Issue link: https://iconnect007.uberflip.com/i/1433652
DECEMBER 2021 I SMT007 MAGAZINE 75 even be this severe in a year. ere are some arguments against that as well. But I think that in much longer time horizons they don't con- sider some of those near-term pressures. e flip side is that, if you're looking at a capital deployment and factories of the future, argu- ably the cost is going to be comparable wher- ever you are in the world outside of some labor component tied to deploying that capital. So, if I'm buying equipment, it will have a general global price and I'm going to pay the same wherever I buy it. Now, I'm going to have some other costs based on local implementa- tion or regulation. Let's say Apple suddenly and unilaterally said, "We're going to produce 50% of what we sell in every market inside of that market." It's not a reshoring decision by it- self but that they want to service the markets with production inside of those markets. en you would see a big swing back because there is so much consumption in the U.S. You've had a lot of companies say, "ere's a lot of ambiguity happening right now in China, and we don't want to be in this market." At the same time, you have a lot of the Chinese com- panies which have lost a lot of value in the last year as there seems to be a tightening of the re- gime's direction. I think the tariffs in place are a factor, but there are a lot of forces that have diminished the view of China. Matties: Shawn, you have given us a lot to con- sider today. ank you and we look forward to seeing you at IPC APEX EXPO. DuBravac: ank you, Barry. SMT007 References 1. "Prepared Remarks Before the Principles for Responsible Investment 'Climate and Global Finan- cial Markets' Webinar, July 28, 2021. by Sagi Reuven Prior to the global pandemic, most people didn't give the supply chain much thought. There was no reason to—consumers had become accustomed to a reality in which they could simply click on an item on a website, and it would magically arrive on their doorstep the next day. What difference did it make how it got there and where its components were produced as long as everything was running smoothly? That reality has changed drastically in the past year and a half since the onset of the pandemic. Suddenly, it seems like there is a backlog of sever- al months on every item, from cars to washing ma- chines to books; the supply chain has become the headline news in leading publications. What hap- pened? Are the changes tied solely to COVID-19? Will things return to normal as we recover from the pandemic? The challenges facing electronics manufacturers are compounded by the fact that they are compet- ing with manufacturers of products as diverse as food, medicine, clothing, furniture, and cars for lo- gistical resources that have become increasingly scarce in the past year and a half. And that doesn't even consider extreme situations like when one of the world's busiest shipping lanes was blocked for almost two weeks earlier this year. No industry is immune, not even electronics. To read the rest of this column, click here. Lean Digital Thread Why is Everyone Suddenly Interested in Supply Chain?