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Patchwork Solutions Won’t Work in the Era of ReGlobalization
If you have the option of deploying dynamic optionality or adding on to your house, choose the first path.
Confused? Well, it really does make sense.
Because when your house no longer fits your growing family, you have two choices: move to something new or keep adding rooms. The same goes for your supply chain.
Traditional approaches often feel like patchwork – functional but clunky. The coming tsunami of tariffs will make it difficult to just keep adding rooms.
So, stop. And start embracing dynamic optionality – a strategy that helps you adapt seamlessly to the era of ReGlobalization, no matter what new challenges or opportunities emerge.
Why Adding on to a House Feels … Awkward
Bob and Sue had a house. Their family was growing, and they decided it was too small. For their expansion, they selected a top-quality architect.
Still, when the architect and the builders finished, Bob and Sue felt like they weren’t in a new house. They felt like they lived in a house that somebody had expanded. It just didn’t feel right.
For example, the staircase between the old first floor and the new second floor had 12 steps. Typically, staircases have about eight steps. But because of how the foundation was laid, the architect had to design extra steps onto the staircase.
I actually lived in a situation similar to this. My wife and I rented a house in New Jersey, and the previous owner had constructed multiple additions. The staircase between the living room and the kitchen was extra long because it had to go over the garage to get to the upstairs bedroom.
Several other things about the house were just wonky. Every time the previous couple had a kid, they added a room.
Frankly, the house was livable. But it was also kind of a disaster.
Going Beyond 3-Plus to True ReGlobalization
The point I’m trying to make is about my latest white paper, “ReGlobalization – Redefining Global Supply Chains.” The paper went through multiple versions. The original objective of ReGlobalization involved what we called the “3-plus approach.” ReGlobalized supply chains for the Americas would predominantly use Mexico, the Dominican Republic and Panama as manufacturing and/or supply chain hubs.
The “plus” involved other countries that fit certain criteria specific to your company and supply chain needs. Those criteria involved the five Ls of location, land, labor, leadership and lighthouse digital technology.
But like that house we rented in New Jersey, something kept popping up. News happened. They kept adding rooms to the house. I kept adding rooms to the paper.
After all, ReGlobalization, like globalization, involves every part of the globe in some capacity. Tompkins Ventures found examples of ReGlobalization involving Poland, Turkey, Brazil, India and more. Our team thought more about where China still fits in. With help from Tompkins Ventures Business Partners, I even added a section on Africa.
Basically, I built a house. Then I took a look at it, had another kid and added onto the house.
“ReGlobalization – Redefining Global Supply Chains” says what I want it to say, But despite multiple revisions and many late nights of editing, I’m not sure the additions were done any more gracefully than the additional rooms in the house we had in New Jersey.
But this is just another example of how disruption is the new normal. When I started writing, the 3-plus theory was solid. But late in the game, President-elect Trump won the U.S. election. He shifted the game with his plans to use tariffs to 1) negotiate better deals and 2) level the playing field with countries that don’t play fair (i.e., China).
Why You Need Dynamic Optionality in a World of Perpetual Disruption
Therefore, I added the appropriate information. Perhaps I could rewrite it to make it a new house. But with perpetual disruption, I’m not going to get the new house finished before something else happens to blow it up.
When things move too fast for you to keep up, you need dynamic optionality. That’s why a big part of Tompkins Ventures’ ReGlobalization services includes a Dynamic Supply Chain Optionality (DSCO) tool.
This tool gives supply chain leaders the ability to evaluate options when faced with complex choices. The DSCO tool helps your team react to disruptions or significant sourcing/distribution changes in your global operations.
The Tompkins Ventures team designed the DSCO tool to evaluate supply chain options using end-to-end analytics. It analyzes current supply chain costs and services to establish baseline total operations – sourcing, production, transportation, distribution and inventories – and compute total costs and risks of your current supply chain design.
Next, it compares alternative ReGlobalization scenarios against your current state. That’s the data you need to decide whether to revise operations. This powerful computer-based model identifies the best choice among the feasible options. Any significant change in current operations that creates serious risk can trigger your use of DSCO.
In a way, you can say Dynamic Supply Chain Optionality allows you to continually build new supply chain houses. And ReGlobalization becomes ReReGlobalization, ReReReGlobalization, ReReReReGlobalization …
Because in a world of perpetual disruption, even optionality must evolve dynamically.
The viability of suppliers, partners and networks constantly shifts. New tariffs pop up. Old tariffs (maybe) sunset. New alliances form. Old alliances break. Wars start. Wars end.
What Is Dynamic Optionality?
Dynamic optionality involves the ability to evaluate multiple pathways. Only then can you make informed, data-driven decisions to transform disruptions into opportunities. Optionality ensures you’re not locked into a single course of action. Instead, you continuously reassess, compare and adjust alternatives to maintain supply chain resilience and efficiency.
Thus, ReGlobalization is not a journey. It’s more like a joooouuuuurrney.
Keep Building New Houses – Even if You Trip along the Way
That’s why anytime I got close to finishing the paper, something changed. And when I would start rewriting, if felt like I was starting from scratch. I literally could have continued writing that paper forever.
So, if you read the paper and feel like I tripped over India on my way to Europe, I did. I also tripped over Africa on the way to the Middle East. You’re probably going to see more trips.
That’s dynamic optionality in action. Because we are all learning as we go. And constantly building new houses. Even if we trip along the way.
Related Reading
- Supply Chain Disruption or Competitive Edge? Choose Wisely
- ReGlobalization: Supply Chains in a Trump Disrupted World
- 6 Strategies to Surf Through the Trump Tariff Tsunami
Jim Tompkins, Chairman of Tompkins Ventures, is an international authority on designing and implementing end-to-end supply chains. Over five decades, he has designed countless industrial facilities and supply chain solutions, enhancing the growth of numerous companies. He previously built Tompkins International from a backyard startup into an international consulting and implementation firm. Jim earned his B.S., M.S. and Ph.D. in Industrial Engineering from Purdue University.
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