As supply chain managers, we often focus on the ‘law of unintended consequences.’ Anyone watching the political landscape lately can project that the coming month and years will be likely rife with such consequences in trade, manufacturing, and the global electronics supply chain.
You know what an unintended consequence is: those times when taking action to solve one problem inadvertently creates another difficulty in different area. This often happens when you make large, drastic changes to a process that amplifies negatively throughout the operation, causing some level of turmoil.
During the past week or so, our political landscape we are already seeing the first ripples of unintended consequences of the first weeks of the newest presidential administration. Just recently a presidential executive order restricting travel from selected countries has created a situation were properly documented travelers have been either banned from boarding planes bound for the United States, or detained on arrival at airports. Many were students, faculty, business people, or others taking part in international commerce. Google has required some staff members traveling abroad to return to the United States. There will undoubtedly be other companies in the same situation. This can’t be good for commerce. Many tech firms, including Apple, are speaking out loudly in hopes of stemming the tide of business harm.
Uncertainly of trade with Mexico has also sent shockwaves through the supply chain. While pictures of fresh avocados and beef were used to show how changes in trade laws may impact consumers in the United States, I remembered how U.S. based companies had operations in Mexico that supplied me with everything from motors to power supplies to fancy electronics. I can live with domestic avocados. I can’t do my job very well if my ongoing supply contracts are changed or terminated.
There are other situations as well. Very recently President Trump had conversations with the heads of state from Great Britain, France, Germany Japan and others to explain some of his recent actions. While those countries may be worried about existing treaties and international security, most, if not all of us managing supply chains have products coming from, or going to, those countries on an almost daily basis. What now?
It is a connected world with existing contracts, agreements, material flows, and an integrated and end-to-end global supply chain. It took us a long time to synchronize that flow of materials. But think about how quickly it can unravel, sending cascading turmoil throughout all levels of the supply chain. Certainly, the law of unintended consequences is in free fall.
This is not meant to be political commentary. However, it is a warning that our supply chain risk level has increased, almost overnight, no matter your political leanings. Let us know in the comments section below about thebiggest concerns and consequences you’ve seen in the comments section below.