Over the past several decades, supply chains have become reliant on global networks of specialized suppliers. That paradigm was fine as long as trade was running smoothly and barriers, such as tariffs, continued falling.

A resilient supply chain can also be costly, which is why companies haven’t always made it a priority. “Even for those that do have the financial resources, the menu of options (e.g., dual sourcing, alternative factories, spare capacity and more generous safety stocks) is often unpalatable,” Gartner noted in its report. “Such measures appear to go against the well-versed philosophy of lean supply chains founded on just-in-time principles.”

Recent years have brought enough upheaval to prompt companies to question this model. They’re looking to diversify suppliers to countries including Vietnam, Mexico, India, and Malaysia. A number have also begun producing closer to the markets where they sell, called “nearshoring.” A quarter of the supply chain professionals Gartner surveyed said they had brought some of their manufacturing closer to their end markets for more speed and control over their supply.

It won’t be easy, or cheap, for companies to broaden their supply chains. China has an unparalleled manufacturing infrastructure that keeps many companies producing there. But the costs of not diversifying are rising, and the incentives are great enough that governments are getting involved. Already, India and Japan have offered financial benefits to companies that move their manufacturing out of China.

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