In our May edition of the Spark Centre Newsletter we posed a question to our readers and it sparked a great conversation!
Read on for a just a few of the incredible insights we received!
“Do you think the current pandemic will alter how and where Canadian businesses manufacture their products and/or purchase their materials?”
Sherry Colbourne, CEO, Spark Centre
“Greatly. I think the pandemic shines a light on the impact that global supply chains can have on business when those supply chains are interrupted. I am reminded, however, that we are still a global society so we mustn’t close the door on these supply chains but, rather, diversify our supply chains to minimize the impact. It brings to mind the old 80’s term – “glocal” – both global and local for maximum benefit.”
Katie Zeppieri, Founder, Girl Talk Empowerment
“I think that COVID-19 is going to make a lot of businesses think differently about their supply chain and possibly even look for ways that they can manufacture their products here in Canada. This global pandemic has shown just how many external and unexpected factors businesses can affect and disrupt the economy.”
Frank Auddino, Advisor, Spark Centre
“Companies have to ask themselves whether they have the right supply chain and agility to withstand a three, six, twelve month or more disruption.
McKinsey just released a report that says: “Many companies are focused temporary stabilization measures rather than moving supply chains out of China.” Same can be said for manufacturing decisions, even if it’s not China, as we see the pandemic hit every global market.
But more importantly, “COVID-19 is also serving as an accelerant for companies to make strategic, longer-term changes to supply chains — changes that had often already been under consideration”.
I would say the same applies to manufacturing decisions — ultimately it comes down to this: risk management is an important part of any business and the number one rule of business is always expect the unexpected.”
Chris Gillis, Manager of Applied Research Business Development, Durham College
“My guess is that most large manufacturers will continue to be distributed globally but I would say that some may develop more plants closer to the markets they serve, diversifying their manufacturing locations in order to minimize regional disruptions as well as develop supply chains within regions.
Potentially small and medium manufacturers might be able to take advantage of this regional capability development by larger players by partnering or becoming a contract manufacturer as this helps preserve capital and provides flexibility for the large players. I see more reliance on collaborations than competition in the coming year.
Personally I see this notion of SMEs forming advanced manufacturing networks as potentially a key strategy for rebuilding Canadian manufacturing. Networks can allow smaller companies to band together to leverage the individual capabilities and capacities of their members, in going after business that none would be able to do individually.”
Joel Nascimento, CEO and Lead Architect, Hermes Platform
While it’s difficult to forecast the precise steps that Canadian businesses will choose as a response to the cycling socioeconomic release-lockdown-release life, it is reasonable to assume that this situation will last quarters or more than a year. Therefore businesses will need to cope with this reality.
A recoil from off-shore, single-spotted supply chains can most likely be one of the first consequences. Also, since production and demand do not stick to previous forecast models anymore, solutions such as local manufacturing and sourcing, on-shore stock increase, development of products and production inputs with higher shelf life, among others, are likely to happen, as outlined by several papers and posts like IMD business school in Switzerland.
As known from all of us, the impacts and opportunities for the manufacturing and supply-chain are immense. The capacity to read the environment fast and be lean will be necessary to overcome this situation, while the reliance towards Canadian suppliers and supply chains will get a boost. It seems that “Proudly made in Canada with Canadian ingredients” will be more and more common”.
