The supply chain renaissance: Supply chains as we once knew them are changing in response to the global turmoil of the past couple of years, which exposed the cracks in the outdated cycle that gave us most of our beloved products.

Supply chains are wishing the 2020s hadn’t happened: First came the pandemic. Then came the blocking of the Suez Canal. And now there’s the war in Ukraine. All three events have combined to put pressure on supply chains unlike anything experienced in the era of globalization. All of this has highlighted the vulnerability of globalized supply chains to disruptive events, forcing companies to rethink and reconfigure.

Could shorter supply chains be the answer? Companies are now looking into shorter supply chains, even if it comes at a higher cost. A shorter, safer but more expensive option is a trade-off some are willing to make, and this is likely to grow, according to Forbes. Shortening a supply chain means cutting down the number of those involved in the cycle and therefore limiting the supply chain’s vulnerability to issues and delays due to global disturbances. Usually a shorter supply chain will mainly rely on local products, avoiding overseas shipping and whatever issue it might bring along.

Some manufacturers have already taken the leap: After the pandemic and issues securing supplies from China — thanks to its zero-covid policy hindering operations — a number of European manufacturers have shortened their supply chains and are now using European suppliers, according to a survey done by the Supply Chain Movement magazine. And although it might cost a little more to source supplies locally or regionally, it is more agile and less risky that some manufacturers just bite the bullet and go for shorter supply chains.

Everything is pointing to shorter chains: As the entire world shifts its focus towards everything sustainable and green, supply chains are no different, recently being under scrutiny for their significant carbon footprint. It comes as no surprise that shipping materials from across the world is no good for the environment, seeing that international shipping accounts for around 3% of all global emissions, more than Germany — the world’s fourth-largest economy — produces in a year, and almost four times Egypt’s annual CO2 footprint. The solution? Shorter supply chains.

No employees, no problem: Warehouses all over have started using tech to automate the process of sorting through inventory and shipping out orders, helping companies overcome labor shortages seen over the past two years, according to the New York Times. This comes shortly after the so-called “Great Resignation” has seen record numbers of people quit their jobs over the past year, and with 11 mn job vacancies the number of applicants remains low. This is forcing companies in some sectors to aggressively up their salaries to attract and retain talent or in some cases, use robots.

How can robots help? As they would in any other profession, the use of robots in the supply chain movement improves the pace of work and the accuracy of operations, mainly in warehousing and manufacturing, according to research published by Deloitte. Using robots also increases the work efficiency of human employees and reduces their risk of injury. On the downside, the increase of automation brings along a faster work pace and a more repetitive routine, which results in a very high turnover and burnout for warehouse employees.

Where things currently stand: Supply chains are just starting to recover from the perfect storm of tribulations and shipping prices have almost halved, with the average cost of moving a 40-foot metal box dropping 45% from its peak last year.

Want more on supply chains? The Wall Street Journal documentary “Why Global Supply Chains May Never Be the Same” (watch, runtime: 54:42) takes us through the lifecycle of a product — from assembly to delivery — giving us a peek into how each link of supply chains have changed in the wake of the pandemic.