More supply chain disruptions and increased transportation costs make Made in America the rational choice for CPG planners.
As more strategic goods are caught in supply chain bottlenecks and soaring costs are underpinning inflationary pressures, CPG companies have to be looking to bring manufacturing stateside sooner rather than later.
Some products should be given priority support. This graphic of where our active pharmaceutical ingredients are sourced is eye opening:
To be reliant on China and India for 31% of our prescription drug supply is asking for trouble.
During the pandemic, there was an extreme crisis in PPE because none is Made in USA, it was virtually all made in Asia, and they had their own needs.
51% of the world’s semiconductor chips are produced in Taiwan.
With China emboldened watching Russia taking Ukraine, this is a strategic situation that cannot be tolerated. If China wanted to hold the West hostage, how better than shut down access to the vital brains of most of our consumer goods?
This is not just a feel-good, flag waving exercise, it is a national strategic imperative and there should be public-private partnerships to support it. The added benefit is that it supports well-paying jobs and can work in declining areas that need investment. It also applies to a wide range of products, not just high tech or IP examples.
All CPG’s should have plans in place to deal with supply disruptions and to quickly launch contingency operations.
A key part of Making in USA and ramping up quickly is utilization of contract manufacturing and contract packaging companies. Often these co-mans are flexible and ready to support new operations quickly. Companies such as CSA Packaging have a wide variety of services and lines that can quickly be configured at a moment’s notice to support many activities. This saves primary CPG’s time and capital, and allow the flexibility to bring the work back to USA quickly.
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