double by 2030. This growing lack of drivers is one reason why lead times for container shipments remain extended, even as port backlogs ease and truck availability improves.

worker shortage
Despite some improvement in 2022, worker shortages remain a problem.

The China Situation

China isn’t just getting more expensive, it’s also gaining a reputation as an unreliable supplier. The country’s “zero-covid” policy has led to unpredictable and extended factory shutdowns over the past two years. China is home to three of the world’s five largest ports, located in cities that are also manufacturing hubs. Of these, Shanghai is the most important, typically handling 40% of the country’s exports. When Shanghai was placed in lockdown for two months this past year, manufacturing was disrupted and shipping traffic at the port dropped by 20%.

The Chinese government is expected to adhere to its zero-covid policy at least through the first half of 2023, which will further disrupt the delivery of both raw materials and component parts. And this isn’t even the most serious issue concerning China.

Eventually, China will loosen its COVID protocols, but the tension between the U.S. and China shows no signs of abating. China continues to behave aggressively towards Taiwan, the world’s biggest supplier of semiconductor microchips—and a strategic U.S. ally. If China and Taiwan ever go to war, global supplies of chips and other goods—especially electronics—will suffer greatly.

War in Ukraine

While a war between China and Taiwan is only hypothetical, the conflict between Ukraine and Russia is devastatingly real. Russia invaded Ukraine in February, and since then both countries have seen their exports of raw materials drop, due both to economic sanctions and to the transportation disruptions of war. When two Ukrainian chemical companies had to shutter, the world saw its supply of neon—which is used in chipmaking lasers—drop by half. Supplies of palladium, cobalt, and nickel are also greatly impacted by the ongoing war.

The war in Ukraine has already lasted longer than many experts predicted, a fact that prompted Supply Management Magazine to advise its readers that “…in the long run they should…consider any opportunities to increase supply chain resilience by switching to more local supply partners.”

Climate Change

As climate hazards become more frequent and severe, the impact of weather on the supply chain increases. A recent McKinsey study found that the probability of a hurricane strong enough to disrupt semiconductor supply chains will increase by up to four times by 2040, and that the probability of extreme rainfall disrupting heavy rare earths production will increase by as much as three times by 2030. In other words, the odds of a manufacturing site being taken out by an extreme weather event is growing.

And of course, extreme weather affects the movement of goods, especially since 90% of goods traded internationally are shipped by sea. Hellenic Shipping News reports that in 2020, roughly 3,000 containers of goods were lost overboard due to rough weather. To avoid these types of loss—and reduce the risk to ship and crew—captains will opt to stay in port longer or take more circuitous routes, which contributes to transportation delays and higher shipping costs.

The Push for Sustainability

Even as the supply chain grows more precarious, consumers are demanding that companies find and source greener materials and component parts. Today, environmental organizations scrutinize a company’s entire supply chain, and report back to consumers, who increasingly prefer to buy from companies with sustainable business practices. More than ever, companies with environmentally friendly practices are viewed favorably by the market. And the halo effect of sustainable manufacturing isn’t limited to a company’s reputation. A recent study published in ScienceDirect found that consumers were willing to pay more for sustainably made products—not just because they want to support green manufacturing, but also because they perceive eco-friendly products as performing better than their traditionally manufactured counterparts. For these reasons, it’s important for companies that are greening their supply chain to capitalize on their investments through public relations and awareness campaigns.

New Legislation: Positive Supply Chain Trends

The disruptions of the past two years are leading legislators to take a closer look at current supply chain risks, and governments around the world are enacting new legislation designed to address these issues. In the U.S., the Ocean Shipping and Reform Act of 2022, which became law on June 16, aims to curb the worst behaviors of international shipping companies, which raised prices by an order of magnitude during the pandemic. The cost of shipping a forty-foot container, for example, rose from about $1,300 to more than $11,000. The new law is designed to eliminate these unfair charges and crack down on some of the international shipping practices that have negatively impacted American businesses, including the unreasonable denial of American exports.

Another piece of legislation that should help ease supply bottlenecks is the CHIPS and Science Act, which was signed into law on August 9. In announcing the new law, the White House was blunt about its purpose: The new legislation is designed to “lower costs, create jobs, strengthen supply chains, and counter China.” On the heels of this new law, Micron and Qualcomm both announced a significant expansion of their chip-making capabilities. While American production of chips is still overshadowed by Taiwan’s output, increasing the domestic production of this critical component will bring more stability to multiple American industries.

The Latest Supply Chain Trends: Cyberthreats

The disruptions brought on by the pandemic accelerated multiple supply chain trends, including the growing closeness and interconnectivity of businesses and their suppliers. Companies now routinely link systems with their suppliers to facilitate communications and operations. But while linked systems are efficient, they have the drawback of expanding the “attack surface” for cybercriminals. These additional entry points can be exploited through aggressive hacking or by simple, old-fashioned phishing. To increase security, manufacturers not only have to ensure that their own systems are secure—they have to monitor their suppliers’ systems as well.

Our Prediction for 2023: Getting Better, But No Quick Return to Normal

A review of current supply chain trends shows generally positive developments. Supply bottlenecks are easing, and shipping costs continue to drop. Along with increased domestic production of critical components, these supply chain trends bode well for U.S. manufacturers. But a return to pre-pandemic normalcy remains elusive, primarily because of global politics. The war in Ukraine continues to disrupt global supplies of raw materials, and tension between the U.S. and China threatens the supplier relationships of many businesses. So while the supply chain is slowly improving, it’s a precarious recovery, and American businesses would be wise to diversify their supplier options.

A Manufacturing Partner You Can Rely On

At PRIDE Industries, we help companies increase profits by stabilizing their supply chain. Our West Coast facilities minimize your risk of disruption, optimize manufacturing and fulfillment processing, and provide flexible, on-demand inventory schedules. Working with us also allows you to make a positive social impact with your business spend, while meeting consumer demand for products made in the U.S.A.
pcb board manufacturing
New legislation should expand the supply of critical components.