Over the past few weeks, the spread of the coronavirus has exposed the supply chain challenges associated with an over-reliance on foreign raw materials. With the effects being felt across broad segments of manufacturing, supply chain security — for medical devices, for personal protective equipment (PPE), pharmaceuticals, and beyond — is (finally) becoming one of the focal points for policy makers on Capitol Hill.
As legislation to boost domestic resource production is being drafted and (re-)introduced, it becomes clear that our supply chains will have to look different in a post-COVID-19 world.
Writes ARPN expert panel member and President of House Mountain Partners, LLC Chris Berry:
“The effects on all of us of COVID-19 are hard to fathom as the virus threatens economic activity through both a supply and demand shock of indeterminant proportions. The light at the end of the tunnel is that this will blow over eventually, but what we thought the future was going to look like may change markedly.”
In a series of posts on his website www.discoveryinvesting.com (arguably aimed primarily at an investment audience), Berry provides context and addresses some key questions including, among others:
- How does COVID-19 affect the thematic of de-globalization and supply chain regionalization? Is the result inherently inflationary or deflationary?
- Does the collapse in oil pricing and a race to the bottom in global interest rates slow down or accelerate the transition towards electrification?
- What will raw material producers need to do in order to ensure the viability of their businesses going forward (from juniors to producers)? What is the optimal capital structure and what do companies do to manage costs with ESG pressures only set to increase?