Are our Supply Chain Strategies Redistributing Economic Wealth and Standards of Living?

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Mark Lawless

At a time where recessionary forces are at work, many questions are being asked about how businesses have evolved their management practices and how this has affected their many stakeholders. The extent and depth of the recession has surprised many, and expansion of the ranks of the unemployed has hampered demand, seriously affecting patterns of demand and the economic performance of businesses in all industries around the globe. For the U.S. with its consumption dominated gross domestic product, this has had a devastating effect on economic conditions.

The competition for lower cost, higher profit margins, and supply chain efficiency has resulted in a continuous shifting of production and service resources from geographic region to geographic region throughout the globe. The economic theory is that as these jobs and resources move, the existing regional resources are moved to their next highest and best use. And in this context, the global economic welfare and economic performance is maximized. But the emerging evidence is that while this may be true, it does not necessarily imply that everyone benefits long-term from such an approach. There are regional winners as losers as the global economic dance continues. Building global economic and business growth may have many winners and losers at different moments in time. Structural and frictional unemployment, reductions in household income as workers and resources move to lower compensated jobs and industries, reduction in availability of healthcare as a result of the relative cost of health insurance, and reduced retirement program availability are all factors that are challenging workers and whole economies and their long-term goals.

One has to ask the extent to which the supply chain strategies that have been adopted to optimize the performance of companies that have evolved from regional and national companies to global companies – outsourcing production and services, continuously pursuing more efficient and lower cost locations – may have contributed to a pattern of shift of economic wellbeing across geopolitical boundaries. Do companies have any obligation to the welfare of the communities and geopolitical entities upon whose resources they draw, or is it a relationship solely of a “transactional” nature? Is unbridled pursuit of efficient supply chain development in the long-term economic interest of the countries affected, or does it simply pass the economic baton from one region of the world to another?

These are challenging issues in these challenging times. The long-term prospects for the many regions of the world, the economic welfare of their populations, the sharing of economic wealth, and the interests of the companies operating within these regions are all mixed in the evolving and ever-changing economic brew. And a key driver of these forces is the supply chain and how it is managed and developed by the companies serving their investors and stakeholders.

What do you think?

Institute of Business Forecasting & Planning
Senior Consultant
Mark Lawless is a Senior Consultant for the Institute of Business Forecasting & Planning. He has extensive experience in forecasting, planning, business process development, and business management. Mark has been associated with the Institute of Business Forecasting since its inception. He has held a C-level positions, including Chief Planning Officer, Chief Financial Officer, and Chief Operating Officer in his career. During his company affiliations, he has been responsible for 1) Development of planning and forecasting processes; 2) Development of forecasting models; 3) Selection and implementation of supporting automated systems; 4) Presentation of forecasts and plans to all levels of management and to major investors and analyst groups; 5) Remediation and continuous improvement of forecasting & planning processes and related forecasting models. During his association with the Institute of Business Forecasting, he has published many articles in the Journal of Business Forecasting and serves as an editorial advisor to the publication. Mark has made a variety of presentations at IBF Conferences on topics of planning and forecasting. He has served as IBF conference chairperson, conference keynote speaker, and moderator for IBF topical groups at IBF conferences. Mark has participated in the development of the IBF's Certification Program, and has developed and run tutorials to prepare those taking the certification examination. He has been a key participant in the IBF In-House Training Program since its inception. Mark holds an undergraduate degree in Economics, and graduate degrees in Economics, Finance, and Accounting. He is an alumnus of Southern Illinois University (Edwardsville), Washington University (St. Louis), Boston College, and Bentley University. He is a member of Financial Executives International (FEI).

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