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Supply Chain Issues Bring Manufacturers Back to the US Featured

Supply Chain Issues Bring Manufacturers Back to the US "Red, White & Blue"

The Covid 19 pandemic has changed the way we look at the supply chain industry. Prior to the pandemic many organizations headquartered in America opted to manufacture products overseas as both materials and labors were cheaper.

Many industries in the United States depended on countries like China and India to produce their goods such as electronics, medical products, pharmaceuticals, and plastic and for the most part were satisfied. This changed during the pandemic when the supply chain process collapsed. This could be seen early in the pandemic when many hospitals around the globe were unable to get the necessary personal protective equipment (PPE) for staff from their suppliers in China.  This was not only due to limited supply but also China’s need for the supplies choosing to supply their hospitals first before shipping the surplus overseas. 

Later in the pandemic, China and India ramped up global production, but the products were stuck on cargo ships waiting to be unloaded at ports around the world causing another disruption in the supply chain.

Supply chain woes continued as many Chinese factories were forced to temporarily shut their doors due to China’s strict Covid-19 policies. This lead many US-based companies to believe that the best course of action is to manufacture goods in the United States rather than outsourcing jobs. According to Dodge Construction Network Chief Economist Richard Branch - it’s "a huge incentive to set up shop here in the United States.” In a conversation with Yahoo Finance Live Branch continued by stating, “"It's certainly clear that manufacturers want more control and more predictability over their supply chains than what they've gotten used to over the past couple of years.”

According to data from Branch's company Dodge Construction Network - construction of new manufacturing facilities in the US have increased 116% over the past year. The Bloomberg article sites semiconductor factories in Buffalo, steel factories in the south and electronic chip factories in Phoenix. While many of these companies may chose to keep the factories they have in Asia, these new manufacturing centers will act as a stopgap should there be another supply chain disruption.  

Another industry that has been affected by supply chain turmoil is the pharmaceutical industry. Today the industry relies heavily on other countries like China to supply lifesaving medications to the United States.  According to a research paper by the Coalition for a Prosperous America – the United States relies on oversea production for 90% of their generic active pharmaceutical ingredients (API) found in medications like antibiotics. Without access to API, this could cause a huge health scare in the United States as millions of people would not have access to live-saving medication.

According to the FDA Drug Shortage database – there are roughly 120 medications that are currently in short supply. In an open letter in The Hill, written by Representatives Markwayne Mullin (R-Okla.) and Angie Craig (D-Minn.) this is three times the amount from last summer. Together, Reps. Mullin and Craig hope to pass a bi-partisan bill that would resolve these shortages. Named the  The American Made Pharmaceuticals Act the bill would also create federal incentives for American-made essential drugs.

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 Danielle Loughnane

Danielle Loughnane earned her B.F.A. in Creative Writing from Emerson College and has currently been working in the data science field since 2015. She is the author of a comic book entitled, “The Superhighs” and wrote a blog from 2011-2015 about working in the restaurant industry called, "Sir I Think You've Had Too Much.” In her spare time she likes reading graphic novels and snuggling with her dogs.

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