Encouraging downstream processing: industrial policy or resource nationalism?

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Why is it crucial to consider downstream processing at this time? There has long been a discussion in economic policy circles about downstream processing, most notably in the context of central planning or mercantilism, as evidenced by the former Soviet Union. With the fall of the Soviet Union, the demise of central planning, and the dismal outcomes of industrial policy as it was implemented in both developed and developing nations during the 1970s and 1980s, it would have been simple to assume that this conversation had come to an end. It seemed reasonable to assume that recent history would have provided enough empirical proof to reassure even the most doubtful. Over the last three decades, global trade has expanded at an unprecedented rate, leading to a significant decline in poverty. This can be attributed, at least in part, to specialization and the dispersion of supply chains. Notably, global trade has outpaced global GDP growth, refuting the claims made by proponents of policies
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Importance, Challenges, and Ways to Go About Building a Strong Supply Chain

One thing that makes a supply chain strong is its ability to handle and recover from problems. As a result, it can lessen the impact of most supply chain problems on business processes. There are many parts of the supply chain that could be affected by these operating risks and disruptions.

Today, supply networks are getting more attention for a number of reasons. Changing customer expectations and the need for sustainability are two of these. Another is that many business leaders are dealing with economic problems using old systems, which makes it hard to react. The most flexible and strong supply networks can do more than just withstand and bounce back. They have modern tools and internal processes that help them see what might happen in the future and act quickly on both opportunities and threats.

Also, it shows that strategic leaders are ready and eager to use methods that make supply chains more resilient.

Risk management has always been hard for supply chain systems because even a small problem in a faraway part of the world could put the whole global supply chain at risk. Because of this, there is a good chance that big global events and trends will mess up global supply lines. Businesses must set up strong supply chain methods because of this.

The HBR Analytics Services study clearly shows that the current disparate legacy systems could be made better and more up-to-date, as only 11% of those surveyed said they relied on cutting-edge, integrated platforms with best-in-class apps.

How Strong Their Supply Chains Are

A good method for managing the supply chain has backup plans that can be changed quickly in case something goes wrong. Along with predicting and preparing for chain disruptions, it should also stop or lessen them totally. With the technology we have now, it should be able to defend and attack.

Its characteristics are:


Through supply chain planning, output is maximized by coordinating all the parts and promoting more visibility and flexibility. In this way, it helps businesses solve problems, lessens the impact of interruptions, and improves processes.

An effective supply chain knows how to use and understand data.

Getting past problems in the supply chain to stay competitive

Logistics are always changing inside of supply chains. The pandemic upheavals of 2020 caused big changes in the market, made old systems more vulnerable, and made it harder for businesses to stay competitive.

Because of the epidemic in 2020, the main problems have been delays in production, plant closings, bad weather, and even the famous Ever Given blockage of the Suez Canal.


Businesses will have to get past the following problems if they want to stay competitive as they try to build supply chains that will last in the future.


1. Unease

66% of people who answered the poll said that supply lines were still getting back to normal after recent problems. Today's businesses have to deal with a lot of unplanned problems, such as a lack of workers, delays in shipping, lower production at factories, and worries about the future of the world.


2. Not Being Able to Respond to Market Changes

It is possible for the supply chain to work well because it can adjust to the changes that happen every day. However, many supply chain experts don't have access to modern tools that could help them learn useful things from large amounts of data.


3. A lack of qualified workers: 

When CSCMP asked professionals about the state of the US supply chain in 2020, 64% said that their companies were having trouble finding workers. This was especially true in specialized areas like transportation and logistics.


4. Careless Information

33% of those who answered the HBR Analytic Services survey said that problems with data and technology are one of the main things that slows down supply chain processes. The issue of not having enough data was ranked higher than the problems of not being able to find people with the right skills and experience and working poorly with outside partners. One problem that makes the problem worse is how hard it is to quickly and accurately get the information that is needed to make good decisions. Another problem that some people brought up was not being able to see enough info.


5. Separated & Standalone Systems

In the old way of doing things, business departments would set up a single-use system for things like tracking inventory, improving the supply chain, or managing a warehouse. This means that sharing information is hard if these separate processes can't talk to each other.


6. Not working together well enough with outside suppliers

Goals, processes, and systems that aren't linked together make it hard to work with outside vendors. External silos that exist between businesses and their providers can also make it hard for people to work together. Collaboration isn't possible without the systems and steps that make the whole supply chain visible at all levels, let people share data, and plan responses.


Companies are putting in place resilient supply chain strategies.

There are many new and clever ideas that promise to make the supply chain more efficient and cut costs. Companies that want to use these tools and technologies to their advantage should consider the following:


Speaking for the Customer: Find out what customers value most.

Less inefficiency: Figure out how AI and ML can help with both the lack of resources and the efficiency of work.

Lessening Disruptions: To depend less on other countries, find goods that you can make locally.

Cost Management: Figure out how you can lower your operational costs by automating tasks, tracking performance, keeping track of inventory, making the best use of space, streamlining the ordering process, monitoring customer requests, and evaluating risk and external vendors.

Gained Value from Information: Insights from data are needed for planning and making the supply chain more resilient. Businesses combine AI features with data platforms to get more value from their data and make decisions right away.

Take Care of Suppliers Who Are in Trouble: You can find out which of your important suppliers are most at risk by doing a supplier viability assessment.


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Why is it crucial to consider downstream processing at this time? There has long been a discussion in economic policy circles about downstream processing, most notably in the context of central planning or mercantilism, as evidenced by the former Soviet Union. With the fall of the Soviet Union, the demise of central planning, and the dismal outcomes of industrial policy as it was implemented in both developed and developing nations during the 1970s and 1980s, it would have been simple to assume that this conversation had come to an end. It seemed reasonable to assume that recent history would have provided enough empirical proof to reassure even the most doubtful. Over the last three decades, global trade has expanded at an unprecedented rate, leading to a significant decline in poverty. This can be attributed, at least in part, to specialization and the dispersion of supply chains. Notably, global trade has outpaced global GDP growth, refuting the claims made by proponents of policies
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