WHEN CRITICAL MASS CREATES MAYHEM
The 1970's had Massachusetts' Highway 128. North Carolina had its textile industry. Detroit had autos. Silicon Valley is currently the home of high-tech in the United States. Electronics are concentrated in SE Asia. And of course there was the offshoring of a multitude of high-labor-content components to low wage countries that created similar economic enclaves there.
That critical mass made recruiting trained people, locating local experienced sources and all the support and connecting industries much easier. Great things happened. However in several of those cases the critical mass subsequently resulted in major negative economic impact to companies, communities, and people. Mayhem some might call it.
Hong Kong, a great and stable financial capital for decades, has over 100,000 protesters in the streets and police using tear gas. Russia's supply of gas to Europe is threatened. New York City recently saw over 100,000 march in support of action to limit and reverse global warming. A few months ago Vietnamese workers set fire to factories owned or managed by the Chinese as a reaction to perceived political provocations. Tsunamis and earthquakes in Japan destroyed power sources, infrastructure and businesses; the region is not yet fully recovered.
The critical mass that provides benefit will heighten risk when taken too far.
If most of your suppliers are local, talk with businesses in Moore OK or North East Japan. If all your electronics come from the Philippines, remember that country is regularly exposed to major destructive cyclones. If key employees merely rotate within competitive companies in the area, the recruiting benefits have been reversed.
Increasing unrest, intensifying weather patterns, and changing geopolitical relationships or industry restructuring can turn the gains of critical mass into the loss of economic viability.
When defining your supply chain strategy, remember too much of a good thing quickly becomes mayhem.
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