The report sets out two approaches to strengthening supply chain resilience and discusses the limits of domestic production and the role of diversifying and reviewing sourcing locations. Shifting to low-risk countries entails costs, and stress testing has also been proposed.
Two approaches are identified as effective for strengthening supply chain resilience: expanding domestic production and diversifying and reviewing sourcing locations. Domestic production can help correct high levels of dependence, but is viewed as a limited option under current conditions.
The effects of domestic production are considered limited, and it has been pointed out that increasing domestic production for items dependent on overseas supply has limited scope to reduce overall risk.
Although shifting sourcing may reduce risk, it often entails higher costs in practice, and transferring sourcing to low-risk countries is also considered to incur expenses.
Resilience is viewed as a trade-off between reducing risk and increasing procurement costs, making it important to combine measures with overall optimization in mind. It has also been proposed that stress testing be applied to supply chains to improve the accuracy of analysis and countermeasures.