December 2016 | Commentary | Checking In

Times They Are A-changin’

Tags: Global Economy, Manufacturing, Logistics, Supply Chain

Keith Biondo is the publisher of Inbound Logistics magazine.

Let's say you are a manufacturer in the Midwest. You've got an excellent product line, a well-tuned supply chain, dedicated workers, and a great brand. Let's say your company's name is Harrier, because you have a long history of being a tough global competitor.

The problem is, your competitors moved offshore, reaping competitive advantages such as lower labor costs by a factor of 5, non-disruptive regulations, and a lack of frivolous lawsuits. You also have a bevy of foreign competitors enjoying the support of business-friendly governments seeking worker wealth by recognizing that the path to prosperity is production. Those governments subsidize companies and even become part owners with your competitors. In other cases, they favorably adjust currency values, or use taxes, regulations, and selective enforcement as support.

You, on the other hand, operate in an environment where it seems your own government is an impediment to enterprise success. Who pays one of the highest income, real estate, and other tax rates in the industrialized world? You do! You are also favored with a basket of deplorable regulations—53 new ones at your site in the past 6 years, for example—many of which have little impact on safety or sustainability. But regulators do what regulators do, occasionally without regard to the impact on the worker they seek to help.

One little-known regulatory tool you must contend with these days is "sue and settle." It's a quick and easy way to get new rules and regulations passed. The government wants more regs, but can't get it done. Solution? Invite a progressive group or org to sue the United States, and then quickly settle the lawsuit. Presto: New rules and regs without the political fallout and hassle of the legislative process!

So what choice does an industrialist have? Abandon that business line and focus on another one. Sell. Cross your fingers, hope for the best, drip, drip, drip of firings, and manage your company's decline. Or join the movement.

In time, you've got a new modern plant built over there, your supply chain partners are already in place as they supply your competitors. In just a few months, you'll be well positioned to do battle in the realpolitik world of global trade, combating currency manipulation and lack of trade reciprocity. Winning!

Then what happens? Bam! Someone sees a cellphone video on a non-MSM news source and makes you a metaphor for manufacturing decline over the past 3 decades. Your world changes in an instant. Trade patterns are changing, too. You—and most everyone else—have no idea what the future holds.

I don't know what the future holds either, except this: Supply chains will soon be a-changin' too, big league.