Insights

How Manufacturing Supply Chains Are Being Re-Engineered

January 19, 2026

Manufacturing supply chains are experiencing change as companies are responding to years of disruption to the industry caused by pandemics, geopolitical tension, labor shortages, and cost volatility. The standard supply chain model, which featured a lean model, has been shown to be weak. To help replace the lean model, the manufacturing industry is building supply chains to make resilience, agility, and intelligence the main drivers, while still maintaining efficiency.

Change in Lean Strategy

The just-in-time strategy, where materials, goods, and labor arrive exactly when needed to fulfill an order or job to reduce storage costs, waste, and excess cost, is experiencing a shift under this re-engineering to offer a more balanced approach. The manufacturing industry is experiencing more companies buying more inventory of critical components to offer more buffers, increasing the number of suppliers used, and reimagining production to allow more than one part to be applicable for a specific product. Manufacturers see an increase in cost when this strategy is first implemented due to the large upfront costs, but the strategy offers a reduction in production shutdowns and lost revenue as a result.

Increase in Technology Usage

The item at the center of this re-engineering is technology. The manufacturing industry, and all other industries, are increasing usage of artificial intelligence (AI) to turn supply chains into predictive systems rather than reactive. The usage of AI allows companies to predict disruptions that may occur by using forecasting, risk modeling, and automating inventory decisions. The usage of AI allows companies to have faster, more confident decision-making all while reducing inventory costs by being predictive.

Stronger Supplier Relationships

Supplier relationships are also seeing changes being made. Rather than companies looking at suppliers as interchangeable vendors, the industry is seeing that longer-term, more strategic partnerships are being formed between the two. Having a stronger supplier partnership is crucial during periods where companies, or the industry, are experiencing disruption, as it helps companies maintain continuity and reliability. Working together to build a network of suppliers will pay companies dividends when the two can review performance data and predictive analytics to better understand customers’ wants and needs and, ultimately, increase business.

The Need for Sustainability

Lastly, sustainability has become more rooted in the supply chain as well, as manufacturers are measuring the amount of carbon emissions it is producing, shortening transportation routes, and prioritizing more sustainable products. The industry is seeing that the customers are demanding and expecting companies to be reducing its carbon footprint as much as possible and make more sustainable products, making it crucial for businesses to adopt if it wants to maintain footing in the industry.

Being aware of the re-engineering that many companies are adopting is crucial as this implementation will not become optional, as it will set businesses apart and will define growth and long-term performance.

Please reach out to a member of our Manufacturing & Distribution team for more information on the topic outlined above. For more information regarding our Manufacturing & Distribution experience, visit our Manufacturing & Distribution industry page.