Crain's Detroit Business: John Taylor on shrinking supply chains and trade wars
For two decades since 1990, globalization boomed, trade borders eroded and billions were lifted out of poverty. U.S. manufacturers chased cheap labor and profits overseas to great success. Hyperglobalized supply chains were created. Southeast Michigan automakers and suppliers could source parts and materials from anywhere in the world. But much of the last decade has been spent rethinking the ideals of far-flung suppliers, leaving manufacturers to transition to regional manufacturing - parts are made where cars are assembled and sold. Globalization was oversold and overextended. A tsunami in Japan stifled auto sales in 2011, for example, and the geopolitical landscape has worsened in the last three years, partly due to high-profile trade spats between the U.S. and nearly all of its allies. Supply chains stretched thin to make products and parts cheaper are now risky. In return, supply chains are shrinking and further overhaul is on the horizon. This leads to the inevitable question: Have we hit peak globalization? "I don't think globalization has peaked," said John Taylor, associate professor of supply chain management and chair of the marketing and supply chain management department at Wayne State University. "There's a lot of rhetoric and noise and posturing around the tariffs, but at the end of the day, there's still plenty of room for growth in sourcing from further away."