As the U.S. deals with the East Coast dockworker strike, businesses reliant on these ports are evaluating strategies to mitigate the supply chain disruptions. However, some commonly used approaches are becoming increasingly difficult to implement due to the current state of global supply chains. This is prompting manufacturers to look toward more sustainable long-term solutions, such as nearshoring and automation, to protect their operations from future risks.
Short-Term Strategies and Their Challenges
In response to the strike, many companies might initially consider short-term strategies like building up inventories or modifying shipping routes.
“One mitigation risk to the strike is to build up inventories,” said Dr. Todd Bauman, Senior Director of Procurement at Ascential and global supply chain expert. However, many businesses are already managing high post-pandemic inventory levels and facing the financial strain of maintaining these inventories due to a slowing manufacturing economy and high capital costs.
Continuity planning could also involve exploring alternative shipping routes, such as moving goods through different ports or using different modes of transportation like rail or air freight. However, with potential strikes in Canada’s rail system and ongoing logistical challenges like Red Sea diversions and Panama Canal restrictions due to drought, finding reliable alternative shipping options is proving difficult. Increasing demand for these alternative routes is also driving up costs and leading to limited availability, further straining manufacturers’ ability to mitigate risks.
A Long-Term Solution: Nearshoring and Automation
Given the challenges associated with traditional short-term strategies, many manufacturers are turning to long-term solutions to build more resilient supply chains. Dr. Bauman highlights that nearshoring—combined with automation—offers a significant advantage. “Onshoring or nearshoring allows for shorter supply chains resulting in an overall risk reduction. Right shoring based on where you manufacture or where your customers are located creates a huge advantage,” he explains.
Nearshoring brings manufacturing operations closer to home, reducing dependency on distant ports and shortening lead times. But what makes nearshoring truly effective is the integration of automation.
How Automation Supports Nearshoring
Automation technologies like robotics, machine vision, and process automation systems streamline operations and reduce labor costs, enabling companies to bring production closer to home without sacrificing efficiency. In an article for Forbes, Ascential Technologies CEO Jeff Moss emphasizes the importance of automation in successful nearshoring efforts. He notes that automation not only makes nearshoring viable but also strengthens manufacturers’ control over their supply chains, reducing the risk of disruptions from geopolitical factors and labor stoppages like the potential port strike.
Automated systems can handle tasks like assembly, material handling, and quality control with high consistency, while also being scalable to meet fluctuations in demand. This adaptability is crucial when external disruptions like strikes, political unrest, or natural disasters threaten supply chains. By adopting automation, manufacturers can continue operations uninterrupted, responding more swiftly to changes in market demand or transportation availability.
Nearshoring as a Proactive Approach to Risk Management
In a global supply chain environment increasingly defined by uncertainty, nearshoring is not just a reactive measure but a proactive approach to reshaping supply chains. By bringing operations closer to home and reducing reliance on volatile international transportation networks, businesses can build supply chains that are more flexible and responsive to market conditions. When combined with automation, nearshoring offers manufacturers the ability to safeguard their production and distribution against potential threats.
Preparing for the Future
As companies try to cope with the U.S. East Coast port strike, it is clear that relying on short-term strategies alone is no longer sufficient to mitigate risks. While building up inventories or diverting shipping routes may provide temporary relief, the long-term solution lies in adopting automation and nearshoring practices. These strategies enable manufacturers to reduce dependencies on distant supply chains, better manage risks, and ensure business continuity in the face of disruptions.
At Ascential, we continue to integrate automation technologies that enhance the resilience and efficiency of our clients’ operations, helping them navigate turbulent supply chain challenges. By investing in these long-term strategies, businesses can build more agile, robust supply chains that are prepared to meet the challenges of the future. In an increasingly unpredictable global economy, automation and nearshoring are no longer just strategies for growth—they are essential for survival.